Joseph v. NRT Inc.

18 Misc. 3d 296
CourtCivil Court of the City of New York
DecidedNovember 9, 2007
StatusPublished

This text of 18 Misc. 3d 296 (Joseph v. NRT Inc.) is published on Counsel Stack Legal Research, covering Civil Court of the City of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Joseph v. NRT Inc., 18 Misc. 3d 296 (N.Y. Super. Ct. 2007).

Opinion

OPINION OF THE COURT

Cynthia Kern, J.

Plaintiffs commenced the present action against defendants asserting claims for fraud and negligent misrepresentation. Defendants NRT Incorporated, NRT New York, Inc. doing business as the Corcoran Group, the Corcoran Group Eastside, Inc. doing business as the Corcoran Group, Inc., Elizabeth Spahr and Dorothy Zeidman (the NRT defendants) move for summary judgment dismissing the complaint as against them. For the reasons set forth below, the NRT defendants’ motion is granted.

The relevant facts are as follows. In 2005, plaintiffs purchased what they believed was a three-bedroom condominium apartment but what turned out to be a legal one-bedroom apartment from defendant Cynthia Rowley. Rowley had renovated the apartment in 1998 and converted it from its original one-bedroom configuration into a three-bedroom apartment. These renovations did not comply with the New York City Building Code because the windows of the two smaller bedrooms did not face a street or legal courtyard. Thus, the apartment is not a legal three-bedroom apartment although each of the bedrooms has a window and the plaintiffs continue to use these rooms as bedrooms.

Defendant Dorothy Zeidman, an employee of the Corcoran Group, was the listing broker for the apartment. Defendant Elizabeth Spahr, also an employee of the Corcoran Group, was the plaintiffs’ broker and was the selling agent for the apartment. The written advertising materials provided by the Corcoran Group for the apartment depicted it as a five-room, three-bedroom apartment. Defendant Zeidman alleges that she listed the apartment on the listing form as a three-bedroom apartment based upon information she received from the seller and her inspection of the apartment. Additionally, Zeidman, in Spahr’s presence, had said to plaintiffs that the apartment was a three-bedroom apartment. The listing contained the following disclaimer:

“All information furnished regarding property for sale, rental or financing is from sources deemed reliable, but no warranty or representation is made as [298]*298to the accuracy thereof and same is submitted subject to errors, omissions, change of price, or other conditions prior [to] sale, lease or financing or withdrawal without notice. All dimensions are approximate. For exact dimensions, you must hire your own architect or engineer.”

The NRT defendants state that they did not know that the apartment had been changed from a one-bedroom to a three-bedroom apartment when they made the written and oral representations to plaintiffs.

After viewing the apartment with Zeidman and Spahr, plaintiffs made an offer to purchase the apartment. Plaintiffs’ offer was accepted. After the offer was accepted but before plaintiffs signed a contract of sale, Zeidman sent to plaintiffs’ attorney the condominium offering plan documents which described the apartment as a one-bedroom residential loft apartment. The original floor plan depicting the apartment as a one-bedroom loft with a living room was included in the offering plan documents. Zeidman also sent the certificate of occupancy for the building, which described the permissible use and occupancy of the apartment as a one-room “Class A” apartment. Plaintiffs viewed the apartment six or seven additional times and then signed a contract of sale. Approximately three months after the plaintiffs and the seller signed the contract of sale, plaintiffs closed on the apartment. Plaintiffs admit that they never read the contract nor did they hire an architect, engineer or other professional to ensure that the physical layout of the apartment complied with that shown in the offering plan.

