Yenrab, Inc. v. 794 Linden Realty, LLC

• Decision Date: 01 December 2009
• Docket Number: 2008-09527
• Citation: 892 N.Y.S.2d 105,2009 NY Slip Op 9020,68 A.D.3d 755
• Parties: YENRAB, INC., Doing Business as PARTY FEVER, Respondent, v. 794 LINDEN REALTY, LLC, et al., Appellants.
• Court: New York Supreme Court — Appellate Division

68 A.D.3d 755

2009 NY Slip Op 9020

892 N.Y.S.2d 105

YENRAB, INC., Doing Business as PARTY FEVER, Respondent, v. 794 LINDEN REALTY, LLC, et al., Appellants.

2008-09527

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

Decided December 1, 2009.

In an action, inter alia, to recover damages for breach of contract, the defendants appeal, as limited by their brief, from so much of an order of the Supreme Court, Kings County (Balter, J.), dated September 10, 2008, as denied those branches of their motion which were pursuant to CPLR 3211 (a) (1) and (7) to dismiss the complaint insofar as asserted against the defendant Elizabeth Briguglio, and the first, second, third, and fourth causes of action insofar as asserted against the defendant 794 Linden Realty, LLC, and denied that branch of their motion which was to strike the plaintiff's demand for $805,940.69 in noncompensatory damages.

Ordered that the order is modified, on the law, by (1) deleting the provision thereof denying those branches of the defendants' motion which were pursuant to CPLR 3211 (a) (1) and (7) to dismiss the complaint insofar as asserted against the defendant Elizabeth Briguglio, and substituting therefor a provision granting those branches of the motion, (2) by deleting the provisions thereof denying those branches of the motion which were pursuant to CPLR 3211 (a) (1) and (7) to dismiss the first, third, and fourth causes of action insofar as asserted against the defendant 794 Linden Realty, LLC, and substituting therefor a provision granting those branches of the motion, and (3) by deleting the provision thereof denying that branch of the motion which was to strike the plaintiff's demand for $805,940.69 in noncompensatory damages, and substituting therefor a provision granting that branch of the motion; as so modified, the order is affirmed insofar as appealed from, without costs or disbursements.

On May 17, 2006 the plaintiff, a party supply company, entered into a lease to rent certain commercial premises from the defendant 794 Linden Realty, LLC (hereinafter Linden). The defendant Elizabeth Briguglio was a member and agent of Linden. The plaintiff alleged that, prior to the execution of the lease, Briguglio made numerous misrepresentations that certain repairs would be performed in the premises, including repairs of water leaks through the common walls, ceiling, roof, and in the basement, which induced the plaintiff to sign the lease. These repairs were never performed. The plaintiff further alleged that, during the course of its tenancy, the defendants repeatedly promised to make repairs in the premises, including repairs of water leaks, and repeatedly failed to perform those repairs.

On or about December 4, 2007 the plaintiff commenced this action. The first, fourth, and fifth causes of action sought to recover damages against both defendants for fraud, fraudulent inducement and gross negligence, and negligence, respectively. The second and third causes of action sought to recover damages only against Linden for breach of contract, and unjust enrichment, respectively. The plaintiff demanded $1,000,000 in damages, which included $194,059.31 in property damages, and $805,940.69 in noncompensatory damages for lost profits and business losses.

Contrary to the defendants' contention, the Supreme Court properly denied that branch of the defendants' motion which was pursuant to CPLR 3211 (a) (1) to dismiss the second cause of action to recover damages against Linden only for breach of contract. "`To succeed on a motion to dismiss pursuant to CPLR 3211 (a) (1), the documentary evidence that forms the basis of the defense must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff's claim'" (Trade Source v Westchester Wood Works, 290 AD2d 437, 438 [2002], quoting Teitler v Pollack & Sons, 288 AD2d 302 [2001]). Here, the documentary evidence put forth, including the lease between the parties, did not conclusively dispose of the plaintiff's breach of contract claims against Linden. Specifically, the lease at paragraph 82 required Linden to repair water leakages due to common broken pipes, and paragraph 49 (g) required it to perform all structural repairs, defined as repairs to the roof, exterior walls, and foundation. In the complaint, the plaintiff alleged that water leaked from holes in the ceiling as well as through the walls from the adjacent premises, and pipes in the basement. Further, there is no merit to the defendants' contention that the provisions in the lease which stated that the plaintiff took the premises "as is" conclusively disposed of its claims, because the plaintiff's complaint alleged that Linden failed to perform repairs for conditions that arose during the tenancy.

Moreover, the Supreme Court properly denied that branch of the defendants' motion which was pursuant to CPLR 3211 (a) (7) to dismiss the second cause of action for breach of contract. "`On a motion to dismiss pursuant to CPLR 3211, the pleading is to be afforded a liberal construction'" (Arnav Indus., Inc. Retirement Trust v Brown, Raysman, Millstein, Felder & Steiner, 96 NY2d 300, 303 [2001], quoting Leon v Martinez, 84 NY2d 83, 87 [1994]). Here, construing the complaint in the light most favorable to the plaintiff and accepting all allegations as true (see Pacific Carlton Dev. Corp. v 752 Pac., LLC, 62 AD3d 677, 679 [2009]; Heffez v L & G Gen. Constr., Inc., 56 AD3d 526 [2008]), the complaint stated a cause of action alleging breach of contract against Linden.

"[A] cause of action premised upon fraud cannot lie where it is based on the same allegations as the breach of contract claim" (Heffez v L & G Gen. Constr., Inc., 56 AD3d at 527). Where "a claim to recover damages for fraud is premised upon an alleged breach of contractual duties and the supporting allegations do not concern representations which are collateral or extraneous to the terms of the parties' agreement, a cause of action sounding in fraud does not lie" (McKernin v Fanny Farmer Candy Shops, 176 AD2d 233, 234 [1991]; Krantz v Chateau Stores of Canada, 256 AD2d 186, 187 [1998]). Moreover, "[a]lthough an agent for a disclosed principal may be held liable to a third party where the agent has committed fraud . . . a cause of action to recover damages for fraud will not arise when the only fraud charged relates to a breach of contract" (Mastropieri v Solmar Constr. Co., 159 AD2d 698, 700 [1990]). Additionally, although "a misrepresentation of material fact, which is collateral to the contract and serves as an inducement for the contract, is sufficient to sustain a cause of action alleging fraud" (WIT Holding Corp. v...