Vermeer Owners, Inc. v. Guterman

Citation78 N.Y.2d 1114,585 N.E.2d 377,578 N.Y.S.2d 128
Parties, 585 N.E.2d 377 VERMEER OWNERS, INC., et al., Appellants, v. Gerald GUTERMAN et al., Respondents, et al., Defendants, and Fleur Garage Corp., Respondent. (And Another Proceeding.)
Decision Date26 November 1991
CourtNew York Court of Appeals
OPINION OF THE COURT MEMORANDUM.

The order of the Appellate Division, 169 A.D.2d 442, 564 N.Y.S.2d 335, should be affirmed, with costs.

We agree with the courts below that plaintiffs may not maintain a private cause of action under the Martin Act (CPC Intl. v. McKesson Corp., 70 N.Y.2d 268, 276-277, 519 N.Y.S.2d 804, 514 N.E.2d 116). Plaintiffs contend that CPC is not controlling because that case involved the violation of General Business Law § 352-c, which addresses a variety of fraudulent acts and practices in the sale and exchange of securities and other properties, whereas the present claim is based upon a violation of section 352-e, which specifically addresses real estate syndication offerings. The difference, however, is not legally significant because our decision in CPC rested on a determination that "an implied private [cause of] action is not consistent with the legislative scheme underlying the Martin Act" (id., at 276-277, 519 N.Y.S.2d 804, 514 N.E.2d 116). That conclusion also forecloses a private cause of action under section 352-e.

We also agree with the holding of the courts below that these plaintiffs have no basis for invalidating the lease on the ground of unconscionability or breach of fiduciary duty (see generally, Sablosky v. Gordon Co., 73 N.Y.2d 133, 138, 538 N.Y.S.2d 513, 535 N.E.2d 643; Gillman v. Chase Manhattan Bank, 73 N.Y.2d 1, 10-11, 537 N.Y.S.2d 787, 534 N.E.2d 824).

With respect to plaintiffs' fraud claim, we recognize that sponsors of apartment house conversions have a duty to meet high standards of fair dealing and good faith toward tenants (People v. Lexington Sixty-First Assocs., 38 N.Y.2d 588, 595, 381 N.Y.S.2d 836, 345 N.E.2d 307; see, Gilligan v. Tishman Realty & Constr. Co., 283 App.Div. 157, 162, 126 N.Y.S.2d 813, affd. 306 N.Y. 974, 120 N.E.2d 230; Lizby Assocs. v. Baron, 130 Misc.2d 834, 835, 497 N.Y.S.2d 808) and that in many instances purchasing tenants and sponsors do not deal as equals either in terms of access to information or business acumen and thus,...

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  • In re Pfizer Inc. Securities Litigation, 04 Civ. 9866(LTS)(DCF).
    • United States
    • United States District Courts. 2nd Circuit. United States District Courts. 2nd Circuit. Southern District of New York
    • July 1, 2008
    ...theory and continues to require that fraud claims allege reliance and be stated in detail, Vermeer Owners, Inc. v. Guterman, 78 N.Y.2d 1114, 1116, 578 N.Y.S.2d 128, 585 N.E.2d 377, 378-79 (1991), the Court concludes that the fraud-on-the-market theory is unavailable to Lead Plaintiff TRSL a......
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    ...Small v. Lorillard Tobacco Co., 94 N.Y.2d 43, 57, 698 N.Y.S.2d 615, 720 N.E.2d 892 (1999) (citing Vermeer Owners Inc. v. Guterman, 78 N.Y.2d 1114, 1116, 578 N.Y.S.2d 128, 585 N.E.2d 377 (1991)) ("[t]he essential elements of a fraud claim under New York law include `(1) representation of mat......
  • Rusyniak v. Gensini, 5:07-CV-0279 (GTS/RFT).
    • United States
    • United States District Courts. 2nd Circuit. United States District Court of Northern District of New York
    • May 5, 2009
    ...of fraud are "a representation of material fact, falsity, scienter, reliance and injury." Vermeer Owners, Inc. v. Guterman, 78 N.Y.2d 1114, 1116, 578 N.Y.S.2d 128, 585 N.E.2d 377 (N.Y.1991). "The plaintiff must demonstrate each of the fraud elements `by clear and convincing evidence.'" Bras......
  • Rhodes v. CONSUMERS'BUYLINE, INC., Civ. A. No. 92-10877-K.
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    • United States District Courts. 1st Circuit. United States District Courts. 1st Circuit. District of Massachusetts
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    ...that it would not recognize an implied private cause of action under any provision of that act. In Vermeer Owners, Inc. v. Guterman, 78 N.Y.2d 1114, 585 N.E.2d 377, 578 N.Y.S.2d 128 (1991), the Court of Appeals extended its holding in CPC Int'l to § 352-e, another provision of the Martin Ac......
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