| Caboara v Babylon Cove Dev., LLC |
| 2011 NY Slip Op 02615 [82 AD3d 1141] |
| March 29, 2011 |
| Appellate Division, Second Department |
| Thomas Caboara et al., Appellants, v Babylon CoveDevelopment, LLC, et al., Respondents. |
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In an action, inter alia, to recover damages for common-law fraud and breach of contract, theplaintiffs appeal from an order of the Supreme Court, Suffolk County (Molia, J.), entered January8, 2010, which granted the motion of the defendant Certilman, Balin, Adler & Hyman, LLP, andthe separate motion of the defendants Babylon Cove Development, LLC, Michael J. Posillico,Joseph K. Posillico, Paul F. Posillico, and Joseph D. Posillico III for summary judgmentdismissing the complaint insofar as asserted against each of them.
Ordered that the order is reversed, on the law, with one bill of costs payable by thedefendants appearing separately and filing separate briefs, and the defendants' separate motionsfor summary judgment dismissing the complaint insofar as asserted against them are denied.
On a prior appeal (see Caboara v Babylon Cove Dev., LLC, 54 AD3d 79, 80, 82-83[2008]), we held that the causes of action asserted by the plaintiffs to recover damages forcommon-law fraud and breach of contract based on affirmative misrepresentations in an offeringplan, incorporated by reference into contracts of sale of condominium units, were not preemptedby the Martin Act (General Business Law art 23-A). The Court of Appeals' holding in KerusaCo. LLC v W10Z/515 Real Estate Ltd. Partnership (12 NY3d 236 [2009]), contrary to thedefendants' contention, did not overrule this Court's prior holding in Caboara. InKerusa, the Court of Appeals held that "a purchaser of a condominium apartment maynot bring a claim for common-law fraud against the building's sponsor when the fraud ispredicated solely on alleged material omissions from the offering plan amendments mandated bythe Martin Act" (id. at 239). The Court expressly declined to decide "whether the allegedmisrepresentation of an item of information that the Martin Act or the Attorney General'simplementing regulations require[d] to be disclosed would support a cause of action for fraud, solong as the elements of common-law fraud are pleaded" (id. at 247 n 5), as the plaintiff'scause of [*2]action alleging fraud in Kerusa rested"entirely on alleged omissions from filings required by the Martin Act and the Attorney General'simplementing regulations" (id. at 247). Further, contrary to the defendants' contention,this Court's holding in Hamlet on Olde Oyster Bay Home Owners Assn., Inc. v Holiday Org.,Inc. (65 AD3d 1284 [2009]), did not extend Kerusa to preclude causes of actionbased on affirmative misrepresentations on the ground that they are preempted by the Martin Act,as Hamlet involved budget projections for new businesses, which are predictions oropinions, not statements of fact (see 60A NY Jur 2d, Fraud and Deceit § 85; cf.CPC Intl. v McKesson Corp., 70 NY2d 268, 286 [1987]). Therefore, since the defendantsfailed to establish that the plaintiffs' claim rests "entirely on alleged omissions from filingsrequired by the Martin Act and the Attorney General's implementing regulations"(Kerusa, 12 NY3d at 247), they were not entitled to judgment as a matter of lawdismissing the complaint insofar as asserted against them (id. at 239; see Board ofMgrs. of Marke Gardens Condominium v 240/242 Franklin Ave., LLC, 71 AD3d 935, 936[2010]; see generally Zuckerman v City of New York, 49 NY2d 557, 562 [1980]).Mastro, J.P., Chambers, Lott and Cohen, JJ., concur.