State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: July 23, 2015 519938 

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GALUSHA & SONS, LLC, et al.,

Respondents,

v MEMORANDUM AND ORDER

CHAMPLAIN STONE, LTD, et al.,

Appellants.

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Calendar Date: May 27, 2015

Before: Peters, P.J., Lahtinen, Garry and Devine, JJ.

__________

Bond, Schoeneck & King, PLLC, Albany (Stuart F. Klein of

counsel), for appellants.

Bartlett, Pontiff, Stewart & Rhodes, PC, Glens Falls (Karla

Buettner of counsel), for respondents.

__________

Garry, J.

Appeal from an order of the Supreme Court (Krogmann, J.),

entered January 27, 2014 in Washington County, upon a decision of

the court in favor of plaintiffs.

Plaintiff Galusha & Sons, LLC (hereinafter plaintiff) was

engaged in the business of producing and selling aggregate stone. 

Plaintiff's predecessor in interest was E. Galusha & Sons

(hereinafter E. Galusha), a family partnership. In October 1992,

E. Galusha entered into a 99-year lease agreement with defendant

Champlain Stone, Ltd. and Champlain's president, defendant

Michael Morey. This agreement granted E. Galusha the right to

operate a stone crushing business in a quarry owned by

defendants, in exchange for rental payments in a specified amount

per ton of the aggregate stone produced by the business, and,
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among other things, provided that defendants would be given a

first right of purchase in the event that E. Galusha elected to

sell the business.

During 1993 and 1994, E. Galusha engaged in various

preparatory activities, but removed no aggregate stone from the

quarry and paid no rent to defendants. In March 1995, while some

blasting was occurring at the site, defendants sent a letter to

Daniel Galusha, a principal of E. Galusha and a shareholder in

plaintiff. This letter stated that defendants considered the

failure to commence the stone crushing business to be a violation

of the lease, and warned that defendants would declare the lease

to be null and void if operations were not commenced within 90

days. Shortly thereafter, E. Galusha assigned "all right, title

and interest" in the lease agreement to plaintiff.1 Thereafter,

the parties conducted discussions in an effort to resolve their

differences. In December 1995, plaintiff removed some rock

produced by the March 1995 blast from the quarry and paid rent to

defendants at the rate specified in the lease. In April 1996,

Morey advised Daniel Galusha (hereinafter Galusha) in writing

that defendants viewed the lease as null and void, as the demands

of the March 1995 letter had not been complied with. Morey

directed Galusha to remove his equipment from the property and

warned that defendants would initiate legal action if he did not

do so. In June 1996, defendants' counsel advised plaintiff's

counsel that the lease had been rescinded by the April 1996

letter, and that plaintiff had no right to enter the property. 

In August 1996, Galusha collaborated with a third party to

form plaintiff Jointa Galusha, LLC (hereinafter Jointa), and

assigned the lease agreement to Jointa. In January 1999, Galusha

informed defendants that he planned to remove previously blasted

stone from the quarry and to conduct additional mining there on a

regular basis thereafter. One week later, defendants responded

that the lease agreement was null and void and that Galusha had

no authorization to conduct activities in the quarry. 

1 Defendants do not challenge the validity of this

assignment or contend that it violated the lease. 
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In April 1999, plaintiffs commenced the instant action for

breach of contract, seeking, among other things, money damages

and specific performance under the lease agreement. Defendants

answered and asserted counterclaims alleging that plaintiff

breached the lease agreement by selling the stone crushing

business to Jointa without offering defendants a first right of

purchase. Following a bifurcated bench trial on the issue of

liability, Supreme Court found, as pertinent here, that

defendants materially breached the agreement in April 1996 by

unilaterally declaring the lease agreement to be null and void,

and that plaintiffs were entitled to damages in an amount to be

determined in a subsequent inquest.2 Defendants appeal.

