| Kurtz v Foy |
| 2009 NY Slip Op 06105 [65 AD3d 741] |
| August 6, 2009 |
| Appellate Division, Third Department |
| Bryan Kurtz et al., Respondents, v Thomas Foy et al.,Appellants. |
—[*1] Law Office of Frank M. Putorti Jr., P.C., Schenectady (Andrew J. Healey of counsel), forrespondents.
Garry, J. Appeal from that part of an order of the Supreme Court (Ferradino, J.), enteredJanuary 7, 2009 in Saratoga County, which partially denied defendants' motion to dismiss thecomplaint.
In November 2004, plaintiffs purchased from defendants a 3.28-acre parcel of lakefrontproperty in the Town of Greenfield, Saratoga County. A dirt-and-gravel roadway known asBraden Road runs across the property, roughly parallel to the shoreline. Plaintiffs claim that priorto their purchase and in response to their inquiries, defendants repeatedly assured them that theroadway was private. They allegedly showed plaintiffs a survey map on which the roadway wasmarked as private and advised that it was used by no one else, other than a short easement usedonly by a neighboring family to put their boat into the lake. Defendants allegedly stated that theyowned the property all the way to the shoreline and that plaintiffs would be able to build on topof the roadway or block it off if they chose. In addition, defendants completed, signed, andprovided a property condition disclosure statement in which they indicated that no one else had aright to use any portion of their property, "such as rights to use a road or path," and that no oneelse claimed to own any part of the property.
Before the closing, plaintiffs' attorney contacted the Town Clerk to confirm the status ofBraden Road and was allegedly advised that it was private. The realtor handling the sale madesimilar inquiries with the Town Building Department and was allegedly told that the roadwaywas private and that setbacks for construction on the property would therefore be measured from[*2]the lakefront rather than the roadway. Plaintiffs allegedlyalso spoke independently with the Town Clerk and with a Town Building Department employeeand were advised that Braden Road was private.
During the spring and summer following their purchase of the parcel, plaintiffs noticedparking and street signs erected by the Town on Braden Road, which they allege were not therewhen they bought the property, and cars using the roadway to access the parcel's beachfront.Upon investigation, they then learned that the roadway had been public since 1963, when theTown laid claim to it as a highway by use pursuant to Highway Law § 189. Plaintiffsfurther discovered that defendants knew of the roadway's public status and, in 1994, hadunsuccessfully petitioned the Town to abandon it. They also learned that during defendants' termof ownership members of the public had routinely used the parcel's lakefront and traversedBraden Road to reach it.
Plaintiffs commenced this action for rescission, alleging breach of warranty againstencumbrances, fraud, and negligent misrepresentation. Defendants moved, among other things,for dismissal of the complaint for failure to state a cause of action. Supreme Court granteddefendants' motion in part, dismissing plaintiffs' cause of action for breach of warranty butrefusing to dismiss the causes of action for fraud and negligent misrepresentation. Defendantsappeal from that part of the order that denied dismissal of these claims.
In considering a motion to dismiss pursuant to CPLR 3211 (a) (7), a court "must afford thepleadings a liberal construction, take the allegations of the complaint as true and provide [a]plaintiff the benefit of every possible inference" (EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005]; see Skibinsky v State Farm Fire & Cas.Co., 6 AD3d 975, 976 [2004]). Defendants contend that even under this liberalstandard, Supreme Court erred in refusing to dismiss the causes of action in fraud and negligentmisrepresentation.
"Fraud is established where a defendant knowingly misrepresents a material fact, someonejustifiably relies upon that misrepresentation and the plaintiff is thereby injured" (Roche v Claverack Coop. Ins. Co., 59AD3d 914, 918 [2009] [citations omitted]). As to negligent misrepresentation, plaintiffsmust establish that " 'defendant[s] had a duty, based upon some special relationship with them, toimpart correct information, that the information given was false or incorrect and that plaintiffsreasonably relied upon the information provided' " (Berger-Vespa v Rondack Bldg.Inspectors, 293 AD2d 838, 841 [2002], quoting Hausler v Spectra Realty, 188 AD2d722, 724 [1992]). Defendants maintain that plaintiffs cannot establish either claim because theycannot demonstrate justifiable reliance upon the alleged misrepresentations.
Justifiable reliance does not exist " '[w]here a party has the means to discover the true natureof the transaction by the exercise of ordinary intelligence, and fails to make use of those means' "(Tanzman v La Pietra, 8 AD3d706, 707 [2004], quoting Stuart Silver Assoc. v Baco Dev. Corp., 245 AD2d 96,98-99 [1997]; accord Lusins vCohen, 49 AD3d 1015, 1017 [2008]). However, a purchaser's failure to determine atransaction's true nature by inspecting public records is not fatal when "the facts were peculiarlywithin the knowledge of the defendant[ ] and were willfully misrepresented" (Cetnar vKinowski, 263 AD2d 842, 844 [1999], lv dismissed 94 NY2d 872 [2000] [internalquotation marks and citations omitted]). Defendants assert that Braden Road's public nature wasnot peculiarly within their knowledge, contending that the roadway was listed as a publichighway on the Town's 1963 Annual Road Inventory and on [*3]Saratoga County's Official 2000 Highway Map and that plaintiffscould have discovered its public nature. They note that the title report prepared by plaintiffs'attorney indicated that the property was "[s]ubject to right of others to use Braden Road whichcrosses the insured premises." However, even if the roadway's public nature was not peculiarlywithin defendants' knowledge, their unsuccessful petition to have it abandoned by the Town mayhave been, and plaintiffs allege that the failure to disclose this information in response to theirinquiries constituted willful misrepresentation. We agree that, viewed in the light most favorableto plaintiffs, the pleadings sufficiently state causes of action in fraud and negligentmisrepresentation.
Mercure, J.P., Rose, Kane and Kavanagh, JJ., concur. Ordered that the order is affirmed,with costs.