Van
Wagner had leased space on a building for a billboard in a prime
location.The building was
sold to S&M.S&M
cancelled the lease.
The
lease had a clause saying that a new owner could cancel the lease if the
building was sold.However,
the Court interpreted that to mean that the lease could be canceled as
part of the sale.S&M
didn't cancel Van Wagner's lease until 8 months later.
In
theory, S&M could terminate the lease if they decide to sell the
building in the future.
Van
Wagner sued for specific performance.They wanted the lease back.
Van
Wagner would not get something for nothing, if the Court agreed with Van
Wagner, they'd still have to pay rent.
You
might potentially get a court to agree to specific performance, but you have to show that damages
would be inadequate.
S&M
felt that damages would be adequate and that specific performance was not warranted.
Trial
Court found for Van Wagner.However, they found that the only recovery would be for damages,
not for specific performance.
The
Court basically said the damages were for the period between breach of
contract at the Trial Court's decision, and that if S&M did not allow
Van Wagner to put their billboard back, they would continually get assessed
for more and more damages.But, that doesn't mean that they must give the space back.
Van
Wagner claimed that the space was 'unique' and that he could not place a
billboard elsewhere for similar value.That warranted specific performance as opposed to damages.
Appellate
Court affirmed the decision.They defined physical uniqueness not as a inherent value of the
property, but instead the uncertainty in valuing it.If something cannot be properly
valued, specific performance may be warranted as being the most equitable solution.(Difficulty of Proof
provision).In this case, despite the uniqueness of the location,
it was pretty easy to value what a billboard at that location was worth.
Appellate
Court did find that the Trial Court erred in the way they assigned
damages.Van Wagner was due all damages, they don't have to sue again for
continuing damages if S&M continues to not honor the lease.
