Humble Tribute to Chief Judge Judith Kaye

posted by Lawrence Cunningham

One of the country’s greatest contemporary judges, Judith Kaye, Chief Judge of the New York Court of Appeals, will retire at year-end under the state’s mandatory retirement law. Having served with distinction for some 25 years (15 as Chief Judge), she has earned a deserved reputation for integrity, influence, discernment, very high quality opinion writing—as well as administrative excellence. Notably, Judge Kaye was the first woman appointed to New York’s high court and its longest serving Chief Judge.

In an editorial tribute on December 14, the Sunday New York Times instanced “groundbreaking decisions,” including interpreting the New York Constitution to require the state to provide its citizens with “sound, basic education;” finding certain provisions of a New York death penalty statute unconstitutional; and finding that gay persons enjoy rights to adopt their partners’ children.

In fields closer to my heart and mind, Judge Kaye wrote several important and influential opinions on the common law of contracts, continuing a tradition on her court, whose earlier members include luminaries such as Benjamin Cardozo, Stanley Fuld, and Charles Brietel. Judge Kaye’s opinions have made their way into Contracts casebooks, becoming staples of the course.

Judge Kaye’s opinions are likely to increasingly be reprinted in Contracts casebooks. If so, she would join the only other woman, Ellen Ash Peters, former Chief Justice of Connecticut, on lists of judges whose opinions are frequently reprinted, which include the likes of Cardozo, Roger Traynor, Richard Posner and Learned Hand).

One illustration, from Judge Kaye’s early years on the bench, is the classroom favorite, Van Wagner Advertising Corp. v. S&M Enterprises, 492 N.E.2d 756 (N.Y. 1986), where Judge Kaye announced her holding in the opening lines: “specific performance of a contract to lease ‘unique’ billboard space is properly denied when damages are adequate to compensate the tenant . . . .”

The lease ran from December 16, 1981 for three years (with an option to total seven years) covering space on an outside building wall (facing an exit from the Midtown Tunnel so that it was visible to vehicles entering Manhattan). Judge Kaye affirmed lower court interpretations of the contract that rendered the lessor in breach so the principal issue was the remedy.

Judge Kaye’s discussion is exemplary, explaining New York law’s somewhat different approach while engaging fully with historical and contemporary expert discussion of the doctrine. In short, she rejects the lessee’s insistence that the billboard lease, involving real estate, entitles it automatically to specific performance and also rejects the lessor’s assertions that nor should money damagers be awarded because they are too speculative. She begins with this observation in footnote 2:

We note that the parties’ contentions regarding the remedy of specific performance in general, mirror a scholarly debate that has persisted throughout our judicial history, reflecting fundamentally divergent views about the quality of a bargained-for promise. While the usual remedy in Anglo-American law has been damages, rather than compensation “in kind” [citing Oliver Wendell Holmes and Grant Gilmore] the current trend among commentators appears to favor the remedy of specific performance [citing Allan Farnsworth, Peter Linzer and Alan Schwartz] but the view is not unanimous [citing Richard Posner and Ed Yorio].

Judge Kaye explained:

Whether or not to award specific performance is a decision that rests in the sound discretion of the trial court, and here that discretion was not abused. Considering first the nature of the transaction, specific performance has been imposed as the remedy for breach of contracts for the sale of real property, but the contract here is to lease rather than sell an interest in real property. While specific performance is available, in appropriate circumstances, for breach of a commercial or residential lease, specific performance of real property leases is not in this state awarded as a matter of course. [Here Judge Kaye’s footnote 3 offers “but see” citations to Arthur Corbin, Samuel Williston, and the Restatement.]

She elaborated:

Van Wagner argues that specific performance must be granted in light of the trial court’s finding that the “demised space is unique as to location for the particular advertising purpose intended”. The word “uniqueness” is not, however, a magic door to specific performance. A distinction must be drawn between physical difference and economic interchangeability. [T]he leased property is physically unique, but so is every parcel of real property and so are many consumer goods. Putting aside contracts for the sale of real property, where specific performance has traditionally been the remedy for breach, uniqueness in the sense of physical difference does not itself dictate the propriety of equitable relief.

By the same token, at some level all property may be interchangeable with money. Economic theory is concerned with the degree to which consumers are willing to substitute the use of one good for another [citing Anthony Kronman], the underlying assumption being that “every good has substitutes, even if only very poor ones”, and that “all goods are ultimately commensurable” ( id.). Such a view, however, could strip all meaning from uniqueness, for if all goods are ultimately exchangeable for a price, then all goods may be valued. Even a rare manuscript has an economic substitute in that there is a price for which any purchaser would likely agree to give up a right to buy it, but a court would in all probability order specific performance of such a contract on the ground that the subject matter of the contract is unique.

The point at which breach of a contract will be redressable by specific performance thus must lie not in any inherent physical uniqueness of the property but instead in the uncertainty of valuing it.

After quoting extensively from Professor Kronman, Judge Kaye applied the foregoing principles to conclude that “the value of the “unique qualities” of the demised space could be fixed with reasonable certainty and without imposing an unacceptably high risk of under-compensating the injured tenant.” She explains:

First, it is hardly novel in the law for damages to be projected into the future. Particularly where the value of commercial billboard space can be readily determined by comparisons with similar uses—Van Wagner itself [the lessee] has more than 400 leases-the value of this property between 1985 and 1992 cannot be regarded as speculative.*

Second, S & M having successfully resisted specific performance on the ground that there is an adequate remedy at law, cannot at the same time be heard to contend that damages beyond 60 days must be denied because they are conjectural. If damages for breach of this lease are indeed conjectural, and cannot be calculated with reasonable certainty, then S & M should be compelled to perform its contractual obligation by restoring Van Wagner to the premises. . . .

Judge Kaye’s Van Wagner opinion is characteristically clear, straightforward and informative—and fun and easy to teach. It is but one specimen of how all those with an interest or stake in the output of the New York Court of Appeals have benefited from her considerable contributions and why we will miss her.

* My note: Van Wagner still has hundreds of billboards all around New York City. If readers of this post who are denizens of that town haven’t noticed them before, they likely will now.

 December 23, 2008 at 3:53 pm   Posted in: Contract Law & Beyond    Print This Post

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