New York Anhydrous Ammonia Development Corporation v. Ciba-Geigy Corp.

In an action to recover damages for breach of a contract to purchase natural gas, the plaintiffs appeal, as limited by their brief, from so much of a judgment of the Supreme Court, Westchester County (Delaney, J.), entered July 22, 1987, as, after a nonjury trial, dismissed their complaint.

Ordered that the judgment is affirmed insofar as appealed from, with costs.

The plaintiff National Developers, Inc. (hereinafter NDI) and the defendant Delvan Development Corporation (hereinafter Delvan) entered into a contract in 1975 in which Delvan agreed to provide a supply of natural gas to NDI. Delvan is a wholly owned subsidiary of the defendant Ciba-Geigy Corporation (hereinafter C-G). On the same day, NDI entered into a contract with C-G in which it agreed to provide C-G with a supply of anhydrous ammonia. The terms of the contracts established that NDI planned to construct an ammonia production plant which would process the natural gas provided by Delvan into ammonia for sale to C-G. There is no dispute that NDI failed to construct the ammonia plant.

The plaintiffs commenced this action in 1977, contending that Delvan had breached the gas contract. Following a non-*659jury trial, the complaint was dismissed. We affirm. The evidence supports the trial court’s finding that the two contracts were inextricably intertwined. NDI was obligated to begin accepting delivery of the gas no later than January 1, 1977, and breached the contract by its failure to do so. The notice sent by NDI to Delvan on March 16, 1977, in which it sought delivery of a quantity of gas, failed to cure its breach of the gas contract. NDI’s undisputed nonperformance of its obligation to supply C-G with ammonia pursuant to the ammonia contract was also grounds for termination of the gas contract and of Delvan’s obligation to deliver the gas. Furthermore, there is no indication in the record that NDI responded to Delvan’s inquiry as to whether NDI planned to resell the gas delivered by Delvan for use in interstate commerce in violation of their contract. Thompson, J. P., Brown, Rubin and Sullivan, JJ., concur.