Whitehead v. Town House Equities, Ltd.

• Decision Date: 07 June 2004
• Docket Number: 2003-02382.,2003-00445.
• Citation: 2004 NY Slip Op 04704,8 A.D.3d 367,780 N.Y.S.2d 15
• Parties: LILLIAN WHITEHEAD, Respondent, v. TOWN HOUSE EQUITIES, LTD., et al., Defendants, and THOMAS HANSARD et al., Appellants.
• Court: New York Supreme Court — Appellate Division

8 A.D.3d 367

780 N.Y.S.2d 15

2004 NY Slip Op 04704

LILLIAN WHITEHEAD, Respondent, v. TOWN HOUSE EQUITIES, LTD., et al., Defendants, and THOMAS HANSARD et al., Appellants.

2003-00445.

2003-02382.

Appellate Division of the Supreme Court of the State of New York, Second Department.

June 7, 2004.

In an action, inter alia, to rescind a deed to real property on the grounds of fraud, lack of mental capacity, and undue influence, (1) the defendant Thomas Hansard appeals from an order of the Supreme Court, Kings County (Barasch, J.), dated November 21, 2002, which denied his motion for summary judgment dismissing the complaint insofar as asserted against him, and (2) the defendant Money Store appeals from an order of the same court also dated November 21, 2002, which denied its motion for summary judgment dismissing the complaint insofar as asserted against it.

Ordered that the orders are reversed, on the law, with one bill of costs, the motions are granted, the complaint is dismissed insofar as asserted against the appellants, and the action against the remaining defendants is severed.

After orally accepting an offer from the defendant Thomas Hansard to purchase her dilapidated rooming house (hereinafter the premises) for $5,000, the assumption of approximately $100,000 of debt secured by liens on the premises for which she was personally liable, and permission to remain in an apartment at the premises for the remainder of her life, the 89-year-old plaintiff attended a closing and executed a deed transferring the premises to the defendant Town House Equities, Ltd. (hereinafter Town House), a company owned by Hansard's acquaintance, the defendant Calvin Holte. The plaintiff received $5,000 and remained in her apartment. After Hansard and Town House expended almost $100,000 in renovating the premises, Hansard secured a mortgage loan from a lender which later assigned the mortgage and note to the defendant Money Store. With the loan proceeds, Hansard paid off all of the existing liens on the premises, and purchased the premises in his own name.

The plaintiff commenced this action against Hansard, Holte, Town House, and Money Store to rescind the deed, alleging fraud, lack of mental capacity, and undue influence. Hansard and Money Store (hereinafter the appellants) separately moved for summary judgment dismissing the complaint insofar as asserted against them, and the Supreme Court denied the motions. We reverse.

To sustain a cause of action sounding in fraud, a party must show "a misrepresentation or a material omission of fact which was false and known to be false by the defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury" (Cayuga Partners v 150 Grand, 305 AD2d 527, 528 [2003]; see Clearview Concrete Prods. Corp. v S. Charles Gherardi, Inc., 88 AD2d 461 [1982]). Fraud in the execution, as alleged by the plaintiff in this action, arises where a party did not know the nature or the contents of the document being signed, or the consequences of signing it, and was nonetheless misled into doing so (see Fleming v Ponziani, 24 NY2d 105, 111 [1969]; Gilbert v Rothschild, 280 NY 66, 71-72 [1939]; National Bank of N. Am. v Around the Clock Truck Serv., 58 Misc 2d 660 [1968]). The appellants established their entitlement to judgment as a matter of law in this regard by submitting deposition testimony and affidavits that no misrepresentations were made to the plaintiff, she understood the nature and consequences of the document she signed, and received more than fair value in consideration for the conveyance of the premises, as well as documentary evidence that the plaintiff was an experienced real estate investor (see Pommer v Trustco Bank, 183 AD2d 976, 977-978 [1992]). In opposition, the plaintiff made only conclusory allegations that she was somehow tricked into executing the deed. These allegations were insufficient to raise a triable issue of fact (see New York City School Constr. Auth. v Koren-DiResta Constr. Co., 249 AD2d 205 [1998]).

With respect to the claim of undue influence, the appellants established that Hansard had no relationship of confidence or trust...