In thе Matter of The Reed Foundation, Inc., Respondent, v Franklin D. Roosevelt Four Freedoms Park, LLC, Appellant.
First Department, New York
May 2, 2013
964 N.Y.S.2d 152
Sidley Austin LLP, New York City (James D. Zirin, James D. Arden and Michael D. Mann of counsel), for appellant.
Simpson Thacher & Bartlett LLP, New York City (Michael J. Garvey and Devin F. Ryan of counsel), for respondent.
OPINION OF THE COURT
Acosta, J.
Can aesthetic considerations trump a carefully considered and crafted contractual provision dictating the specific location of an inscription on a work of art? We hold that they cannot.
This case revolves around the Franklin D. Roosevelt (FDR) Four Freedoms Park (the Park), which commemorates FDR‘s famous “Four Freedoms” speech.1 The Park is located on four acres of land at the southern tip of Roosevelt Island. It was designed in the 1970s by the distinguished architect, thе late Louis I. Kahn. For over 30 years, efforts to develop the Park had been unsuccessful. Interest in the park was renewed in 2005 when Reed and Jane Gregory Rubin, the current officers of petitioner The Reed Foundation (the Foundation), funded an exhibit about thе history of the long dormant project entitled “Coming to Light.”
At the Rubins’ urging, the Franklin & Eleanor Roosevelt Institute formed the Franklin D. Roosevelt Four Freedoms Park, LLC (the LLC) аnd undertook to raise the funds necessary to complete the Park. In March 2010, the Foundation contracted to give the LLC a $2.5 million grant. In exchange for the grant,
The Foundation‘s grant is governed by a series of interrelated agreements, including a Grant Agreement, entered into by the Foundation, the LLC and the Franklin & Eleanor Roosevelt Institute, which is the sole member of the LLC, and a Recognition Agreement, executed by the Foundation and the LLC.
The agreements detail the LLC‘s obligation to engrave specific text recognizing the Foundation and its founders (the Threshold Recognition Text) on a 12-foot-by-12-foot granite wall, which is part of a structure in the Park called the “Threshold” (or the niсhe) that houses a bronze bust of FDR. It was to read, “IN HONOR OF VERA D. RUBIN AND SAMUEL RUBIN. THE REED FOUNDATION.” As depicted in the photographs, the placement of the Threshold Recognition Text was to be low to the ground, in small font less than two inches high along the bottom of a solid 12-foot-by-12-foot granite wall on thе west-facing side of the Threshold. On June 21, 2012, the Foundation consented to a request by the LLC that the lettering for the Threshold Recognition Text be changed from black to a muted gray.
The Grant Agreement provides that the Foundation‘s grant will fund construction of the Park, including “the carving of, and/or other display of, the Threshold Recognition Text.” Under the Grant Agreement, the LLC agreed to “construct the Recognition in accordance with the terms, conditions and specifications set forth in the Recognition Agreement.” The Grant Agreement, in section 7, “Termination/Survival,” gives the Foundation alone the right in its sole discretion, to terminate the Grant Agreement by written notice of termination to the Institute and the LLC, (1) “if any aspect of the Project materi-
The Recognition Agreement sets forth the “terms, conditions and specifications fоr the construction, placement and design of the Recognition and the use of [the Foundation‘s funds] with respect to the [Park]” and specifies the precise location and wording of the “Threshold Recognition Text,” as well as requirements for the carving and maintenance of the inscription.
Section 6 of the Recognition Agreement defines “default” to mean, among other things, “if any aspect of construction of the . . . Park materially changes or it becomes impracticable to comрly with requirements of Sections 1-4 of this Recognition Agreement.” Importantly, under this section, the LLC also agreed that the Foundation would be entitled to specific performance in the event of the LLC‘s breach.
By July 2012, the LLC had completed the inscription of an excerpt from the Four Freedoms speech on the south-facing side of the Threshold but had not yet commenced the engraving of the Threshold Recognition Text. Instead of completing the Threshold Recognition Text, the LLC began pressuring the Foundation to consent to relocate the Foundation‘s Recognition Text to an area called the “Grand Staircase” at the opposite end of the Park, where other donors’ names were going to be engraved. The Foundation declinеd, and insisted that the LLC honor the Recognition Agreement.
