St. Lawrence Factory Stores wanted to build a shopping center and sought to purchase about 12 acres of land from the Ogdensburg Bridge and Port Authority (OBPA) for that purpose.
When OBPA backed out of the deal, St. Lawrence sued seeking "lost profits," based on money it would have made had the shopping center been built, "the benefits of the bargain" (the difference between the property's contract price and its fair market value), together with "reliance damages," the money the company spent procuring financing and finding tenants for the property.
After the St. Lawrence County Supreme Court granted a pre-trial request to dismiss the reliance and lost-profits claims, and rejected the "benefits of bargain" theory after a trial, the Appellate Division, Third Department, affirmed.
When the dispute reached the New York State Court of Appeals, our state's highest court was of the view state law had long adopted the principle of "reliance" -- as set forth in the Restatement (Second) of Contracts ยง 349 -- and that a party may seek the recovery of such sums expended in anticipation of a contract's performance.
Since it thought dismissal of the reliance claim was wrongful, the Court of Appeals sent the case back for "further proceedings."
There's no defiance of reliance.
To view a copy of the Court of Appeal's decision, please use this link: St. Lawrence v. Ogdensburg