Defendants contend that Supreme Court erred in determining

that they materially breached the agreement in April 1996 and

that, instead, plaintiff was the first to breach the agreement

when it transferred the stone crushing business to Jointa several

months later. To establish their claim for breach of contract,

plaintiffs were required to prove that a contract existed, that

plaintiffs performed their obligations under the contract, that

defendants breached the contract and that damages resulted (see

Clearmont Prop., LLC v Eisner, 58 AD3d 1052, 1055 [2009]). Here,

it is undisputed that the lease agreement was a valid and

enforceable contract. As for performance, Supreme Court found

that the activities that E. Galusha and plaintiff conducted after

executing the lease were sufficient to constitute performance

within a reasonable time (see Savasta v 470 Newport Assoc., 82

NY2d 763, 765 [1993]; Tedeschi v Northland Bldrs., LLC, 74 AD3d

1613, 1614 [2010]). Defendants raise no challenge to this

determination upon appeal, thus abandoning any related arguments

(see Battaglia v Town of Bethlehem, 46 AD3d 1151, 1154 [2007]). 

Instead, they contend that the court erred in determining that

2 With considerable dismay, we note that Supreme Court's

decision was issued in January 2014, more than nine years after

the December 2005 trial. The first period of this prolonged

delay may apparently be attributed to the parties, who delivered

their final posttrial submissions in August 2009. Inexplicably,

this was followed by a period of almost 41⁄2 years while the

decision remained pending before the court.
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defendants' April 1996 letter constituted a breach of the lease

agreement, arguing that plaintiffs were not actually denied

access to the quarry until defendants advised them in 1999 that

they were not authorized to conduct activities there. We reject

this argument, and agree with Supreme Court that the April 1996

letter constituted a breach of the lease agreement. 

"In the case of every contract there is an implied

undertaking on the part of each party that he [or she] will not

intentionally and purposely do anything to prevent the other

party from carrying out the agreement on his [or her] part"

(Syracuse Orthopedic Specialists, P.C. v Hootnick, 42 AD3d 890,

892 [2007] [internal quotation marks and citation omitted]; see

Wieder v Skala, 80 NY2d 628, 637 [1992]; Bass v Sevits, 78 AD2d

926, 927 [1980]; 10-53 Corbin on Contracts § 53.5 [2015]). In

the April 1996 letter, Morey advised Galusha that the lease was

null and void, threatened legal action if plaintiff did not

"promptly" remove its equipment from the quarry, and stated that

Morey did not consider himself bound by the lease because it was

void. Two months later, defendants' counsel advised plaintiff's

counsel that it was defendants' position that the lease had been

rescinded and that plaintiff "ha[d] no right to enter upon the

property." Contrary to defendants' claim, the January 1999

letter did not deny access to the quarry for the first time, but

merely repeated the previously-stated claims that the lease was

null and void and that plaintiffs were not authorized to enter

the quarry. "[R]efusing to permit the other party to perform is

a breach of contract" (22A NY Jur 2d, Contracts § 433). Here,

defendants' unilateral declaration that the lease was null and

void, and their threat of legal action if plaintiff did not

promptly remove its equipment, followed shortly thereafter by the

statement of defendants' counsel that plaintiff had no right to

enter the property, constituted a refusal to permit plaintiff to

perform. Exercising our broad factual review power to

independently assess the evidence while deferring to the trial

court's credibility assessments (see Northern Westchester

Professional Park Assoc. v Town of Bedford, 60 NY2d 492, 499

[1983]; Sterling v Sterling, 21 AD3d 663, 665 [2005]), and in

view of the court's determination that plaintiff performed its

obligations under the lease before the April 1996 letter, we find

that the record evidence supports the court's determination
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(compare Greenspan v Amsterdam, 145 AD2d 535, 536 [1988]).

Peters, P.J., Lahtinen and Devine, JJ., concur.

ORDERED that the order is affirmed, with costs.

ENTER:

Robert D. Mayberger

Clerk of the Court