Striker v. Graham Pest Control Co. Inc.

• Decision Date: 30 January 1992
• Citation: 578 N.Y.S.2d 719,179 A.D.2d 984
• Parties: James E. STRIKER et al., Respondents, v. GRAHAM PEST CONTROL COMPANY INC., Defendant, and Veronica Lynch Inc., Appellant.
• Court: New York Supreme Court — Appellate Division

Page 719

578 N.Y.S.2d 719

179 A.D.2d 984

James E. STRIKER et al., Respondents, v. GRAHAM PEST CONTROL COMPANY INC., Defendant and Veronica Lynch Inc., Appellant.

Supreme Court, Appellate Division Third Department.

Jan. 30, 1992.

Tobin and Dempf (R. Christopher Dempf, of counsel), Albany, for appellant.

Richard M. Meyers, Albany, for respondents.

Before LEVINE, MERCURE, CREW, MAHONEY and CASEY, JJ.

CASEY, Justice.

Appeal from an order of the Supreme Court (Harris, J.), entered November 13, 1990 in Albany County, which, inter alia, denied defendant Veronica Lynch Inc.'s motion for summary judgment dismissing the complaint against it.

Shortly after plaintiffs purchased a home in the Town of Colonie, Albany County, they discovered that parts of the structure were infested with carpenter ants. They commenced this action against defendant Graham Pest Control Company, Inc., the company that inspected the house prior to closing, and defendant Veronica Lynch, Inc., the listing broker who arranged for the inspection to satisfy a contingency clause in plaintiffs' contract with the sellers. This appeal concerns only the liability of Lynch, whose motion for summary judgment was denied by Supreme Court.

The complaint alleges causes of action against Lynch which sound in fraud, negligent misrepresentation and breach of a fiduciary relationship. Lynch asserts that it made no misrepresentation of a material fact that plaintiffs relied upon and that, because it was the sellers' agent, it had no fiduciary relationship with plaintiffs. We agree with Lynch that plaintiffs failed to come forward with evidence of an affirmative misrepresentation of a material fact, but we conclude that questions of fact exist which preclude summary judgment.

An examination of the record establishes that Lynch's representations concerning the pest inspection consisted of assurances that the house had "passed" the inspection and that no termites or other wood-boring insects had been discovered by Graham's inspection. There is no evidence that Lynch did anything other than pass along the contents of the certificate issued by Graham, the pest control company that inspected the structure. In particular, there is no evidence that Lynch itself represented the structure as free from wood-boring insects when it knew or should have known that there was carpenter ant infestation.

Lynch's liability as the listing broker, if any, arises out of its failure to pass along certain information that Graham had reported on the bill it submitted to Lynch. The bill contained the following notation: "Much over growth of trees and shrubs. Moisture problems around the outside, wherever wood is close to soil. Conditions such as these are conducive to carpenter ants." Lynch had this information prior to the closing and failed to disclose it to plaintiffs. ¹ By undertaking to arrange the pest inspection on plaintiffs' behalf, and by representing to plaintiffs that the house had "passed" the inspection, Lynch "had an affirmative duty to disclose any material facts relating to the substance of the representation which 'might affect [plaintiffs'] conduct in the transaction in hand' " (Scharf v. Tiegerman, 166 A.D.2d 697, 698, 561 N.Y.S.2d 271, quoting Restatement [Second]...