| Blumenthal-Levy v Coldwell Banker |
| 2007 NY Slip Op 50416(U) [14 Misc 3d 1238(A)] |
| Decided on January 29, 2007 |
| Supreme Court, New York County |
| Acosta, J. |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| This opinion is uncorrected and will not be published in the printed Official Reports. |
Hillary Blumenthal-Levy, Plaintiff,
against Coldwell Banker Hunt Kennedy, a New York Partnership, and Elayne Reimer, Defendants. |
The facts in this case are fairly straight forward.[FN1] According to plaintiff, she needed a new apartment to accommodate her growing and family and her children's academic needs, so she entered into an oral real estate agreement with defendants, which provided, inter alia, that: (1) defendants would act has her agent on an exclusive basis to find and negotiate for the purchase of a three bedroom apartment within the Public School District encompassing P.S. 290 or P.S. 6 in the Upper East Side of Manhattan; (2) that Coldwell would be paid a commission of three percent (3%) of the sales price of the new apartment, but would remit to plaintiff one-half percent (½ % ) at the closing.
"Since it was of the utmost importance to [plaintiff] that the New Apartment be located either in the P.S. 290 . . . or P.S. 6 School District[s], [plaintiff] thought it prudent to rely upon the expertise of defendants to guarantee to [her] that the New Apartment was in the correct school district." Affidavit in Opposition at ¶ 28. Plaintiff "felt safe in doing so" give her parents personal relationship with Reimer and that fact the Coldwell Banker's website stated that "for specific school information, please contact a local Coldwell Banker office or school district." Affidavit in Opposition at ¶ 28.
In April 2006, Reimer showed plaintiff units 17E & 17F in the building located at 301 E. 87th Street. According to plaintiff, Reimer "[r]epresented" to her "and assured" her that the premises were within the P.S. 290 School District. Affidavit in Opposition at ¶ 30. On or about April 9 or 10, 2006, plaintiff alleges that she told Reimer: [*2]
that she could commence negotiating on my behalf for the purchase of the Premises on the condition that, and subject to, her providing me with absolute and unconditional assurance that the Premises were within the P.S. 290 School District. I told her that I believed (based upon my looking at the www.insideschool.org website map) that the street on which the building . . . was located appeared to be the cut-ff point for P.S. 290 School District, but before I would even consider the Premises or enter into negotiations for the Premises (i.e. bid on the Premises), she had to guaranty to me and provide absolute and unconditional assurance to me that the Premises were within the P.S. 290 School District.
Although the listing agent had also represented to plaintiff that the premises was within the P.S. 290 School District, plaintiff asserts that "such representation was wholly insufficient to [her] and [she] did not intend to rely on such representation. [She] intended to rely . . . upon the broker (defendants) [she] employed to ascertain the absolute certainty what the facts were regarding the P.S. 290 School District as applied to the Premises." Affidavit in Opposition at ¶ 31 fn 2.
Shortly thereafter, Reimer allegedly telephoned plaintiff and "advised [her], in substance, that she had fully researched the matter and that she guaranteed (and unconditionally absolutely assured and represented to [her]) that the premises were within the P.S. School District." Affidavit in Opposition at ¶ 31. Plaintiff also denied that Reimer asker her to confirm that the premises were within the P.S. 290 School District. Affidavit in Opposition at ¶ 32. Based on the assurances, plaintiff authorized Reimer to bid on the premises, and eventually plaintiff executed a contract of sale for the premises. Affidavit in Opposition at ¶ 35.
On May 11, 2006, after the contract had been executed, plaintiff alleges that she learned that the premises were not within the P.S. 290 School District, but rather was within a lottery zone whereby her children would be placed in any Upper East Side school and with no guarantee that her children would be in the same school. Affidavit in Opposition at ¶ 36. Plaintiff attempted to get out of the contract, but was rebuffed by the seller. Approximately two months later, the closing was held and title to the premises was transferred to plaintiff.
