Zana Dobroshi, on Behalf of Herself and All Others Similarly Situated, Respondent-Appellant, v Bank of America, N.A., Appellant-Respondent.
Supreme Court, Appellate Division, First Department, New York
2008
886 N.Y.S.2d 106
Andrias, J.P., Moskowitz, DeGrasse and Richter, JJ.
Contrary to defendant’s claim, the second cause of action pleads fraud with sufficient particularity to satisfy
Plaintiff’s allegation that defendant deliberately underestimated settlement costs to induce her to obtain a loan from it, rather than from a competing lender states a claim for fraud
The motion court also noted that plaintiff went forward with the closing despite the increased costs. However, under the circumstances, that was the only sensible thing for plaintiff to do (see Negrin v Norwest Mtge., 263 AD2d 39, 50 [1999]). Contrary to defendant’s contention, plaintiff’s damages are not speculative. She alleges that she was forced to pay $4,000 for defendant’s attorney’s services, that this amount was excessive, that the GFE estimated that the attorney’s fees would be $450, and that the prevailing customary charge in New York City for the lending bank’s attorney’s fees ranges from $450 to $800. Furthermore, because the fraud claim is reinstated, plaintiff’s demand for punitive damages is also reinstated, since “[i]t is for the jury to decide whether [defendant’s actions] were so reprehensible as to warrant punitive damages” (Swersky v Dreyer & Traub, 219 AD2d 321, 328 [1996]).
The third cause of action (negligent misrepresentation) was correctly dismissed. “[L]iability for negligent misrepresentation has been imposed only on those persons who possess unique or specialized expertise, or who are in a special position of confidence and trust with the injured party such that reliance on the negligent misrepresentation is justified” (Kimmell v Schaefer, 89 NY2d 257, 263 [1996]). This Court has repeatedly held that an arm’s length borrower-lender relationship is not of a confidential or fiduciary nature and therefore does not support a cause of action for negligent misrepresentation (see Korea First Bank of N.Y. v Noah Enters., Ltd., 12 AD3d 321, 323 [2004], lv denied 4 NY3d 710 [2005]; River Glen Assoc. v Merrill Lynch Credit Corp., 295 AD2d 274, 275 [2002]; FAB Indus. v BNY Fin. Corp., 252 AD2d 367 [1998]; Heller Fin. v Apple Tree Realty Assoc., 238 AD2d 198, 199 [1997], lv dismissed 90 NY2d 889 [1997]; Banque Nationale de Paris v 1567 Broadway Ownership Assoc., 214 AD2d 359, 360 [1995]). Defendant’s alleged superior knowledge of, among other things, the legal fees typically charged by its counsel does not constitute the “unique or special expertise” required to depart from this rule.
For similar reasons, the fourth cause of action (breach of the duty to disclose) was correctly dismissed. Plaintiff has not established that defendant’s superior knowledge of essential facts renders the transaction without disclosure inherently
The fifth cause of action (conversion) was properly dismissed. “Two key elements of conversion are (1) plaintiff’s possessory right or interest in the property and (2) defendant’s dominion over the property or interference with it, in derogation of plaintiff’s rights” (Colavito v New York Organ Donor Network, Inc., 8 NY3d 43, 50 [2006] [citations omitted]). Here, the motion court did not dismiss the conversion claim because of plaintiff’s failure to satisfy the first element. Rather, it dismissed the claim due to her failure to satisfy the second element.
The sixth cause of action (unjust enrichment) was properly dismissed. It is not sufficient that a defendant is enriched; rather, the enrichment must be unjust (see McGrath v Hilding, 41 NY2d 625, 629 [1977]). While the closing costs more than doubled between the GFE and the HUD-1, defendant did not retain this increase.
The record shows that defendant has met its burden of showing that it is entitled to judgment as a matter of law dismissing the seventh and eighth causes of action alleging negligent training and negligent supervision, respectively. Plaintiff has not identified the laws, rules, regulations, and best practices standards that defendant allegedly violated (see Diaz v New York Downtown Hosp., 99 NY2d 542, 544-545 [2002]). Further, plaintiff, who has not sued any bank employee, has not shown that defendant knew of any “employee’s propensity to commit the tortious act or should have known of such propensity had the defendant conducted an adequate hiring procedure” (N.X. v Cabrini Med. Ctr., 280 AD2d 34, 42 [2001], mod on other grounds 97 NY2d 247 [2002]) or that defendant’s alleged negligent training was the proximate cause of plaintiff’s injuries.
The motion court should have stricken the class action allegations. First, individual issues will predominate because all claims under