DeAngelis v. Timberpeg East, Inc.DeAngelis v. Timberpeg East, Inc.
Prompted by advertisements in a regional paper for “Timber Frame Homes” by defendants Timberpeg East, Inc., Timberpeg Services, Inc. and T-Peg, Inc. (hereinafter collectively referred to as Timberpeg), plaintiffs attended various Timberpeg open houses. After being advised by Timberpeg personnel that defendant John S. Shafer was an authorized Timberpeg representative serving the area in which plaintiffs sought to construct a home, they attended his open house and met John S. Shafer and defendant John H. Shafer. According to plaintiffs, both the Shafers and a Timberpeg manager held the Shafers out as authorized representatives of Timberpeg and assured plaintiffs that they were experienced and specially trained builders of Timberpeg homes. Plaintiffs were also led to believe that Timberpeg would be involved in all aspects of the design and construction of the home and that the Shafers would be acting under Timberpeg’s supervision.
Based upon these representations, plaintiffs signed a “Timberpeg Package” order form which contained a limited warranty stating that Timberpeg was merely a supplier of design plans and building materials and did not guarantee the work of the Shafers. Yet, according to plaintiffs, even after signing the order form Timberpeg assured them that it would “conduct normal on site visits, remain involved with the construction of the house, and make sure [it] was properly constructed.” Thereafter, plaintiffs entered into a contract with the Shafers for the construction of the home. Soon after construction began in September 2003, plaintiffs became dissatisfied with the work and complained to Timberpeg about the Shafers’ poor workmanship, defective work product and failure to meet contractual deadlines. Following months of little progress, plaintiffs terminated their contract with the Shafers on February 25,
Plaintiffs subsequently commenced the instant action against Timberpeg and the Shafers. The Shafers’ preanswer motion to dismiss pursuant to
Initially, we disagree with defendants’ assertion that Supreme Court should have converted their motions to dismiss into motions for summary judgment because plaintiffs “deliberately chart[ed]” such a procedural course by cross-moving for summary judgment (Four Seasons Hotels v Vinnik, 127 AD2d 310, 320 [1987]). Plaintiffs’ cross motion for summary judgment was limited to the narrow issue of the Shafers’ personal liability. Moreover, the issues raised in defendants’ motions to dismiss were ones of fact, rather than law (cf. Historic Albany Found. v Breslin, 282 AD2d 981, 983 [2001], lv dismissed 97 NY2d 636 [2001]). In addition, in an affidavit opposing defendants’ motions, plaintiffs’ counsel clearly argued that summary judgment treatment of the remaining issues was premature and that discovery was necessary to offer sufficient evidentiary proof as to the substance of their various claims (see Lockheed Martin Corp. v Aatlas Commerce, Inc., 283 AD2d 801, 803 [2001]; Henbest & Morrisey v W.H. Ins. Agency, 259 AD2d 829, 830 [1999]; Four Seasons Hotels v Vinnik, 127 AD2d at 321). As such, Supreme Court properly declined to treat defendants’ motions, except that portion of the Shafers’ motion which sought dismissal of plaintiffs’ claims on the basis of personal liability, as motions for summary judgment.
Substantively, defendants assert that Supreme Court erred in denying their motions to dismiss plaintiffs’ causes of action for deceptive practices, false advertising and fraud. On such motion to dismiss pursuant to
As to plaintiffs’ claims against defendants under the
The allegations of plaintiffs’ complaint, taken as true, as well as the assertions contained in the supporting affidavits in opposition to defendants’ motions, satisfy the elements of each cause of action. Specifically, the complaint alleges that Timberpeg engaged in consumer-oriented acts by representing itself, through an advertisement disseminated to the public in a regional magazine, flyers and open houses, as the purveyor of a “package” of products and services necessary to provide a completed Timberpeg home. The advertisement lists “John Shafer“—without distinguishing between the Shafers—as a servicer of Timberpeg’s product and contains his contact information.1 The complaint and supporting affidavits further allege that the Shafers and Timberpeg’s manager represented to both plaintiffs and the public at large that the Shafers were trained, experienced and competent representatives of Timberpeg who, under Timberpeg’s continuing supervision, could reproduce a Timberpeg home of the quality shown in the advertisement and at the open houses. The aforementioned conduct is alleged to be false and misleading in that Timberpeg was responsible for only the building supplies for Timberpeg homes, the Shafers did not
We reject Timberpeg’s argument that plaintiffs could not have been deceived or misled because the contract they signed contained a merger clause and specifically disclaimed liability for the performance of the representative who assembles the home, as these clauses are “not determinative of plaintiffs’ [
We agree, however, with defendants’ contention that plaintiffs have failed to state a cause of action for common-law fraud against them. “To make out a prima facie case of fraud, the complaint must contain allegations of a representation of material fact, falsity, scienter, reliance and injury” (Small v Lorillard Tobacco Co., 94 NY2d 43, 57 [1999]; see Wilsen Assoc. Real Estate Corp. v Pizilly, 204 AD2d 777, 778 [1994]). Plaintiffs’ allegations regarding this cause of action essentially mirror those made in connection with their
Having found that plaintiffs have stated a cause of action for deceptive practices and false advertising, we next address the
With respect to plaintiffs’ breach of contract claims, we agree with Supreme Court that issues of fact exist precluding summary judgment on the issue of the personal liability with respect to John S. Shafer, but not as to John H. Shafer. It is well settled that an individual who signs a contract as an agent for an entity will be held personally liable on the contract if the agency relationship is not disclosed (see McClure v Central Trust Co. of N.Y., 165 NY 108, 128 [1900]; New England Mar. Contrs. v Martin, 156 AD2d 804, 805 [1989]; Tarolli Lbr. Co. v Andreassi, 59 AD2d 1011, 1011-1012 [1977]; see also Restatement [Third] of Agency § 6.03). In his affidavit, John S. Shafer states that while he signed the subject construction contract with plaintiffs, he did so in his capacity as chief operating officer of Authentic Adirondack Homes, LLC and that plaintiffs were aware of his status as an agent of such company. However, the construction contract at issue denominates the contractor as “Authentic Adirondack homes” and the owner as “Tony DeAngelis,” and lists “John Shafer” as the person who solicited and/or negotiated the contract. Further, the contract is signed by “John Shafer” without denoting any corporate or representative status. Moreover, there is no reference in the contract to the status of Authentic Adirondack Homes as a limited liability company (see
Defendants’ remaining contentions, including the Shafers’ argument that plaintiffs’ claims under the
Carpinello, Kane, Malone Jr. and Stein, JJ., concur. Ordered that the order is modified, on the law, without costs, by reversing so much thereof as denied defendants’ motions to dismiss the common-law fraud cause of action; motions granted to that extent and said cause of action dismissed; and, as so modified, affirmed.