In South Nassau Med. Group, P.C. v 105 Rockaway Realty, LLC, the Appellate Division, Second Department upheld a lower court's order granting summary judgment in favor of the plaintiffs, South Nassau Medical Group, P.C. and South Nassau Communities Hospital, regarding their lack of obligations under a lease and guaranty. The plaintiffs sought a declaratory judgment, asserting that their responsibilities were contingent upon acquiring an ownership interest in Rockaways ASC Development, LLC, which they never obtained. The defendant, 105 Rockaway Realty, countered with a third-party action against Mount Sinai Health System, alleging breach of good faith and tortious interference related to an affiliation agreement. The court found that the plaintiffs met their burden by demonstrating that the condition precedent to their obligations had not been fulfilled, as the defendant did not dispute that the plaintiffs did not acquire the ownership interest. The court also noted that while contracts include an implied covenant of good faith, no obligations inconsistent with the express terms of the contract could be implied. The order was affirmed, and the case was remitted for the entry of judgment declaring the plaintiffs' lack of obligations under the lease and guaranty.
The record lacks evidence that the letter of intent between South Nassau Communities Hospital and Rockaways ASC constituted a valid, enforceable contract. Even if it were valid, requiring the plaintiffs to secure an ownership interest in Rockaways ASC to demonstrate good faith and fair dealing would contradict the lease terms, which allowed the plaintiffs discretion. The plaintiffs demonstrated a prima facie case for a judgment declaring no obligations under the lease and guaranty. The defendant did not present a triable issue, with their claims regarding the plaintiffs' refusal to obtain an equity interest being speculative. Consequently, the Supreme Court correctly granted summary judgment in favor of the plaintiffs. For the tortious interference claim, the defendant failed to show the existence of a valid contract or a breach, leading to the dismissal of the third-party complaint. The matter is remitted to the Supreme Court, Nassau County, for a judgment declaring the plaintiffs have no obligations under the lease and guaranty.
