| Smith v Ameriquest Mtge. Co. |
| 2009 NY Slip Op 02586 [60 AD3d 1037] |
| March 31, 2009 |
| Appellate Division, Second Department |
| Maudline Smith, Appellant-Respondent, v AmeriquestMortgage Company et al., Respondents-Appellants, and Nationscredit Financial ServicesCorporation et al., Respondents. |
—[*1] Holland & Knight, LLP, New York, N.Y. (Michael J. Frevola of counsel), forrespondents-appellants.
In an action, inter alia, to rescind mortgage notes and to recover damages for fraud andnegligent misrepresentation, the plaintiff appeals from stated portions of an order of the SupremeCourt, Queens County (Agate, J.), dated September 18, 2006, and the defendants AmeriquestMortgage Company, Jason Simms, and Mark Lindenmann cross-appeal, as limited by their brief,from so much of the same order as denied those branches of their motion which were forsummary judgment dismissing the first, second, and third causes of action and the punitivedamages claim insofar as asserted against Ameriquest Mortgage Company and Jason Simms.
Ordered that the appeal by the plaintiff is dismissed as abandoned (see 22 NYCRR670.8 [e]); and it is further,
Ordered that the cross-appeal by the defendant Mark Lindenmann is dismissed, as he is notaggrieved by the portion of the order cross-appealed from (see CPLR 5511); and it isfurther,
Ordered that the order is affirmed insofar as cross-appealed from by Ameriquest MortgageCompany and Jason Simms; and it is further,
Ordered that one bill of costs is awarded to the plaintiff, payable by the defendants Jason[*2]Simms and Ameriquest Mortgage Company.
The plaintiff was solicited by the defendant Jason Simms, on behalf of the defendantAmeriquest Mortgage Company (hereinafter Ameriquest), to refinance the mortgage on herhome. According to the plaintiff, in order to induce her to enter into the loan transaction, Simmsrepresented to her that, after the refinancing, several debts she owed to various creditors wouldbe consolidated, her monthly mortgage payments would be lower, and she would receive a$10,000 disbursement from the refinanced loan. However, after entering into the transaction, theplaintiff's other debts were not consolidated, her monthly payments were slightly higher, and shedid not receive a $10,000 disbursement. The plaintiff commenced the instant action against,among others, Simms and Ameriquest (hereinafter together the defendants), alleging fraud,negligent misrepresentation, and promissory estoppel, and also sought punitive damages inconnection with the fraud claim. The defendants moved for summary judgment, inter alia,dismissing these causes of action, as well as the punitive damages claim. The Supreme Courtdenied these branches of the defendants' motion. We affirm.
As the Supreme Court properly concluded, the defendants failed to make a prima facieshowing of their entitlement to judgment as a matter of law dismissing the first cause of actionalleging fraud. To establish a prima facie case of fraud, "a plaintiff must present proof that (1)the defendant made material representations that were false, (2) the defendant knew therepresentations were false and made them with the intent to deceive the plaintiff, (3) the plaintiffjustifiably relied on the defendant's representations, and (4) the plaintiff was injured as a result ofthe defendant's representations" (Cohen v Houseconnect Realty Corp., 289 AD2d 277,278 [2001]). Conceding the first and fourth elements for purposes of their summary judgmentmotion, the defendants contend that the plaintiff could not have relied on the alleged oralrepresentations made by Simms because they were contradicted by the written disclosuredocuments signed by the plaintiff. However, the written documents produced by the defendantsdo not clearly and unambiguously contradict the oral representations made to the plaintiff bySimms (cf. Romero v Khanijou, 212 AD2d 769, 770 [1995]). Therefore, a triable issue offact exists as to whether the plaintiff was entitled to rely upon those representations made to herbefore she signed the written documents (cf. Lewin Chevrolet-Geo-Oldsmobile v Bender,225 AD2d 916, 918 [1996]; Baltzly v Sandoro, 186 AD2d 1077 [1992]). We note, inthis regard, that the plaintiff is an unsophisticated consumer rather than a person experienced inbusiness (cf. J & J Structures v Callanan Indus., 215 AD2d 890, 891-892 [1995];Marine Midland Bank v Embassy E., 160 AD2d 420, 422 [1990]; Sterling Natl. Bank& Trust Co. of N.Y. v I. S. A. Merchandising Corp., 91 AD2d 571, 572 [1982]).
Furthermore, after signing the written documents produced by the defendants, the plaintifftimely exercised her right to cancel the loan. The plaintiff alleges, and the defendants do notdispute for purposes of the motion, that Simms subsequently came to her home and representedto her that a check to her for $10,000, and checks to the creditors whom the plaintiff was led tobelieve would be paid off in connection with the refinancing but were not, had been written andmailed. In reliance upon this representation, the plaintiff alleges, she reinstated the loan. Thus,even if the plaintiff can be deemed to have known that the written documents she signedcontradicted and superseded the prior oral representations made to her, there were no writtendocuments contradicting the new representations made by Simms after the loan was cancelled.Accordingly, that branch of the defendants' motion which was for summary judgment dismissingthe fraud cause of action was properly denied.[*3]
The defendants also failed to establish their prima facieentitlement to judgment as a matter of law with respect to the plaintiff's second cause of actionalleging negligent misrepresentation because they failed to establish, as a matter of law, that theyhad no duty to exercise reasonable care when providing information to the plaintiff regarding theloan transaction. Simms personally solicited the plaintiff to refinance her mortgage withAmeriquest, and came to her home twice to provide her with information about the transaction inan effort to convince her that the transaction was in her best interests. Under thesecircumstances, there is a triable issue of fact as to whether the nature of the relationship betweenthe parties imposed a duty of care upon the defendants (see Kimmell v Schaefer, 89NY2d 257, 263-265 [1996]; Caprer v Nussbaum, 36 AD3d 176, 197 [2006];Grammer v Turits, 271 AD2d 644, 645 [2000]; Houlihan/Lawrence, Inc. v Duval,228 AD2d 560, 561 [1996]).
The defendants failed to demonstrate that, as a matter of law, punitive damages wereunavailable (see Randi A. J. v Long Is. Surgi-Ctr., 46 AD3d 74, 81 [2007]). Further,Ameriquest did not provide any evidence, such as an affidavit from a managerial employee, tomeet its prima facie burden of establishing that it did not authorize, participate in, consent to, orratify the conduct giving rise to the plaintiff's damages (see Loughry v Lincoln First Bank,67 NY2d 369, 378 [1986]; Gallo v 800 Second Operating, 300 AD2d 537, 538[2002]). As such, that branch of the defendants' motion which was for summary judgmentdismissing the claim for punitive damages alleged in connection with the plaintiff's fraud causesof action was properly denied.
Moreover, the Supreme Court correctly found that a triable issue of fact existed as to theplaintiff's third cause of action alleging promissory estoppel.
The defendants' remaining contentions are without merit. Fisher, J.P., Angiolillo, Balkin andBelen, JJ., concur.