Although Reimer concedes that plaintiff asked her to show her apartments, Reimer did not sign or otherwise agree to any such oral contract. Affidavit in Support of Motion at ¶ 2. Reimer also stated, and plaintiff concede, that it was plaintiff who located the premises and asked Reimer to be her broker and show her the apartments. Reimer also alleges that before plaintiff expressed any concern about the premises' school district, her bid on the premises had already been accepted. Reimer also denied that she represented that the premises were within the P.S. 290 School District. While the listing agent, who was not associated with Coldwell, represented that the premises was within the P.S. 290 School District, Reimer asserts that she told plaintiff that plaintiff should confirm this information herself. [*3]
When plaintiff contacted Reimer on May 11, 2006, to notify her that the premises were not within the P.S. 290 School District, Reimer reviewed the NYC Department of Education website, which seemed to indicate that the premises was within the P.S. 290 School District, see Plaintiff's Exhibit E, and e-mailed plaintiff that based on her review, the premises definitely appeared to be within the P.S. 290 School District. See Plaintiff's Exhibit F (Reimer's e-mail to plaintiff e-mail).
On April 19, 2006, plaintiff and Coldwell entered into a written agreement which provided that Coldwell would have exclusive rights to sell plaintiff's old apartment in exchange of Colwell receiving five percent of the selling price. Plaintiff Exhibit D. Reimer notes that there is no reference to any other agreement in the April 19, 2006 agreement.
In her complaint, plaintiff raised five causes of action: fraud (first); negligent misrepresentation (second); breach of fiduciary duties (third); breach of contract (fourth); and, recision of the April 19, 2006, written contract (fifth). Defendants move to dismiss the complaint on the grounds that caveat emptor precludes the fraud and negligent misrepresentation claims; that there was no oral contract other than an agreement to help plaintiff find an apartment in the Upper East Side; and that the breach of fiduciary duty is duplicative of the breach of contract claim.
Analysis
It is well settled that the proponent of a motion for summary judgment must establish that "there is no defense to the cause of action or that the cause of action or defense has no merit," (C.P.L.R. §3212[b]), sufficiently to warrant the court as a matter of law to direct judgment in his or her favor. Bush v. St. Claire's Hospital, 82 NY2d 738, 739 (1993); Winegrad v. New York University Medical Center, 64 NY2d 851, 853 (1985). This standard requires that the proponent of the motion "tender[] sufficient evidence to eliminate any material issues of fact from the case," id., "by evidentiary proof in admissible form." Zuckerman v. City of New York, 49 NY2d 557, 562 (1980). Thus, the motion must be supported "by affidavit [from a person having knowledge of the facts], by a copy of the pleadings and by other available proof, such as depositions." C.P.L.R. §3212(b).
Where the proponent of the motion makes a prima facie showing of entitlement to summary judgment, the burden shifts to the party opposing the motion to demonstrate by admissible evidence the existence of a factual issue requiring a trial of the action, or to tender an acceptable excuse for his or her failure to do so. Vermette v. Kenworth Truck Company, 68 NY2d 714, 717 (1986); Zuckerman v. City of New York, supra, 49 NY2d at 560, 562. Like the proponent of the motion, the party opposing the motion must set forth evidentiary proof in admissible form in support of his or her claim that material triable issues of fact exist. Id. at 562.
In an action to recover for fraud, the plaintiff must prove a misrepresentation or a material [*4]omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury. Lama Holding Co. V. Smith Barney Inc., 88 NY2d 413, 421 (1996); Pace Communications v. Amsale Aberra, 6 Misc 3d 1022(A) (Sup. Ct. NY County 2005). "[W]here one party possesses superior knowledge, not readily available to the other, and knows that the other is acting on the basis of mistaken knowledge, there is a duty to disclose that information." Aaron Ferer & Sons Ltd v. Chase Manhattan Bank, 731 F.2d 112, 123 (2nd Cir. 1984); Swersky v. Dreyer and Traub, 219 AD2d 321, 327 (1st Dept. 1996).
In the present case, defendants established their prima facie entitlement to summary judgment dismissing the first cause of action alleging fraud inasmuch as there is no indication in the record before the Court that Reimer knew that the premises was not within the P.S. 290 School District. Indeed, the listing agent indicated that it was and the NYC Department of Education website seems to corroborate the claim. See Plaintiff's Exhibit E. The burden, thus shifted to plaintiff to raise triable issues of fact, which it has failed to do. Indeed, plaintiff's claim is more that Reimer failed to do her homework. That claim, however, is more properly pursued through her negligent misrepresentation and breach of contract causes of action. See Kelsey v. Turtis, 271 AD2d 644 (2nd Dept. 2000); Andover Realty, Inc. v. Western Elec. Co., Inc., 100 AD2d 157, 161 (1st Dept. 1984), aff'd, 64 NY2d 1006 (1985).
