Stokes v. Lusker

425 F. App'x 18
CourtCourt of Appeals for the Second Circuit
DecidedMay 27, 2011
Docket10-2254-cv
StatusUnpublished
Cited by4 cases

This text of 425 F. App'x 18 (Stokes v. Lusker) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Stokes v. Lusker, 425 F. App'x 18 (2d Cir. 2011).

Opinion

SUMMARY ORDER

Plaintiff-appellant Christian Stokes, a citizen and resident of Ireland, appeals from a judgment of the district court dismissing his complaint on the motions of defendants Ronald Lusker and Marilyn Kocher Lusker (“the Luskers”), Eric Mal-ley and the Malley Group (collectively, “Malley”), and Andrews Building Corp. and 85-87 Mercer Street Associates (collectively, “the co-op”). We assume the parties’ familiarity with the underlying facts, procedural history, and issues on appeal.

Unusually in the annals of New York City real estate, 1 plaintiffs complaint stems from a co-op board’s approval of his application to purchase an apartment. In 2007, plaintiff agreed to purchase a $14 million ground-floor co-operative unit in a Manhattan apartment building, intending to rent the unit to a commercial tenant— an arrangement that Malley, a real estate broker, had allegedly assured him would be possible and lucrative. After plaintiff had signed a contract to purchase the property, agreeing to submit a completed application to the co-op board, and put down a $250,000 initial deposit on the unit — but before the closing — he learned that the co-op’s bylaws and the property deed would bar him from renting the unit to a commercial tenant, because the unit could be used only as an artist live-work space. Plaintiff admits that this restriction was fully disclosed in the documents referenced in the contract, and that the defendants had provided these documents to plaintiffs attorney, but that he had failed to read them.

When plaintiff failed to close on the purchase, he lost his $250,000 deposit, which the contract permitted the unit’s sellers to keep as liquidated damages if plaintiff defaulted, unless that default was the result of the co-op board’s rejection of his application. Plaintiff then sued nearly everyone involved in the failed transaction — the broker, Malley; the sellers, the Luskers; the attorney he had hired to help him purchase the unit, Steven Ebert, and the attorney’s firm, Ebert & Associates (collectively “Ebert”); and the co-op — alleging New York state-law claims for breach of contract, unjust enrichment, negligence, fraud, and professional malpractice.

Malley and the Luskers separately moved to dismiss his complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). The co-op answered the complaint, and subsequently moved for a judgment on the pleadings, pursuant to Federal Rule of Civil Procedure 12(c). The district court (McMahon, J.) granted the motions. See Stokes v. Lusker, No. 08 Civ. 3667, 2009 WL 612336, at *5-9 (S.D.N.Y. Mar. 4, 2009). 2

On appeal, plaintiff argues that he set forth sufficient allegations to survive the *21 Rule 12(b)(6) and 12(c) motions. Additionally, for the first time on appeal, plaintiff suggests that the Luskers entered into an “illicit deal” with the co-op board, Appellant’s Br. at 13, whereby the Luskers paid the board “money (a bribe) to approve Stokes as a member they would not otherwise approve” so that the Luskers could retain the $250,000 deposit, id. at 9-10. Plaintiff argues that by dismissing his complaint, the district court “held that the Luskers were in fact permitted to use such illicit methodology,” id. at 12, and “implicitly said such actions were permissible,” id. at 14.

We review a district court’s grant of a Rule 12(b)(6) motion de novo, and “consider the legal sufficiency of the complaint, taking its factual allegations to be true and drawing all reasonable inferences in the plaintiffs favor.” Harris v. Mills, 572 F.3d 66, 71 (2d Cir.2009). We apply the same standard to Rule 12(c) motions. See Bank of N.Y. v. First Millennium, Inc., 607 F.3d 905, 922 (2d Cir.2010). Thus, to survive a motion under either Rule, “the complaint ‘must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.’ ” Id., quoting Hayden v. Paterson, 594 F.3d 150, 160 (2d Cir.2010).

Upon an independent and de novo review, we conclude that defendants’ Rule 12(b)(6) and 12(c) motions were properly granted, for substantially the same reasons stated in the district court’s memorandum and order. Plaintiffs fraud claims fail because, even assuming that defendants made oral misrepresentations to plaintiff regarding the possible uses of the unit, plaintiff cannot show that he reasonably relied on those misrepresentations. In the contract, the parties expressly disclaimed reliance on oral representations, Contract ¶ 14.1, and plaintiff represented that he had “examined and is satisfied with” the relevant documents, or “accepts and assumes the risk of not having examined” them, id. ¶ 5. Furthermore, plaintiff admits that he signed the agreement without reviewing the proprietary lease or the co-op offering plan, which the sellers made available to him, and which fully disclosed the very facts he claims were misrepresented to him. The district court correctly concluded that plaintiffs pleadings and admissions revealed that “he had the means to learn about the Property’s commercial use restrictions before he signed the contract ... but he failed to take advantage of those means. After expressly assuming the risk of any consequences that flow from not having read those documents, he cannot now claim that he is a victim of fraud.” Stokes, 2009 WL 612336, at *6 (emphasis omitted).

Plaintiffs negligent-misrepresentation claim against Malley fails for the same reason. Plaintiff alleged that Malley misrepresented to plaintiff that plaintiff would be able to lease the unit to a commercial tenant, and that Malley could find a commercial tenant for plaintiff after the purchase. But plaintiff cannot show that he reasonably relied on Malley’s alleged misrepresentations, as the restrictions on the property were clearly described in the contractual documents that plaintiff received but did not read. Furthermore, the district court correctly concluded that Malley’s alleged assurance that he could secure a commercial tenant for plaintiff is not actionable under New York law. An alleged misrepresentation cannot be “promissory or relating to future events that might never come to fruition.” Hydro Investors, Inc. v. Trafalgar Power, Inc., 227 F.3d 8, 20-21 (2d Cir.2000). Nor can it be “conelusory [or] constitute mere puffery.” Id. at 21, quoting Sheth v. N.Y. Life *22 Ins. Co., 273 A.D.2d 72, 709 N.Y.S.2d 74, 75 (1st Dep’t 2000). 3

Plaintiffs breach-of-contract claim against the Luskers is equally merit-less.

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Bluebook (online)
425 F. App'x 18, Counsel Stack Legal Research, https://law.counselstack.com/opinion/stokes-v-lusker-ca2-2011.