The NRT defendants made a previous motion for summary judgment, which was denied by Justice Ling-Cohan in Supreme Court, New York County. This denial was affirmed by the Appellate Division, First Department, on the grounds that summary judgment was premature as “no discovery had been conducted and questions of fact exist as to whether the brokers, individually and as agents for the seller, materially misrepresented the number of legal bedrooms in the unit and, if so, whether plaintiffs justifiably relied on such misrepresentations.” (Joseph v NRT Inc., 43 AD3d 312, 313 [1st Dept 2007].) The Appellate Division did hold that “[t]he general disclaimer clause in the contract of sale would not bar parol evidence, as there was no specific disclaimer in the contract regarding reliance on representations as to the legality of bedrooms.” (Id.) The Court went on to note, “Defendants are correct in contend[299]*299ing that they would not be liable for the alleged misrepresentation if the facts misrepresented were not matters peculiarly within their knowledge and plaintiffs had the means to discover the truth by the exercise of ordinary intelligence.” (Id.) However, the Court declined to grant summary judgment because nothing in the record at that point gave plaintiffs notice that the extra bedrooms were not legal. (Id.)

In order to make out a claim for fraud, plaintiffs must prove “a misrepresentation or a material 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, 88 NY2d 413, 421 [1996].) The Appellate Division has already held in this case that plaintiffs would not be justified in relying on any alleged misrepresentation by the NET defendants as to the amount of legal bedrooms “if the facts misrepresented were not matters peculiarly within [defendants’] knowledge and plaintiffs had the means to discover the truth by the exercise of ordinary intelligence.” (Joseph, 43 AD3d at 313.) In 1537 Assoc, v Kaprielian Enters. (259 AD2d 447 [1st Dept 1999]), the Appellate Division dismissed defendants’ counterclaim for fraud. The Court held that defendants could not have reasonably relied on plaintiff’s misrepresentation regarding the size of the premises to be rented because the dimensions of the premises were not within the plaintiffs peculiar knowledge as defendants could have measured the dimensions themselves. In Bennett v Citicorp Mtge., Inc. (8 AD3d 1050 [4th Dept 2004]), the Court granted summary judgment dismissing plaintiffs’ claims of fraud and negligent misrepresentation. The Court held that plaintiffs’ reliance on the representation of the listing agent as to the number of acres that were included in the sale of the property at issue was not reasonable since the seller’s “ownership of only five acres was a matter of public record, readily ascertainable from the abstract of title provided to plaintiffs’ attorney for her review prior to the closing” (at 1050). Similarly, in DiFilippo v Hidden Ponds Assoc. (146 AD2d 737 [2d Dept 1989]), the plaintiff claimed that the defendant sellers had fraudulently induced him into purchasing a townhouse by telling him that he would be able to rent out the unit when in fact the zoning regulations prohibited this. The Court granted summary judgment dismissing the complaint on the ground that “the plaintiffs failure to ascertain for himself the restrictions of the [300]*300Zoning Ordinance precludes his claim of fraudulent inducement” because the zoning ordinance “[was] not a matter peculiarly within the defendants’ knowledge and the plaintiff could have easily made inquiry as to whether it would permit him to rent the townhouse to a third party.” (Id. at 738.)

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Related

Lama Holding Co. v. Smith Barney Inc.
668 N.E.2d 1370 (New York Court of Appeals, 1996)
Bennett v. Citicorp Mortgage, Inc.
8 A.D.3d 1050 (Appellate Division of the Supreme Court of New York, 2004)
Joseph v. NRT Inc.
43 A.D.3d 312 (Appellate Division of the Supreme Court of New York, 2007)
DiFilippo v. Hidden Ponds Associates
146 A.D.2d 737 (Appellate Division of the Supreme Court of New York, 1989)
Hausler v. Spectra Realty, Inc.
188 A.D.2d 722 (Appellate Division of the Supreme Court of New York, 1992)
23 Realty Associates v. Teigman
213 A.D.2d 306 (Appellate Division of the Supreme Court of New York, 1995)
1537 Associates v. Kaprielian Enterprises, Inc.
259 A.D.2d 447 (Appellate Division of the Supreme Court of New York, 1999)
Berger-Vespa v. Rondack Building Inspectors, Inc.
293 A.D.2d 838 (Appellate Division of the Supreme Court of New York, 2002)

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Bluebook (online)
18 Misc. 3d 296, Counsel Stack Legal Research, https://law.counselstack.com/opinion/joseph-v-nrt-inc-nycivct-2007.