Defendants also established their prima facie entitlement to summary judgment dismissing the third cause of action for breach of fiduciary duty. "A fiduciary relationship may exist where one party reposes confidence in another and reasonably relies on the other's superior expertise or knowledge. Sergeants Benevolent Association Annuity Fund v. Renck, 19 AD3d 107 [(1st Dept. 2005)]." NY C.J.I. 3:59, Comments at p. 548. In order to be actionable, the claim for breach of fiduciary duty must be separate, distinct, and independent of the contract itself. Kaminsky v. FSP, Inc., 5 AD3d 251 (1st Dept. 2004); Sally Lou Fashions Corp. V. Marcille, 300 AD2d 224 (1st Dept. 2002). Here, viewing the evidence in the light most favorable to plaintiff, Kesselman v. lever House Restaurant, 29 AD3d 302 (1st Dept. 2006)(on a defendant's motion for summary judgment, the evidence should be liberally construed in a light most favorable to the plaintiff), the alleged breach is premised on Reimer's failure to ascertain the correct school district, which was a term specifically negotiated by the parties. Without that provision in the alleged oral contract, Reimer had no independent duty to ascertain the school district for plaintiff based solely on her agency relationship. Nor has plaintiff raise any triable issues of fact with respect to her fiduciary claim. Her assertion that the theories are independent because her breach of contract claim is asserted against Coldwell only does not save her breach of fiduciary claim. The claim exist only because it was specifically bargained for in the oral agreement.
With respect to the other causes of action, defendants have failed to establish their entitlement to summary judgment, and even if they had, there are triable issues of fact, inter alia, as to whether Reimer made negligent misrepresentations and whether there was in fact an oral contract. [*5]
Specifically, "[t]o recover on a theory of negligent misrepresentation, a plaintiff must establish that the defendant had a duty to use reasonable care to impart correct information because of some special relationship between the parties, that the information was incorrect or false, and that the plaintiff reasonably relied upon the information provided." [T]here may be liability . . . where there is a relationship between the parties such that there is an awareness that the information provided is to be relied upon for a particular purpose by a known party in furtherance of that purpose, and some conduct by the declarant linking it to the relying party and evincing the declarant's understanding of their reliance.'" Grammar v. Turits, 271 AD2d 644 (2nd Dept. 2000)(citations omitted). Here, viewing the evidence in the light most favorable to plaintiff, there are triable issues of fact as to whether plaintiff engaged Reimer for the express purpose of finding her an apartment within the P.S. 290 or P.S. 6 School Districts and whether plaintiff relied on Reimer's incorrect information.
Moreover, as this Court recently noted in Cohen v. Seinfeld, N.Y.L.J., Jan. 19, 2007, p. 23, col. 1, an oral brokerage contract is enforceable, General Obligations Law § 5-701(a)(10). Andover Realty, Inc. v. Western Elec. Co., Inc., 100 AD2d 157, 161 (1st Dept. 1984), aff'd, 64 NY2d 1006 (1985), and there are issues of fact as to whether there was in fact an oral agreement as well as the actual terms of the claimed agreement.
Defendants assertions to the contrary, caveat emptor does not preclude plaintiff claims. The doctrine of caveat emptor "imposes no duty upon the vendor to disclose any information concerning the premises . . . unless there is a confidential or fiduciary relationship between the parties." Stambovsky v. Ackley, 169 AD2d 254, 257 (1st Dept. 1991). Plaintiff's claims, however, are not against the seller of the premises, even though the property was listed as being within the P.S. 290 School District. Rather, plaintiff's claim is against defendants, whom she relied on based, inter alia, on the terms of the alleged oral contract, to ascertain the accuracy of that information.
Based on the foregoing, it is hereby
ORDERED that defendants' motion pursuant to CPLR 3212 for an order dismissing the complaint is granted solely to the extent that the first (fraud) and third (breach of fiduciary duty) causes of action are dismissed.
This constitutes the Decision and Order of the Court.
Dated: January 29, 2007ENTER
[*6]
___________________________
Rolando T. Acosta, J.S.C.