A Queens hotel owner cannot sue the Salvation Army for an alleged $200 million in damages to the Carlton House Hotel, New York State’s top court ruled. The North Conduit Avenue site was used by the charity as a homeless shelter, but owner JFK Holdings had alleged that the charity failed to maintain the facility.
The breach of contract allegation was brought against the Salvation Army despite the fact that the city – which negotiated the charity’s lease – has previously paid the owner a $10 million termination fee.
But the New York State Court of Appeals said the charity couldn’t, under the terms of the lease, be sued for failing to demand more from the city to compensate for the damages.
“If the allegations of the complaint are true, plaintiffs could have rejected the Salvation Army’s termination of the lease and continued collecting rent until the building was restored to its original condition,” Judge Robert Smith said in an opinion seen by Law360. “But that would have required plaintiffs to reject the proffered $10 million termination fee. Having chosen to take the money, plaintiffs have no further remedy under the lease.” [Law360] – Hiten Samtani