Opinion
05-03-2017
1810 E & J RESTAURANT CORP., et al., appellants, v. RED AND BLUE PARROT, INC., et al., respondents.
Lieb at Law, P.C., Center Moriches, NY (Dennis C. Valet of counsel), for appellants. Janus Law, P.C., Garden City, NY (Michael E. Janus of counsel), for respondents.
Lieb at Law, P.C., Center Moriches, NY (Dennis C. Valet of counsel), for appellants.
Janus Law, P.C., Garden City, NY (Michael E. Janus of counsel), for respondents.
RUTH C. BALKIN, J.P., JEFFREY A. COHEN, ROBERT J. MILLER, and VALERIE BRATHWAITE NELSON, JJ.
In an action, inter alia, to rescind a contract and a lease and to recover damages for fraud, the plaintiffs appeal, as limited by their brief, from so much of an order of the Supreme Court, Nassau County (Brandveen, J.), dated December 16, 2015, as denied that branch of their motion which was for summary judgment on so much of the complaint as sought to rescind the contract and lease on the grounds of fraud and unilateral mistake.
ORDERED that the order is affirmed insofar as appealed from, with costs.
The plaintiffs commenced this action to recover damages for fraud and to rescind a contract and a lease. Contrary to their contention, the Supreme Court did not err in denying that branch of their motion which was for summary judgment on so much of the complaint as sought to rescind the contract and lease on the grounds of fraud and unilateral mistake.
" ‘A contract induced by fraud ... is subject to rescission, rendering it unenforceable by the culpable party’ " (International Exterior Fabricators, LLC v. Decoplast, Inc., 128 A.D.3d 1016, 1018, 9 N.Y.S.3d 662, quoting Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Wise Metals Group, LLC, 19 A.D.3d 273, 275, 798 N.Y.S.2d 14 ). The elements of a cause of action sounding in fraud are a material misrepresentation of a fact, made with knowledge of the falsity, an intent to induce reliance thereon, justifiable reliance on the misrepresentation, and damages (see Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 559, 883 N.Y.S.2d 147, 910 N.E.2d 976 ; Ross v. Louise Wise Servs., Inc., 8 N.Y.3d 478, 488, 836 N.Y.S.2d 509, 868 N.E.2d 189 ; Lama Holding Co. v. Smith Barney, 88 N.Y.2d 413, 421, 646 N.Y.S.2d 76, 668 N.E.2d 1370 ; Channel Master Corp. v. Aluminum Ltd. Sales, 4 N.Y.2d 403, 406–407, 176 N.Y.S.2d 259, 151 N.E.2d 833 ). Where "the facts represented are not matters peculiarly within the party's knowledge, and the other party has the means available to him [or her] of knowing, by the exercise of ordinary intelligence, the truth or the real quality of the subject of the representation, he [or she] must make use of those means, or he [or she] will not be heard to complain that he [or she] was induced to enter into the transaction by misrepresentations" (Schumaker v. Mather, 133 N.Y. 590, 596, 30 N.E. 755 ; see
ACA Fin. Guar. Corp. v. Goldman, Sachs & Co., 25 N.Y.3d 1043, 1047, 10 N.Y.S.3d 486, 32 N.E.3d 921 ; Centro Empresarial Cempresa S.A. v. America Movil, S.A.B. de C.V., 17 N.Y.3d 269, 278, 929 N.Y.S.2d 3, 952 N.E.2d 995 ; Danann Realty Corp. v. Harris, 5 N.Y.2d 317, 323, 184 N.Y.S.2d 599, 157 N.E.2d 597 ). Here, the plaintiffs failed to establish that the alleged misrepresented facts were matters peculiarly within the defendants' knowledge, which they could not have discovered by the exercise of "ordinary intelligence" ( Schumaker v. Mather, 133 N.Y. at 596, 30 N.E. 755 ). Therefore, the plaintiffs failed to establish their prima facie entitlement to judgment as a matter of law rescinding the contract and lease on the ground of fraud.
In addition, inasmuch as the plaintiffs seek to rescind the contract and lease on the ground of a unilateral mistake of fact, they failed to establish the exercise of ordinary care in relation thereto, and, thus, failed to establish their prima facie entitlement to judgment as a matter of law rescinding the contract and lease on that ground (see Yorker v. Daniel Yorker, Ltd., 12 A.D.3d 506, 506, 783 N.Y.S.2d 857 ; Industron Assoc. v. United Innovations, 259 A.D.2d 592, 593, 687 N.Y.S.2d 642 ; William E. McClain Realty v. Rivers, 144 A.D.2d 216, 218, 534 N.Y.S.2d 530 ).
Accordingly, the Supreme Court properly denied that branch of the plaintiffs' motion which was for summary judgment on so much of the complaint as sought to rescind the contract and lease on the grounds of fraud and unilateral mistake, regardless of the sufficiency of the defendants' opposition papers (see Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642 ).