J. Carey Smith 2019 Irrevocable Trust v. 11 W. 12 Realty LLC
2025 NY Slip Op 04045
N.Y. App. Div.2025Background
- Plaintiffs (J. Carey Smith 2019 Irrevocable Trust et al.) bought a townhouse in Greenwich Village from 11 West 12 Realty LLC for about $19.9 million.
- The contract of sale included specific 'as is' and reliance disclaimers and limited seller liability for latent and patent defects.
- Plaintiffs hired Old House Inspection Company, Inc. to conduct a pre-sale property inspection; various contractors/subcontractors had worked on renovations prior to the purchase.
- Post-closing, plaintiffs alleged multiple undisclosed defects in the property and brought suit on theories including breach of contract, fraud, nuisance, statutory violations, RICO, and unjust enrichment.
- The Supreme Court (NY County) dismissed all claims against the various defendants under CPLR 3211; plaintiffs appealed.
- The Appellate Division, First Department, unanimously affirmed all dismissals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of Contract by Seller & Affiliates | Sellers breached sale conditions & failed to disclose defects | Plaintiffs took property 'as is'; affiliates not parties to contract; merger doctrine bars claim | Dismissed—all contract claims barred by contract terms & merger doctrine |
| Fraud and Fraudulent Concealment | Sellers and contractors misrepresented/concealed defects | Contract expressly disclaims reliance; no special knowledge; disclaimers bar fraud claims | Dismissed—fraud barred by contract disclaimers, no reliance alleged |
| Breach by Inspection Company | Inspector failed to detect/report defects | Plaintiffs failed to comply with contract notice requirements | Dismissed—failure to comply with a condition precedent |
| Statutory & RICO Claims | Defendants violated GBL 349/777, and committed RICO conspiracy | Transaction not consumer-oriented; remodeled home not a "new home"; no pattern of racketeering | Dismissed—statutes inapplicable, RICO elements not met |
Key Cases Cited
- Danann Realty Corp. v. Harris, 5 N.Y.2d 317 (N.Y. 1959) (specific contractual disclaimers can bar fraud claims for misrepresentation)
- East Hampton Union Free School Dist. v. Sandpebble Bldrs., Inc., 16 N.Y.3d 775 (N.Y. 2011) (corporate acts through principals does not support veil-piercing without additional factors)
- Rivietz v. Wolohojian, 38 A.D.3d 301 (1st Dep't 2007) (purchase 'as is' bars post-sale property condition claims)
- Corsello v. Verizon N.Y., Inc., 18 N.Y.3d 777 (N.Y. 2012) (unjust enrichment claim not allowed where contract governs the subject matter)
- Domen Holding Co. v. Aranovich, 1 N.Y.3d 117 (N.Y. 2003) (private nuisance requires a pattern of continuing objectionable conduct)