235 E. 4th Street, LLC v. Dime Savings Bank of Williamsburgh

Order, Supreme Court, New York County (Carol Edmead, J.), entered July 21, 2008, which, insofar as appealed from, denied defendant’s motion to dismiss plaintiff’s cause of action for breach of contract and demand for punitive damages, unanimously modified, on the law, to strike the demand for punitive damages, and otherwise affirmed, without costs.

The motion court correctly held that a cause of action for breach of contract is stated by plaintiff mortgagor’s allegations that defendant mortgagee’s payoff letter demanded a prepayment penalty that was not called for in the mortgage, and that plaintiffs payment of the demanded penalty under constraint of closing the transaction was not an acceptance of what was a modification of the mortgage. Plaintiffs demand for punitive damages, however, should have been stricken since its alleged damages arose from a breach of contract and there is no allegation of tortious conduct and no evidence of any egregious or morally reprehensible conduct (see New York Univ. v Continental Ins. Co., 87 NY2d 308, 315-316 [1995]). Concur—Mazzarelli, J.P., Saxe, Moskowitz, Renwick and Richter, JJ. [See 2008 NY Slip Op 32027(U).]