The Appellate Division found that Supreme Court properly granted the property owner summary judgment on its cause of action for breach of contract. The owner established that the property manager breached its obligations under the parties' management agreement by failing to take steps that would have prevented commercial tenants from receiving electricity at the owner's expense for a period of multiple years in violation of their leases. The agreement's limitation of liability clause, on which the property manager relies, provides that the property manager "shall not be liable to the owner for any loss or damage not caused primarily by the [property manager's] own negligence orfailure to comply with its obligations hereunder." Strictly construing the clause against the property manager, which is the party seeking to avoid liability, the terms of the limited liability clause do not protect it because its own breach of the management agreement was a direct and primary cause of the owner's losses, which would not have occurred but for the property manager's failure to fulfill its contractual obligations.
Furthermore, the property manager did not submit evidence sufficient to warrant dismissal based on the affirmative defense of failure to mitigate damages, as that defense does not preclude the grant of summary judgment to the owner on the issue of liability.
Fourth Ave. Owners Corp. v. Douglas Elliman Prop. Mgt., NY Slip Op 00375 (1st Dep't January 23, 2024)
