| Yenrab, Inc. v 794 Linden Realty, LLC |
| 2009 NY Slip Op 09020 [68 AD3d 755] |
| December 1, 2009 |
| Appellate Division, Second Department |
| Yenrab, Inc., Doing Business as Party Fever,Respondent, v 794 Linden Realty, LLC, et al., Appellants. |
—[*1] Morici & Morici, LLP, Garden City, N.Y. (C. William Gaylor III of counsel), forrespondent.
In an action, inter alia, to recover damages for breach of contract, the defendants appeal, aslimited by their brief, from so much of an order of the Supreme Court, Kings County (Balter, J.),dated September 10, 2008, as denied those branches of their motion which were pursuant toCPLR 3211 (a) (1) and (7) to dismiss the complaint insofar as asserted against the defendantElizabeth Briguglio, and the first, second, third, and fourth causes of action insofar as assertedagainst the defendant 794 Linden Realty, LLC, and denied that branch of their motion which wasto strike the plaintiff's demand for $805,940.69 in noncompensatory damages.
Ordered that the order is modified, on the law, by (1) deleting the provision thereof denyingthose branches of the defendants' motion which were pursuant to CPLR 3211 (a) (1) and (7) todismiss the complaint insofar as asserted against the defendant Elizabeth Briguglio, andsubstituting therefor a provision granting those branches of the motion, (2) by deleting theprovisions thereof denying those branches of the motion which were pursuant to CPLR 3211 (a)(1) and (7) to dismiss the first, third, and fourth causes of action insofar as asserted against thedefendant 794 Linden Realty, LLC, and substituting therefor a provision granting those branchesof the motion, and (3) by deleting the provision thereof denying that branch of the motion whichwas to strike the plaintiff's demand for $805,940.69 in noncompensatory damages, andsubstituting therefor a provision granting that branch of the motion; as so modified, the order isaffirmed insofar as appealed from, without costs or disbursements.
On May 17, 2006 the plaintiff, a party supply company, entered into a lease to rent certaincommercial premises from the defendant 794 Linden Realty, LLC (hereinafter Linden). Thedefendant Elizabeth Briguglio was a member and agent of Linden. The plaintiff alleged that,prior to the execution of the lease, Briguglio made numerous misrepresentations that certainrepairs would be performed in the premises, including repairs of water leaks through thecommon walls, ceiling, roof, and in the basement, which induced the plaintiff to sign the lease.These repairs were never performed. The plaintiff further alleged that, during the course of itstenancy, the defendants repeatedly promised to make repairs in the premises, including repairs ofwater leaks, and repeatedly failed to perform those repairs.[*2]
On or about December 4, 2007 the plaintiff commencedthis action. The first, fourth, and fifth causes of action sought to recover damages against bothdefendants for fraud, fraudulent inducement and gross negligence, and negligence, respectively.The second and third causes of action sought to recover damages only against Linden for breachof contract, and unjust enrichment, respectively. The plaintiff demanded $1,000,000 in damages,which included $194,059.31 in property damages, and $805,940.69 in noncompensatorydamages for lost profits and business losses.
Contrary to the defendants' contention, the Supreme Court properly denied that branch of thedefendants' motion which was pursuant to CPLR 3211 (a) (1) to dismiss the second cause ofaction to recover damages against Linden only for breach of contract. " 'To succeed on a motionto dismiss pursuant to CPLR 3211 (a) (1), the documentary evidence that forms the basis of thedefense must be such that it resolves all factual issues as a matter of law, and conclusivelydisposes of the plaintiff's claim' " (Trade Source v Westchester Wood Works, 290 AD2d437, 438 [2002], quoting Teitler v Pollack & Sons, 288 AD2d 302 [2001]). Here, thedocumentary evidence put forth, including the lease between the parties, did not conclusivelydispose of the plaintiff's breach of contract claims against Linden. Specifically, the lease atparagraph 82 required Linden to repair water leakages due to common broken pipes, andparagraph 49 (g) required it to perform all structural repairs, defined as repairs to the roof,exterior walls, and foundation. In the complaint, the plaintiff alleged that water leaked fromholes in the ceiling as well as through the walls from the adjacent premises, and pipes in thebasement. Further, there is no merit to the defendants' contention that the provisions in the leasewhich stated that the plaintiff took the premises "as is" conclusively disposed of its claims,because the plaintiff's complaint alleged that Linden failed to perform repairs for conditions thatarose during the tenancy.
Moreover, the Supreme Court properly denied that branch of the defendants' motion whichwas pursuant to CPLR 3211 (a) (7) to dismiss the second cause of action for breach of contract. "'On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberalconstruction' " (Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder &Steiner, 96 NY2d 300, 303 [2001], quoting Leon v Martinez, 84 NY2d 83, 87[1994]). Here, construing the complaint in the light most favorable to the plaintiff and acceptingall allegations as true (see PacificCarlton Dev. Corp. v 752 Pac., LLC, 62 AD3d 677, 679 [2009]; Heffez v L & G Gen. Constr., Inc., 56AD3d 526 [2008]), the complaint stated a cause of action alleging breach of contract againstLinden.
