Summary
rejecting contract interpretation where "Plaintiff's proffered view of the transaction would have made no economic sense for defendant and would have frustrated defendant's explicit central purpose in entering into the transaction"
Summary of this case from Pentech Pharmaceuticals v. Par PharmaceuticalOpinion
December 9, 1997
Appeal from the Supreme Court, New York County (Edward Greenfield, J.).
We agree with the trial court's finding that plaintiff had clearly repudiated the parties' sale and lease back agreement by advancing an untenable interpretation based upon a foreseeable tax factor that had been consistently absent from the pre-contractual negotiations and the governing documents while other tax assumptions were an express part of the understanding of the parties. Plaintiff's proffered view of the transaction would have made no economic sense for defendant and would have frustrated defendant's explicit central purpose in entering into the transaction (see, Westbury Post Ave. Assocs. v. Great Atl. Pac. Tea Co., 46 A.D.2d 860, affd 38 N.Y.2d 890; Ronnen v. Ajax Elec. Motor Corp., 88 N.Y.2d 582, 589). Moreover, basing defendant's rental adjustments for the long-term lease on plaintiff's end of year income would have rendered meaningless the contractual provision for notifying defendant of changes in tax law that would affect its rental adjustments, such that that construction should be avoided (supra).
We have considered plaintiff's contentions regarding the award of damages on defendant's counterclaim and find them to be without merit.
Concur — Sullivan, J. P., Ellerin, Wallach, Williams and Andrias, JJ. [ See, 170 Misc.2d 15.]