874 N.Y.S.2d 508 | N.Y. App. Div. | 2009
Ordered that the appeal from the order entered July 13, 2006 is dismissed, as that order was superseded by the order entered January 8, 2008, in effect, made upon reargument; and it is further,
Ordered that the order entered January 8, 2008 is modified, on the law, (1) by deleting the provision thereof which, in effect, upon reargument, adhered to so much of the original determination in the order entered July 13, 2006 as granted those branches of the motion of the defendants Holiday Organization, Inc., Hamlet on Olde Oyster Bay Development Corp., Hamlet on Olde Oyster Bay, LLC, Hamlet on Olde Oyster Bay Development Co., LLC, O.B. Ventures Corp., Gerald Monter, Elliot Monter, Marilyn Monter, Richard Spirio, Joseph Mancino, John Bransfield, Jr., Jeffrey Wall, R. Patrick Quinn, Michael Puorro, Ron Bloomfield, Holiday Management Associates, Inc., Hamlet on Olde Oyster Bay Food and Beverage Corp., Holcom Incorporated, Schiffer Management Group, and Joseph Gill Schiffer pursuant to CPLR 3211 (a) (1), (3), (5) and (7) which were to dismiss the causes of action alleging fraudulent inducement and negligent misrepresentation insofar as asserted against all of those defendants except for the defendants O.B. Ventures Corp., Holcom Incorporated, and Hamlet on Olde Oyster Bay Food and Beverage Corp., and to dismiss the causes of action alleging breach of fiduciary duty insofar as asserted against all of those defendants except for the defendants O.B. Ventures Corp., Holcom Incorporated, and Hamlet on Olde Oyster Bay Food and
Ordered that one bill of costs is awarded to the plaintiffs, payable by the respondents appearing separately and filing separate briefs.
The plaintiffs in this action are Hamlet on Olde Oyster Bay Home Owners Association (hereinafter the Association), Hamlet on Olde Oyster Bay Villa Condominium, Hamlet on Olde Oyster Bay Carriage Home Condominium, and individual owners of units within the Hamlet on Olde Oyster Bay Development (hereinafter the owners). Shortly after moving into their newly-constructed residences, the owners allegedly experienced problems, inter alia, with their heating, air conditioning, and plumbing systems. Similar problems allegedly occurred in the development’s common-area buildings. The Association drastically increased assessments after the first year to repair the al
Thereafter, the plaintiffs commenced this action against, among others, the following defendants: Hamlet on Olde Oyster Bay, LLC, the sponsor; Hamlet on Olde Oyster Bay Development Co., LLC, a member of the sponsor; Gerald Monter, Elliot Monter, Marilyn Monter, Richard Spirio, Joseph Mancino, John Bransfield, Jr., Jeffrey Wall, R. Patrick Quinn, and Michael Puorro, the principals of the members; Holiday Organization, Inc., and Hamlet on Olde Oyster Bay Development Corp., the sponsor’s parent organizations (hereinafter collectively the Holiday defendants); Schiffer Management Group and Joseph Gill Schiffer (hereinafter together the real estate broker); Sidney B. Bowne & Sons, LLP and Dane C. Kenny (hereinafter together the engineering firm); and Charles A. DiGiovanna Architect and Charles A. DiGiovanna (hereinafter together the architectural firm).
The Supreme Court erred in granting that branch of the Holiday defendants’ motion which was to dismiss the causes of action alleging fraudulent inducement insofar as asserted against them. While there is no express or implied private right of action under the Martin Act (see General Business Law § 352 et seq.), private causes of action sounding in common-law fraud may rest upon the same facts that would support an alleged Martin Act violation as long as they are sufficient to satisfy traditional rules of pleading and proof (see Caboara v Babylon Cove Dev., LLC, 54 AD3d 79, 80 [2008]). Here, the plaintiffs pleaded all the elements of fraud with particularity (see CPC Intl. v McKesson Corp., 70 NY2d 268, 284-286 [1987]). It is important to emphasize that this appeal arises from an order granting a pre-discovery motion to dismiss, not an order awarding summary judgment (see Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34, 37 [2006]). “There is no legitimate reason to question at the pleading stage the ability of the plaintiff[s] to prove all of the essential elements of common-law fraud” (Kramer v W10Z/515 Real Estate Ltd. Partnership, 44 AD3d 457, 459 [2007]).
The Supreme Court also erred in granting that branch of the Holiday defendants’ motion which was to dismiss the causes of action alleging negligent representation insofar as asserted against them as “nothing in the clear import of the language of the Martin Act requires a conclusion that the Legislature intended to abrogate any common-law remedy arising from conduct prohibited under the act” (Caboara v Babylon Cove Dev., LLC, 54 AD3d at 83).
The Supreme Court correctly found that the plaintiffs could seek damages for breach of contract based upon specific provisions of the purchase agreements, as well as for breach of the limited warranty (see Tiffany at Westbury Condominium v Marelli Dev. Corp., 40 AD3d 1073 [2007]). The Supreme Court also properly granted those branches of the Holiday defendants’ motion which were to dismiss the causes of action alleging negligence insofar as asserted against the sponsor based upon construction defects, as these claims were duplicative of the causes of action alleging breach of contract (see Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 389 [1987]; Old Republic Natl. Tit. Ins. Co. v Cardinal Abstract Corp., 14 AD3d 678 [2005]).
However, the Supreme Court erred in granting those branches of the motions of the real estate broker, the engineering firm, and the architectural firm which were to dismiss the causes of action alleging breach of contract, fraudulent inducement, negligent misrepresentation, and negligence/malpractice insofar as asserted against them. These defendants failed to submit documentary proof that the plaintiffs were not third-party beneficiaries of their contracts with the sponsor (see Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002]; see also Kerusa Co. LLC v W10Z/515 Real Estate Ltd. Partnership, 50 AD3d 503 [2008]; Board of Mgrs. of Alfred Condominium v Carol Mgt., 214 AD2d 380 [1995]).
The Supreme Court erred in granting that branch of the Holiday defendants’ motion which was to dismiss the complaint insofar as asserted against Holiday Organization, Inc., Hamlet on Olde Oyster Bay Development Corp., Hamlet on Olde Oyster Bay Development Co., LLC, Joseph Mancino, John Bransfield, Jr., Jeffrey Wall, R. Patrick Quinn, and Michael Puorro (see Birnbaum v Yonkers Contr. Co., 272 AD2d 355 [2000]).
We decline the request of the Holiday defendants and the real estate broker to impose a sanction pursuant to 22 NYCRR 130-1.1 (c) (1) against the plaintiffs, as this appeal is not frivolous as defined therein (see Chardavoyne v Cohen, 56 AD3d 508 [2008];