Van Wagner Advertising Corp. v. S&M Enterprises
501 N.Y.S.2d 628, 492 N.E.2d 756 (N.Y. 1986)
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.
So in theory, S&M had
the ability to terminate the lease if they decided to sell the building
in the future.
Van Wagner sued for breach
Van Wagner wanted specific
performance. They wanted the lease
Van Wagner argued 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.
That wouldn't mean that Van
Wagner would get something for nothing, if they received specific
performance, they'd still have to
S&M argued that even if
they lost on the breach of contract
issue, damages would be adequate and specific performance was not warranted.
In general, you can only
get specific performance if you
can to show that damages would be inadequate.
The Trial Court found for Van
However, the Trial Court
found that the only recovery would be for damages, not for specific
The Court basically said the
damages were for the period between breach of contract at the 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
But, that doesn't mean that
they must give the space back. It was S&M's choice.
The Appellate Court affirmed.
The Appellate Court found
that "physical uniqueness" was not an inherent value of the property, but
it just meant it would be hard to calculate its value.
If something cannot be
properly valued, specific performance may be warranted as being the most equitable solution (that's known as
the Difficulty of Proof
However, in this case,
despite the uniqueness of the location, it was pretty easy to value what
a billboard at that location was worth.
The Court found that the
Trial Court erred in the way they assigned damages. Van Wagner was due
all damages now, they don't have to sue again for continuing damages if
S&M continues to not honor the lease.