Dube-Forman v. D'Agostino

• Decision Date: 23 April 2009
• Docket Number: 505826.
• Citation: 2009 NY Slip Op 03083,877 N.Y.S.2d 740,61 A.D.3d 1255
• Parties: LISA M. DUBE-FORMAN, Appellant, v. SHERYL S. D'AGOSTINO, Respondent.
• Court: New York Supreme Court — Appellate Division

61 A.D.3d 1255

877 N.Y.S.2d 740

2009 NY Slip Op 03083

LISA M. DUBE-FORMAN, Appellant, v. SHERYL S. D'AGOSTINO, Respondent.

505826.

Appellate Division of the Supreme Court of New York, Third Department.

Decided April 23, 2009.

Appeal from an order of the Supreme Court (Dawson, J.), entered September 5, 2008 in Essex County, which denied plaintiff's motion for, among other things, partial summary judgment.

MERCURE, J.P.

In January 2007, defendant, a resident of Massachusetts, entered into an exclusive buyer representation agreement with plaintiff, a real estate sales agent, for the purpose of purchasing a home in the area of the Village of Lake Placid, Essex County. In late April 2007, defendant viewed plaintiff's own residence and made a verbal purchase offer, which plaintiff accepted. Plaintiff then arranged for a structural inspection of the home on defendant's behalf; plaintiff attended the inspection but defendant did not. Thereafter, the parties entered into a written contract, which contained a specific disclaimer clause stating that defendant had examined the property, was familiar with its physical condition and agreed to accept it "AS IS." Along with the contract, defendant signed an agency disclosure form acknowledging that plaintiff was now acting as a seller's agent.

On the day of closing, defendant went to the property for a final inspection and, upon entering the basement, viewed mold and standing water in an area of the basement that had been obscured both when defendant first viewed the property and during the inspection. Immediately, defendant contacted her attorney, who came to the house and also viewed the mold infestation. The next day, defendant terminated the contract.

Plaintiff then commenced the instant action, alleging breach of contract and seeking specific performance or, in the alternative, damages. Defendant answered, asserting several affirmative defenses, including fraud and breach of fiduciary duty, and various counterclaims. Plaintiff moved for summary judgment on the matter of defendant's liability, seeking specific performance and the dismissal of defendant's counterclaims, which Supreme Court denied. Plaintiff appeals, and we now affirm.

Initially, we note that plaintiff demonstrated prima facie entitlement to summary judgment, establishing that she was ready, willing and able to perform her obligations under the parties' signed contract, which defendant unilaterally terminated (see Alba v Kaufmann, 27 AD3d 816, 818 [2006]; Rebh v Lake George Ventures, 218 AD2d 829, 830-831 [1995]; Marine Midland Bank v Cafferty, 174 AD2d 932, 934 [1991]). We agree with Supreme Court, however, that defendant has raised questions of fact on her claims of fraud and breach of fiduciary duty.

To establish fraud, defendant must demonstrate that plaintiff knowingly misrepresented a material fact for the purpose of inducing reliance upon it, that there was, in fact, justifiable reliance thereon, and that damages resulted (see State of New York v Industrial Site Servs., Inc., 52 AD3d 1153, 1157 [2008]; Tanzman v La Pietra, 8 AD3d 706, 707 [2004]). Here, defendant asserts that plaintiff had knowledge of mold in the basement, and that she committed fraud and breached a continuing fiduciary duty to defendant by concealing the mold during the inspection and making oral misrepresentations during the inspection that defendant relied upon, i.e., that a previously existing moisture problem had been alleviated. In response, plaintiff contends that the specific disclaimer clause in the real property contract served as a bar to admitting parol evidence of any such oral misrepresentations and, as such, is sufficient to defeat defendant's claims (see Danann Realty Corp. v Harris, 5 NY2d 317, 320-323 [1959]; Janian v Barnes, 294 AD2d 787, 788 [2002]; Cetnar v Kinowski, 263 AD2d 842, 843 [1999], lv dismissed 94 NY2d 872 [2000]). Plaintiff argues further that it was incumbent upon defendant to make use of available means, such as the home inspection, to ascertain the true physical condition of the property (see Janian v Barnes, 294 AD2d at 788; Cetnar v Kinowski, 263 AD2d at 844; Long v Fitzgerald, 240 AD2d 971, 973-974 [1997]).

Contrary to plaintiff's arguments, however, a specific disclaimer clause cannot serve to defeat a claim of fraud if the seller owes the buyer a fiduciary duty but nonetheless breaches that duty by failing to "disclose any information that could reasonably bear on [the buyer's] consideration of [the transaction]" (Dubbs v Stribling & Assoc., 96 NY2d 337, 341 [2001]; see Salm v Feldstein, 20 AD3d 469, 470 [2005]; Blue Chip Emerald v Allied Partners, 299 AD2d 278, 279-280 [2002]; see also Littman v Magee, 54 AD3d 14, 17 [2008]; cf. Rector v Calamus Group, Inc., 17 AD3d 960, 961 [2005]; Slavin v Hamm, 210 AD2d 831, 832 [1994]). Under such circumstances, the contract of sale itself — including the specific disclaimer clause — would be voidable because "a fiduciary cannot by contract relieve itself of the fiduciary obligation of full disclosure by withholding the very information the beneficiary needs in order to make a reasoned judgment whether to agree to the proposed contract" (Blue Chip Emerald v Allied Partners, 299 AD2d at 280).

Here, the parties signed the exclusive agency agreement — pursuant to which plaintiff was acting as defendant's buyer agent — in January 2007. At the earliest, this relationship was dissolved upon the signing of the agency disclosure on May 9 2007. Therefore, up until that date, plaintiff owed defendant a fiduciary duty (see Dubbs v Stribling &...