Miller v. Icon Group LLC

• Decision Date: 28 October 2010
• Citation: Miller v. Icon Group LLC, 911 N.Y.S.2d 3, 77 A.D.3d 586 (N.Y. App. Div. 2010)
• Parties: Harvey S. Shipley MILLER, as Trustee of the Trust known as Judith Rothschild Foundation, Plaintiff-Respondent, v. The ICON GROUP LLC, Defendant-Appellant.
• Court: New York Supreme Court — Appellate Division

911 N.Y.S.2d 3

77 A.D.3d 586

Harvey S. Shipley MILLER, as Trustee of the Trust known as Judith Rothschild Foundation, Plaintiff-Respondent,

v.The ICON GROUP LLC, Defendant-Appellant.

Supreme Court, Appellate Division, First Department, New York.

Oct. 28, 2010.

Goldberg & Rimberg PLLC, New York (Yehuda C. Greenfield of counsel), for appellant.

Penn Proefriedt Schwarzfeld & Schwartz, New York (Neal Schwarzfeld of counsel), for respondent.

TOM, J.P., CATTERSON, RENWICK, MANZANET-DANIELS, JJ.

Judgment, Supreme Court, New York County (Milton A. Tingling, J.), entered June 4, 2009, awarding plaintiff the principal sum of $1,700,000, unanimously affirmed, with costs.Appeal from order, same court and Justice, entered April 20, 2009, which granted plaintiff's motion for summary judgment, unanimously dismissed, without costs, as subsumed in the appeal from the judgment.

Defendant, a real property management company, alleges it was fraudulently induced to enter into a $17 million contract to purchase a brownstone owned by a foundation by its trustee's false representations that the adjacent property was also available for sale to defendant by its owner for about $10 million. Defendant further avers that the trustee represented he would make arrangements with the neighboring owner and that defendant should not contact him until the transaction with the foundation had closed. Plaintiff submitted no evidence disputing those allegations. After defendant signed the contract, its principals met with the owner of the adjacent property, who said he had no intention of selling at any price. Defendant then notified plaintiff that it would not consummate the transaction.

The contract between the parties was not conditioned on defendant's ability to acquire the adjacent property; however, defendant agreed to make reasonable commercial efforts to acquire the adjacent property, and to pay plaintiff additional compensation of $500,000 if this could be accomplished within a year after closing.

In entering into the contract, defendant represented that it had undertaken all necessary examination of the property in question, as well as "all other matters affecting or relating to this transaction," and that it was not relying on any oral or written representations by the seller, its broker, or any representatives other than those set forth in the contract. Even though the general merger and disclaimer clauses do not preclude parol evidence of fraud in the inducement ( see Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Wise Metals Group, 19 A.D.3d 273, 275, 798 N.Y.S.2d 14 [2005]; DiFilippo v. Hidden Ponds Assoc., 146 A.D.2d 737, 537 N.Y.S.2d 222 [1989] ), the fraudulent inducement defense was properly rejected. Defendant, a sophisticated real estate entity represented by counsel, could not establish justifiable reliance since it did not undertake due diligence concerning a...