Heaven v. McGowan
Citation | 2007 NY Slip Op 03883,40 A.D.3d 583,835 N.Y.S.2d 641 |
Decision Date | 01 May 2007 |
Docket Number | 2005-10320.,2005-10319. |
Parties | LORNA HEAVEN et al., Appellants, v. EDWARD McGOWAN, JR., et al., Respondents. |
Court | New York Supreme Court — Appellate Division |
Ordered that one bill of costs is awarded to the plaintiffs.
The plaintiff Tomlinson Living Trust (hereinafter the Trust) was created in 1996 as an irrevocable inter vivos trust, and owned residential real property in Cambria Heights, Queens (hereinafter the property), with a market value as of 2000 in the sum of $200,000. The plaintiff Paula Heaven (hereinafter Paula) is both the trustee and a beneficiary of the Trust, and the plaintiff Lorna Heaven (hereinafter Lorna) is also a beneficiary of the Trust.
Facing foreclosure, the plaintiffs consulted with the defendant Edward M. McGowan, Jr., an attorney who represented the Trust. The plaintiffs alleged that, on the basis of McGowan's representations, they entered into an agreement with him which they believed accomplished a refinance of their mortgage on the property. The documents that the plaintiffs signed, however, actually effected a sale of the property to the defendant New World Investment Trust (hereinafter New World), an entity created and owned by McGowan, for the sum of $92,000 and a leaseback by the plaintiffs at a monthly rent greater than their mortgage payments had been. When the plaintiffs fell behind on their "rental payments" to McGowan and New World, McGowan unsuccessfully commenced a summary holdover proceeding against the plaintiffs in the Civil Court, Queens County. The plaintiffs then commenced this action to recover damages for fraud, among other things, alleging that they were induced to transfer the property to New World and McGowan as a result of McGowan's mischaracterization of the transaction as a refinance.
Fraud consists of "a representation of fact, which is either untrue and known to be untrue or recklessly made, and which is offered to deceive the other party and to induce them to act upon it, causing injury" (Jo Ann Homes at Bellmore v Dworetz, 25 NY2d 112, 119 [1969]; see Avecia, Inc. v Kerner, 299 AD2d 380 [2002]; Cohen v Houseconnect Realty Corp., 289 AD2d 277, 278 [2001]). Thus, in order to prevail on a cause of action alleging fraud, the plaintiffs must demonstrate that (1) the defendant made material representations that were false, (2) the defendant knew the representations were false and made them with the intent to deceive the plaintiff, (3) the plaintiff justifiably relied on the defendant's representations, and (4) the plaintiff was injured as a result of the defendant's representations (see Channel Master Corp. v Aluminium Ltd. Sales, 4 NY2d 403, 407 [1958]; Cohen v Houseconnect Realty Corp., supra; 113-14 Owners Corp. v Gertz, 123 AD2d 850, 851 [1986]).
The defendants met their initial burden of establishing their entitlement to summary judgment on the fraud claim by submitting documentary evidence in the form of the real estate contract of sale dated July 5, 1997, and the recorded deed executed and acknowledged by the plaintiffs on May 29, 1998, demonstrating the plaintiffs' knowledge that the transaction was an actual sale of the property (see Alvarez v Prospect Hosp., 68 NY2d 320, 326 [1986]). However, in opposition, the plaintiffs raised triable issues of fact, precluding the granting of summary judgment, on the basis of Lorna's affidavit, in which she asserted that McGowan "told us that he would help us refinance the mortgage" and that the "market value of our house is approximately $200,000."
The assertion that the arrangement between the parties...
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