There was great case out of the state of New York in which the plaintiff alarm company contracted with the defendant to inspect and maintain the defendant’s fire alarm system for an initial period of five years. Approximately six months into the contract, the defendant terminated the contract. The plaintiff alarm company commenced an action alleging that the defendant, by its premature termination, breached the contract. The alarm company pursued damages under the contract’s liquidated damage clause.
Prior to any discovery, the alarm company moved for summary judgment on the complaint. The defendant opposed the motion and moved for summary judgment dismissing the complaint, or in the alternative, limiting the plaintiff’s damages to the unpaid portion of the first year of the contract.