A New York appellate court recently ruled in a case involving a breach of contract dispute between Mark A. Newgarden and Havemeyer Estates, LLC. The court's decision, issued on September 30, 2026, affects how license fees and legal fees are handled in construction agreements. This ruling is significant for parties involved in similar contractual agreements, as it clarifies obligations surrounding fee payments.
The case, Newgarden v. Havemeyer Estates, LLC, was filed under docket number 2025-00858. It involved Newgarden, who entered an access agreement with Havemeyer Estates, allowing the company to use his adjacent property for construction purposes. The court's ruling has implications for both the parties involved and others who may find themselves in similar situations.
Background
In early 2019, Havemeyer Estates began construction work on its property at 20 Havemeyer Street in Brooklyn. To facilitate this work, they entered into an access agreement with Newgarden, who owned the adjacent property at 18 Havemeyer Street. Under this agreement, Havemeyer was required to pay Newgarden a license fee during the agreement's term and additional fees until the construction was completed. The agreement also included provisions for Havemeyer to cover legal fees incurred due to breaches.
As construction progressed, Newgarden alleged that Havemeyer failed to pay the agreed-upon license and legal fees. In response, Newgarden filed a lawsuit seeking damages for breach of contract and to recover on an account stated against both Havemeyer and David Blumenkrantz, a member of Havemeyer Estates. The case was initially heard in the Supreme Court of Kings County, where the judge issued a ruling on November 21, 2024.
The Ruling
The appellate court, led by Justice Hector D. Lasalle, reviewed the lower court's decision and found that the Supreme Court had erred in several respects. The court ruled that Newgarden had established a prima facie case that Havemeyer breached the access agreement by failing to pay the required license fees after the COVID-19 shutdown ended in June 2020. The court stated, "Havemeyer breached the access agreement by failing to pay license fees after the COVID-19 shutdown ceased to exist."
Furthermore, the court modified the lower court's order by granting Newgarden's motion for summary judgment on the issue of liability regarding the unpaid license fees and legal fees. However, the court upheld the lower court's decision to dismiss the fraud, negligence, gross negligence, and nuisance claims against Blumenkrantz, emphasizing that he could not be held personally liable for the limited liability company's debts.
Impact
This ruling has important implications for future contractual agreements, particularly in the construction industry. It clarifies that parties must fulfill their financial obligations under access agreements, even if there are interruptions due to unforeseen circumstances like a pandemic. The court's decision reinforces the importance of maintaining clear communication and documentation regarding payments and obligations.
Moreover, the ruling sets a precedent regarding the limits of personal liability for members of limited liability companies. It highlights that members cannot be held personally responsible for the company's debts unless specific legal standards, such as piercing the corporate veil, are met. This aspect of the ruling may influence how individuals engage in business through limited liability entities in the future.
What's Next
The case may still have further developments, as the parties could potentially seek to appeal certain aspects of the ruling. However, details regarding any planned appeals or related cases were not available in the court filing. For now, the decision stands as a significant ruling in contract law within New York.