On October 2, 2012, just over two weeks before the Park‘s scheduled dedication, the LLC advised the Foundation that it was refusing to perform because “[o]ur architects and consultants have told us” that including the Recognition Text on the Threshold is not the “best aesthetic.” The Foundation seeks specific performance. The LLC offered to return the Foundation‘s money.
The Foundation commenced this proceeding, seeking a declaration that the LLC brеached its contractual obligations, and an order directing specific performance of the agreements. In opposition to the petition, and notwithstanding the terms of the agreements, the LLC now argued, in an affidavit by its chairman, that carving the Recognition Text where the Foundation insisted was totally inconsistent with the objective of the Foundation‘s own gift, and that this was a case that “cries out
Aesthetic considerations extraneous to a contract cannot trump its terms. We thus find that the LLC breached its contractual obligations to the Foundation. We find further thаt the motion court properly ordered specific performance by directing the engraving of the Recognition Text in accordance with the Recognition Agreement (37 Misc 3d 1226[A], 2012 NY Slip Op 52174[U] [2012]; see Matter of Lamberti v Angiolillo, 73 AD3d 463, 464 [1st Dept 2010], lv denied 15 NY3d 711 [2010]; see also Trustees of Dartmouth College v Woоdward, 17 US 518, 656 [1819, Washington, J.] [a contract is a “transaction between two or more persons, in which each party comes under an obligation to the other, and each reciprocally acquires a right to whatever is promised by the other“]). In the Reсognition Agreement, the LLC expressly agreed
“that the Foundation‘s remedies at law for a failure to perform, breach or threatened breach of Section 1 [‘Threshold Recognition Text‘] and 2 [‘agreements, Representations and Warranties‘] of this Recognition Agreement would be inadequate and the Foundation would suffer irreparable damages as a result of such failure to perform, breach or threatened breach. In recognition of this fact, the LLC agrees that, in the event of the LLC‘s failure to perform, breach or threatened breach, in addition to any remedies at law, the Foundation, without posting any bond, shall be entitled to seek equitable relief in the form of specific performance.”
The LLC raises for the first time on appeal the contractual defense of impracticability. However, the LLC‘s changed aesthetic vision did not render its performance impracticable or impossible. The defense of impossibility or impracticability of performance is “applied narrowly” such that performance is excused “only when the destruсtion of the subject matter of the contract or the means of performance makes performance objectively impossible” and that “the impossibility must be produced by an unanticipated event that could not have been foresеen or guarded against in the contract” (see Kel Kim Corp. v Central Mkts., 70 NY2d 900, 902 [1987]). The LLC does not contend that it is unable to complete the agreed engraving. Rather, it has chosen not to do so because its “advisors” believe, on aesthetic grounds, that there should be no such еngraving on the Threshold. Nor do the termination provisions in the Grant Agreement support the LLC‘s view, since they address situations in which, for example, the niche is not constructed.
The time for the LLC to have voiced its aesthetic concerns was at the time the Recognition Agreement was negotiated, not after it had “accepted and spent the Foundation‘s money” (see Allegheny Coll. v National Chautauqua County Bank of Jamestown, 246 NY 369, 379 [1927]). As the Court of Appeals explained in Allegheny,
“[t]he [donor] does not say: I hand you $1,000, and you may make up your mind later . . . whether you will undertake to commemorate my name. What she says is in effect is this: I hand you $1,000, and if you are unwilling to commemorate me, the time to speak is now” (id.).
Furthermore, while the LLC cites a public interest in protecting the aesthetics of the Park, the public intеrest in enforcing donor recognition agreements outweighs the shifting aesthetic concerns regarding the LLC (see Smithers v St. Luke‘s-Roosevelt Hosp. Ctr., 281 AD2d 127, 140-141 [1st Dept 2001]). Indeed, the failure “to protect the interests of individual
We reject the LLC‘s argument that the petition and order to show cause аre procedurally deficient (
Accordingly, the order of the Supreme Court, New York County (Charles E. Ramos, J.), entered November 14, 2012, which declared that respondent breached its contractual obligations to petitioner to complete an agreed engraving at the Franklin D. Roosevelt Four Freedoms Park, and directed specific performance of the obligation, should be affirmed, without costs.
Tom, J.P, Saxe, Freedman and Feinman, JJ., concur.
Order, Supreme Court, New York County, entered November 14, 2012, affirmed, without costs.