| M & R Ginsburg, LLC v Orange Canyon Dev. Co., LLC |
| 2010 NY Slip Op 00435 [69 AD3d 1181] |
| January 21, 2010 |
| Appellate Division, Third Department |
| M & R Ginsburg, LLC, Appellant, v Orange CanyonDevelopment Company, LLC, et al., Respondents. |
—[*1] Kelley Drye & Warren, L.L.P., New York City (Mark S. Gregory of counsel), for OrangeCanyon Development Company, LLC and others, respondents. Napierski, Vandenburgh & Napierski, L.L.P., Albany (Thomas J. O'Connor of counsel), forVanguard-Fine Retail Store Leasing, LLC and another, respondents. Newell & Klingebiel, Glens Falls (David C. Klingebiel of counsel), for McDevitt RealEstate Partners, LLC and another, respondents.
Rose, J. Appeal from an order of the Supreme Court (Ferradino, J.), entered April 6, 2009 inSaratoga County, which, among other things, granted a motion by defendants Orange CanyonDevelopment Company, LLC, Point Five Development Glens Falls, LLC and Point FiveDevelopment, LLC for summary judgment dismissing the complaint against them.
Plaintiff is the owner of a 1.45-acre parcel that it sought to sell for commercial development.The parcel is located across the street from property that plaintiff's principals had previouslyleased to a Rite Aid pharmacy, and the lease with Rite Aid includes a restrictive covenant inwhich the lessors agreed not to lease to or "permit" another pharmacy within one mile of RiteAid's premises. Despite the principals' knowledge that this covenant had frustrated priornegotiations for the sale of its parcel to a party who planned to develop a pharmacy, plaintiffexecuted a contract to sell the parcel to defendant Orange Canyon Development Company, LLCwithout a pharmacy restriction. Plaintiff did, however, add a fast-food hamburger restaurantrestriction to preclude development of the parcel for a use that would compete with another of itstenants. When plaintiff later learned that defendants Point Five Development, LLC and PointFive Development Glens Falls, LLC and Orange Canyon (hereinafter collectively referred to asthe developers) intended to develop the property as a Walgreens pharmacy and had hidden theirassociation with the party whose prior negotiations had failed, it attempted to cancel the contractand refused to close because the intended use allegedly would violate the lease with Rite Aid.
Plaintiff then commenced this action alleging fraud against the developers, breach ofcontract against plaintiff's real estate broker, defendants McDevitt Real Estate Partners, LLC andPeter V. McDevitt (hereinafter collectively referred to as the McDevitt defendants), and tortiousinterference with contract against the developers' real estate broker, defendants Vanguard-FineRetail Store Leasing, LLC and Gordon T. Heeps (hereinafter collectively referred to as theVanguard defendants). After asserting counterclaims, the developers moved for summaryjudgment dismissing the complaint and granting them specific performance. Plaintiffcross-moved for partial summary judgment rescinding the real estate contract and dismissing thecounterclaims. The McDevitt and Vanguard defendants also moved for summary judgmentdismissing the complaint against them. Supreme Court denied plaintiff's cross motion andgranted defendants' motions for summary dismissal. Plaintiff appeals, and we now affirm.
In essence, plaintiff contends that it is entitled to rescission and the developers cannot obtainspecific performance because they had been aware of the pharmacy restriction due to the priornegotiations, yet fraudulently misrepresented and intentionally concealed the intended use of theparcel. The record, however, contains no evidence that the developers ever falsely stated how theparcel would be developed or in any other way induced plaintiff to believe that no restriction wasneeded in the sale contract to avoid breaching the lease with Rite Aid. The relevantrepresentations are a statement made by the developers' broker to plaintiff's broker that thedevelopers were working with different retailers and did not have a specific use in mind, and ane-mail message in which the developers' counsel said that the developers were about to "pitch"the parcel and other sites to prospective tenants. These vague and noncommittal statements couldhave led plaintiff to believe that a tenant had not yet been found, but not to conclude that nopharmacy would be developed and, therefore, no further use restriction was necessary. Inaddition, the claim of reliance upon the developers' conduct is contradicted by the depositiontestimony of plaintiff's principal and its attorney in which they acknowledge that a pharmacyrestriction was omitted because they had overlooked it.
Thus, plaintiff failed to establish the crucial element of justifiable reliance for its fraud andrescission claims (see Lusins vCohen, 49 AD3d 1015, 1017-1018 [2008]; Van Kleeck v Hammond, 25 AD3d 941, 943 [2006]; Fellion v Darling, 14 AD3d 904,907-908 [2005]; Curran, Cooney, Penney v Young & Koomans, 183 AD2d 742, 743[1992], lv denied 80 NY2d 757 [1992]). Put another way, plaintiff has not shown that thepharmacy use restriction was omitted due to its reliance on the developers' misrepresentations asopposed to its own forgetfulness (see Murphy v Kuhn, 90 NY2d 266, 271 [1997]).Accordingly, Supreme Court properly denied plaintiff's cross motion for rescission and grantedthe developers' motion for specific performance.
In light of this determination, we find plaintiff's remaining contentions, to the extent thatthey are preserved for our review, to be academic.
Cardona, P.J., Malone Jr., Stein and Garry, JJ., concur. Ordered that the order is affirmed,with one bill of costs.