Court Opinion

ID: 6087509
Source: CourtListenerOpinion
Date Created: 2022-01-13 19:30:52.830158+00
Date Added: 2024-06-11T08:52:27.560201
License: Public Domain

Scudder, J.
(dissenting). I respectfully dissent. In my view, Supreme Court properly granted plaintiffs motion for a preliminary injunction prohibiting defendants from terminating certain contracts with plaintiff, pursuant to which plaintiff was to perform medical evaluations for claimants seeking Social Security disability benefits. I further conclude that the court properly denied defendants’ cross motion seeking to dismiss the complaint for lack of subject matter jurisdiction. Although the majority properly notes that the Court of Claims has jurisdiction over a cause of action against the State for breach of contract, the Court of Claims may grant injunctive relief only if such relief is incidental to an award of damages (see Sarbro IX v State of N.Y. Off. of Gen. Servs., 229 AD2d 910, 911), and here plaintiff does not seek damages. Rather, plaintiff seeks a declaration that defendants breached the contracts and an injunction prohibiting defendants from doing so.
The majority also properly notes that "[a] cause of action to recover damages against the State for violation of the Equal *855Protection Clause of the New York Constitution may be brought in the Court of Claims.” However, contrary to the implicit conclusion of the majority, plaintiff does not seek damages based on that cause of action. Rather, plaintiff seeks a declaration that defendants violated plaintiff’s right to equal protection by terminating the contracts on the ground that plaintiff is not a professional corporation while failing to terminate their contracts with other corporations that also were not professional corporations.
In my view, and contrary to the majority’s conclusion, the failure of plaintiff to seek damages for breach of contract in the Court of Claims does not foreclose its right to seek in Supreme Court a declaration that defendants breached the contracts. A court “may decline to hear the matter [seeking declaratory relief] if there are other adequate remedies available, and it must dismiss the action if there is already pending between the parties another action in which all the issues can be determined * * *. The mere existence of other adequate remedies, however, does not require dismissal: “We have never gone so far as to hold that, when there exists a genuine controversy requiring a judicial determination, the Supreme Court is bound, solely for the reason that another remedy is available, to refuse to exercise the power conferred by [the predecessor statutes to CPLR 3001]’” (Matter of Morgenthau v Erlbaum, 59 NY2d 143, 148, cert denied 464 US 993; see Seneca Ins. Co. v Lincolnshire Mgt. 269 AD2d 274, 275; cf. BGW Dev. Corp. v Mount Kisco Lodge No. 1552 of Benevolent & Protective Order of Elks of U.S. of Am., 247 AD2d 565, 568, lv denied 92 NY2d 813; Apple Records v Capitol Records, 137 AD2d 50, 54). BGW Dev. Corp., Apple Records, and Levey v Leventhal & Sons (231 AD2d 877), the cases relied upon by the majority, are factually distinguishable. In those cases, it was determined that the causes of action seeking declaratory relief were unnecessary and inappropriate because the complaints also sought damages for breach of contract. Nor does the decision in Kalisch-Jarcho, Inc. v City of New York (72 NY2d 727, 732) provide support for the result reached by the majority. Although the Court of Appeals stated therein that declaratory relief is inappropriate if the contract specifies a “different, reasonable means for resolving such disputes” (id.), the Court also recognized that a declaratory judgment action “may be an appropriate vehicle for settling justiciable disputes as to contract rights and obligations” (id. at 731). Although the contracts at issue address money damages, plaintiff does not seek money damages, and thus declaratory relief is appropriate. I disagree with the majority that the contracts limit plaintiff’s remedy to money *856damages. The parties dispute the meaning of the term “redress” as that term is used in the clause providing that plaintiff agreed to accept “as full compensation for any damages * * * actually suffer [ed] * * * reasonable and appropriate expenses incurred * * * [and] agree [d] not to seek any punitive damages or other additional compensation or redress.” Any ambiguity in that clause must be construed against defendants, the parties who drafted the contracts (see Clifton Steel Corp. v County of Monroe Pub. Works Dept., 120 AD2d 924, 924), and in my view that clause does not indicate that plaintiff “unequivocally declared its intention to surrender substantive or procedural rights to seek [injunctive relief]” (Abiele Contr. v New York City School Constr. Auth., 91 NY2d 1, 10). Thus, contrary to the apparent conclusion of the majority, defendants failed to establish that plaintiff waived its right to seek injunctive relief (see generally Rosenthal v City of New York, 283 AD2d 156, 160, lv dismissed 97 NY2d 654).
I further conclude that the court properly determined that plaintiff established that the termination of the contracts threatens the very existence of its business, thereby establishing irreparable harm and a balancing of the equities in its favor (see State of New York v Premier Color of N.Y., 285 AD2d 544, 545; Quinones v Board of Mgrs. of Regalwalk Condominium I, 242 AD2d 52, 57; cf. Elpac, Ltd. v Keenpac N. Am., 186 AD2d 893, 894-895). Furthermore, in my view, plaintiff established a likelihood of success on the merits (cf. Doe v Axelrod, 73 NY2d 748, 750-751). I therefore disagree with the majority that the court abused its discretion in granting plaintiff’s motion for a preliminary injunction, and I would affirm. Present — Pigott, Jr., P.J., Green, Scudder, Bums and Gorski, JJ.