Court Awards Liquidated Damages and Specific Performance in Breach of Construction Contract Case

Granite Broadway Dev. LLC v. 1711 LLC, 845 N.Y.S.2d 10 (N.Y. App. Div. 2007)

In this case, a contractor sued a property owner for breach of a construction contract.  After a bench trial, the court awarded the owner liquidated damages, certain offset damages, and specific performance.  The contractor appealed.

The court upheld the liquidated damages award, explaining that, contrary to plaintiff’s assertions, “there is no blanket prohibition against a court ordering the equitable relief of specific performance in a case involving breach of a construction contract.”  The court stated that, at most, courts are vested with discretion to refuse such relief.  The court concluded that the court had properly granted both liquidated damages and specific performance in this case, as the legal and equitable remedies redressed separate injuries.

In addition, the liquidated damages clause at issue did not extinguish any rights or obligations under the contract.  The court observed that such a provision would not be implied absent clear and express language to that effect.  Further, the court observed that the liquidated damages clause did not state or even imply that liquidated damages would be defendant’s sole remedy.  For equitable relief to be completely barred, the court explained, the contract under which the relief arose must expressly so provide.