Kenford Co. Inc. v. County Of Erie

73 N.Y.2d 312 (1989)

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Nature of the Case

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Facts

This was a breach of contract action involving the proposed construction and operation of a domed stadium in the County of Erie (D). Enabling legislation was passed by D to build a domed stadium in the vicinity of Buffalo. Kenford (P) submitted an offer to donate land to D upon which to build the stadium if D would allow Dome Stadium, Inc. (P1) to lease or manage the stadium. P's offer was adopted. P then exercised several options on parcels of land located in Lancaster. The contract was entered into and signed, and P was to donate 178 acres of land, and the stadium was to be started within 12 months, and a 40-year lease was negotiated with P1 for the operation of the facility under which D would get at least $63.75 million in lease revenue. This was to come from increased property taxes against the peripheral lands that P had purchased. If P1 and D could not agree on lease terms P1 and D were to enter into a 20-year management agreement. D eventually learned that the project would cost $72 million which was $22 million in excess of its bond resolution and then it terminated its contract and P and P1 sued for specific performance or contract damages. P got an award of $18 million for lost appreciation in its property on the periphery and $6 million for out of pocket expenses. P1 was awarded $25.6 million in lost profits under the parties 20-year management contract. The appeals court affirmed the $6 million but reversed the P1 lost profits and a portion of P's out of pocket expenses and directed a new trial on the damage award for loss of anticipated appreciation in the value of the peripheral lands; that on the latter such loss was foreseeable and a certain damage. On retrial for P, the jury awarded $6.5 million. The Appellate Division affirmed, and D appealed.