| Miller v Icon Group LLC |
| 2010 NY Slip Op 07678 [77 AD3d 586] |
| October 28, 2010 |
| Appellate Division, First Department |
| Harvey S. Shipley Miller, as Trustee of the Trust Known as JudithRothschild Foundation, Respondent, v Icon Group LLC,Appellant. |
—[*1] Penn Proefriedt Schwarzfeld & Schwartz, New York (Neal Schwarzfeld of counsel), forrespondent.
Judgment, Supreme Court, New York County (Milton A. Tingling, J.), entered June 4, 2009,awarding plaintiff the principal sum of $1,700,000, unanimously affirmed, with costs. Appeal fromorder, same court and Justice, entered April 20, 2009, which granted plaintiff's motion for summaryjudgment, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.
Defendant, a real property management company, alleges it was fraudulently induced to enter into a$17 million contract to purchase a brownstone owned by a foundation by its trustee's falserepresentations that the adjacent property was also available for sale to defendant by its owner forabout $10 million. Defendant further avers that the trustee represented he would make arrangementswith the neighboring owner and that defendant should not contact him until the transaction with thefoundation had closed. Plaintiff submitted no evidence disputing those allegations. After defendantsigned the contract, its principals met with the owner of the adjacent property, who said he had nointention of selling at any price. Defendant then notified plaintiff that it would not consummate thetransaction.
The contract between the parties was not conditioned on defendant's ability to acquire the adjacentproperty; however, defendant agreed to make reasonable commercial efforts to acquire the adjacentproperty, and to pay plaintiff additional compensation of $500,000 if this could be accomplished withina year after closing.
In entering into the contract, defendant represented that it had undertaken all necessary examinationof the property in question, as well as "all other matters affecting or relating to this transaction," and thatit was not relying on any oral or written representations by the seller, its broker, or any representativesother than those set forth in the contract. Even though the general merger and disclaimer clauses do notpreclude parol evidence of fraud in the inducement (see Merrill Lynch, Pierce, Fenner & Smith, Inc. v Wise Metals Group, LLC,19 AD3d 273, 275 [2005]; DiFilippo v Hidden Ponds Assoc., 146 AD2d 737[*2][1989]), the fraudulent inducement defense was properly rejected.Defendant, a sophisticated real estate entity represented by counsel, could not establish justifiablereliance since it did not undertake due diligence concerning a matter it regarded as essential to thetransaction and was not peculiarly within its knowledge (see Goldman v Strough Real Estate, 2 AD3d 677, 678 [2003];Valassis Communications v Weimer, 304 AD2d 448 [2003], appeal dismissed 2NY3d 794 [2004]; Parker E. 67th Assoc. v Minister, Elders & Deacons of Refm. Prot. DutchChurch of City of N.Y., 301 AD2d 453 [2003], lv denied 100 NY2d 502 [2003])."Where a party has the means to discover the true nature of the transaction by the exercise of ordinaryintelligence, and fails to make use of those means, he cannot claim justifiable reliance on [the otherparty's] misrepresentations" (Stuart Silver Assoc. v Baco Dev. Corp., 245 AD2d 96, 98-99[1997]).
The motion court properly denied defendant's request for further discovery prior to determinationof the motion (CPLR 3212 [f]), since defendant did not identify facts essential to justify opposition tothe motion that would have been exclusively within plaintiff's knowledge and control (Global Mins. & Metals Corp. v Holme, 35AD3d 93, 102-103 [2006], lv denied 8 NY3d 804 [2007]). Concur—Tom, J.P.,Catterson, Renwick and Manzanet-Daniels, JJ. [Prior Case History: 2009 NY Slip Op30892(U).]