"[A] cause of action premised upon fraud cannot lie where it is based on the same allegationsas the breach of contract claim" (Heffez v L & G Gen. Constr., Inc., 56 AD3d at 527).Where "a claim to recover damages for fraud is premised upon an alleged breach of contractualduties and the supporting allegations do not concern representations which are collateral orextraneous to the terms of the parties' agreement, a cause of action sounding in fraud does notlie" (McKernin v Fanny Farmer Candy Shops, 176 AD2d 233, 234 [1991]; Krantz vChateau Stores of Canada, 256 AD2d 186, 187 [1998]). Moreover, "[a]lthough an agent fora disclosed principal may be held liable to a third party where the agent has committed fraud. . . a cause of action to recover damages for fraud will not arise when the onlyfraud charged relates to a breach of contract" (Mastropieri v Solmar Constr. Co., 159AD2d 698, 700 [1990]). Additionally, although "a misrepresentation of material fact, which iscollateral to the contract and serves as an inducement for the contract, is sufficient to sustain acause of action alleging fraud" (WIT Holding Corp. v Klein, 282 AD2d 527, 528[2001]), "a mere misrepresentation of an intention to perform under the contract is insufficient toallege fraud" (id). Here, the allegations upon which the causes of action sounding infraud and fraudulent inducement are based are the same as those underlying the cause of actionfor breach of contract. Further, the allegations that Briguglio fraudulently represented that thedefendants would make repairs to the premises amount to nothing more than allegations of amisrepresentation of an intention to perform under the contract (see WIT Holding Corp. vKlein, 282 AD2d at 528-529). Accordingly, the Supreme Court should have granted thosebranches of the defendants' motion which were pursuant to CPLR 3211 (a) (7) to dismiss the firstcause of action sounding in fraud, and so much of the fourth cause of action as sounded infraudulent misrepresentation (see e.g. Heffez v L & G Gen. Constr., Inc., 56 AD3d at527; Mastropieri v Solmar Constr. Co., 159 AD2d at 700).
Further, the Supreme Court should also have granted that branch of the defendants' motionwhich was pursuant to CPLR 3211 (a) (7) to dismiss so much of the fourth cause of action asalleged gross [*3]negligence, as it was also premised on the sameallegations as those underlying the breach of contract cause of action (see Clark-Fitzpatrick,Inc. v Long Is. R.R. Co., 70 NY2d 382, 389-390 [1987]).
Additionally, the Supreme Court should also have granted that branch of the defendant'smotion which was pursuant to CPLR 3211 (a) (7) to dismiss the fifth cause of action allegingnegligence, insofar as it was asserted against Briguglio (see Clark-Fitzpatrick, Inc. v Long Is.R.R. Co., 70 NY2d at 389-390; Heffez v L & G Gen. Constr., Inc., 56 AD3d 526 [2008]).
The Supreme Court also should have granted that branch of the defendants' motion whichwas pursuant to CPLR 3211 (a) (1) to dismiss the third cause of action to recover damagesagainst Linden only for unjust enrichment. "As a general rule, the existence of a valid andenforceable written contract governing a particular subject matter precludes recovery inquasi-contract on theories of quantum meruit and unjust enrichment for events arising out of thesame subject matter" (Marc Contr., Inc.v 39 Winfield Assoc., LLC, 63 AD3d 693, 695 [2009]; see Clark-Fitzpatrick, Inc. vLong Is. R.R. Co., 70 NY2d at 388; Goldman v Metropolitan Life Ins. Co., 5 NY3d 561, 572 [2005];AHA Sales, Inc. v Creative Bath Prods.,Inc., 58 AD3d 6, 19-20 [2008]; R.I. Is. House, LLC v North Town Phase II Houses, Inc., 51 AD3d890, 896 [2008]). Here, the existence of a valid and enforceable contract, the lease betweenthe parties, precluded the plaintiff's claim alleging unjust enrichment.
In actions to recover damages for breach of contract, "the nonbreaching party may recovergeneral damages which are the natural and probable consequence of the breach" (KenfordCo. v County of Erie, 73 NY2d 312, 319 [1989]; see Atkins Nutritionals v Ernst &Young, 301 AD2d 547 [2003]). In order to recover "special" or extraordinary damages thatdo not flow directly from the breach, a plaintiff is required to plead that the damages wereforeseeable and within "the contemplation of the parties at the time the contract was made"(American List Corp. v U.S. News & World Report, 75 NY2d 38, 43 [1989]; seeKenford Co. v County of Erie, 73 NY2d at 319). A claim for lost profits is generally a claimfor special or extraordinary damages (see Lee Mfg. v Chemical Bank, 186 AD2d 548,551 [1992]). Here, the plaintiff claimed damages in an amount of $805,940.69 for "lost profitsand income, the shuttering of its doors and cessation of business operations." However, it failedto plead that damages for business losses and cessation were within the contemplation of theparties at the time the contract was made (see American List Corp. v U.S. News & WorldReport, 75 NY2d at 43). Therefore, insofar as the plaintiff demanded noncompensatorydamages in the amount of $805,940.69, the Supreme Court should have stricken that demand(see Lee Mfg. v Chemical Bank, 186 AD2d at 551-552). Mastro, J.P., Miller, Angiolilloand Austin, JJ., concur.