Bhandari v Ismael Leyva Architects, P.C.

2011 NY Slip Op 04166 [84 AD3d 607]

May 19, 2011

Appellate Division, First Department

As corrected through Wednesday, July 6, 2011

Heather Darcy Bhandari et al., Appellants, v Ismael LeyvaArchitects, P.C., Respondent.

—[*1]Mandel Bhandari LLP, New York (Evan Mandel of counsel), for appellants.

Gogick, Byrne & O'Neill LLP, New York (Stephen P. Schreckinger of counsel), forrespondent.

Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered September 1,2010, which granted defendant's motion to dismiss the complaint, unanimously modified, on thelaw, to deny the motion as to the causes of action for common-law fraud, and otherwise affirmed,without costs.

Plaintiffs' claims are not preempted by the Martin Act (General Business Law art 23-A)since, with respect to each cause of action in the complaint, plaintiffs allege not that defendantomitted to disclose information required under the Martin Act but that it affirmativelymisrepresented, as part of the offering plan, a material fact about the condominium, i.e., the floordimensions of certain units, including the one they purchased (see Assured Guar. [UK] Ltd. v J.P. MorganInv. Mgt. Inc., 80 AD3d 293, 301 [2010]).

The complaint states a cause of action for common-law fraud by alleging that defendantknowingly made a material misrepresentation, purposefully inducing plaintiffs to rely on it, andthat plaintiffs, among other things, purchased and prepared to move into the unit (see Peach Parking Corp. v 346 W. 40th St.,LLC, 42 AD3d 82, 86 [2007]).

However, the complaint fails to state a cause of action for negligent misrepresentationbecause plaintiffs do not allege that defendant knew they were prospective buyers who wouldlikely rely on its misrepresentations, or indeed that defendant knew of their existence (see Sykes v RFD Third Ave. 1 Assoc.,LLC, 15 NY3d 370, 372-373 [2010]). Furthermore, the complaint fails to state causes ofaction under General Business Law §§ 349 and 350 since there are insufficientallegations of a broad impact on consumers at large. Concur—Andrias, J.P., Friedman,Freedman, Richter and Rom�n, JJ.