KENFORD CO. INC. V. COUNTY OF ERIE
73 N.Y.2d 312 (1989)
NATURE OF THE CASE: This was an appeal and court case that would never end; spanning over
18 years of litigation. Erie (D) challenged a judgment which affirmed a judgment in favor of
Kenford (P), corporate landowner, wherein it was awarded damages for loss of anticipated
profits from appreciation of the value of its land.
FACTS: This was a breach of contract action involving the proposed construction and
operation of a domed stadium in the County of Erie (D). Enabling legislation was passed by D
to build a domed stadium in the vicinity of Buffalo. Kenford (P) submitted an offer to
donate land to D upon which to build the stadium if D would allow Dome Stadium, Inc. (P1) to
lease or manage the stadium. P's offer was adopted. P then exercised several options on
parcels of land located in Lancaster. The contract was entered into and signed and P was to
donate 178 acres of land and the stadium was to be started within 12 months and a 40-year
lease was negotiated with P1 for the operation of the facility under which D would get at
least $63.75 million in lease revenue. This was to come from increased property taxes
against the peripheral lands that P had purchased. If P1 and D could not agree on lease
terms P1 and D were to enter into a 20-year management agreement. D eventually learned that
the project would cost $72 million which was $22 million in excess of its bond resolution
and then it terminated its contract and P and P1 sued for specific performance or contract
damages. P got an award of $18 million for lost appreciation in its property on the
periphery and $6 million for out of pocket expenses. P1 was awarded $25.6 million in lost
profits under the parties 20-year management contract. The appeals court affirmed the $6
million but reversed the P1 lost profits and a portion of P's out of pocket expenses and
directed a new trial on the damage award for loss of anticipated appreciation in the value
of the peripheral lands; that on the latter such loss was foreseeable and a certain damage.
On retrial for P the jury awarded $6.5 million. The Appellate Division affirmed and D
appealed.
ISSUE:
RULE OF LAW:
HOLDING AND DECISION:
LEGAL ANALYSIS:
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