Picotte Realty, Inc. v. Gallery of Homes, Inc.

66 A.D.2d 978, 412 N.Y.S.2d 47, 1978 N.Y. App. Div. LEXIS 14317

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: December 28, 1978
• Status: Published

Opinions

Appeal from an order of the Supreme Court at Special Term, entered December 16, 1977 in Albany County, which granted plaintiffs motion for a preliminary injunction restraining defendant from taking action in furtherance of termination of a licensing agreement during the pendency of the action for permanent injunction. On December 1, 1973 plaintiff, a domestic corporation primarily engaged in selling real estate in the Albany area, and defendant, a domestic corporation which provides a unique marketing system to real estate brokers nationwide, entered into a licensing agreement enabling plaintiff to operate as a "Gallery of Homes” realtor for a period of 25 years in return for a percentage of its gross residential real estate commissions. Paragraph 4H of the agreement provides that "All license fees shall be due and payable within 30 days after the end of each calendar quarter * * * such payments to be based upon the commissions as defined below, reported in a form provided by the licensor at the end of such quarter”. When 12 days had elapsed after the expiration of the prescribed payment period for the first quarter in 1977, defendant sent plaintiff a letter of termination pursuant to paragraph 5C of the agreement, which authorized defendant to terminate the agreement by written notice "upon breach of this agreement by the Licensee”. Paragraph 5D of the agreement defines breach as including plaintiff’s failure "to comply with any of the obligations required under Paragraph 4”. Following receipt of the letter of termination, plaintiff sent the late payment with an explanation that it had not received from defendant the usual payment form it believed was necessary for payment under paragraph 4H. When defendant persisted in asserting that the agreement had been terminated, plaintiff commenced an action for a permanent injunction seeking to restrain defendant from terminating the agreement and moved for a preliminary injunction pending the outcome of the action. Special Term granted the motion and this appeal ensued. The grant of a preliminary injunction is within the discretion of the court to be exercised in those instances where the plaintiff would be entitled to permanent injunctive relief (see 7A Weinstein-Korn-Miller, NY Civ Prac, par ,6301.13). To be entitled to relief plaintiff must demonstrate the likelihood of ultimate success on the merits, irreparable injury to itself if the relief is not granted, and a balancing of the equities (Albini v Solork Assoc., 37 AD2d 835). Appellate review is relegated solely to the issue of whether there was an abuse of discretion (Western Regional Off-Track Betting Corp. v Town of Henrietta, 46 AD2d 1010). We do not find that the court abused its discretionary power in granting a preliminary injunction since there was no breach of the contract because defendant failed to comply with a condition precedent to its entitlement to timely payment of commissions by its failure to supply plaintiff its commission reporting form as required by paragraph 4H of the contract. The plaintiff has thus sufficiently made out probable chance of success to merit injunctive relief. We do not agree with defendant’s contention that paragraph 5G of the agreement, a liquidated damages clause, precludes the granting of injunctive relief because plaintiff has an adequate remedy at law (see Karpinski v Ingrasci, 28 NY2d 45; Rubenstein v Rubenstein, 23 NY2d 293). Plaintiff has spent considerable sums of money in adapting its over-all advertising to include the Gallery of Homes logo. Its identification with Gallery constitutes a substantial part of Picotte’s good will. Picotte cannot replace Gallery’s distinctive system of services, image and referral benefits it enjoys under the contract. The damages it will incur for these items under the contract represent intangibles not ascertainable in a breach of contract action. They constitute irreparable injury. Finally, the equities clearly tip to plaintiff in maintaining the status quo until the issue of whether the reporting form was sent is determined by trial. Order affirmed, without costs. Greenblott, Kane, Main and Mikoll, JJ., concur.