Opinion
8788 Index 656074/17
03-26-2019
EMPIRE OUTLET BUILDERS LLC, Plaintiff–Appellant, v. CONSTRUCTION RESOURCES CORP. OF NEW YORK, et al., Defendants–Respondents.
Silverman Shin & Byrne, New York (Andrew V. Achiron of counsel), for appellant. Law Office of Donovan L. Wickline, P.C., Brooklyn (Donovan L. Wickline of counsel), for respondents.
Silverman Shin & Byrne, New York (Andrew V. Achiron of counsel), for appellant.
Law Office of Donovan L. Wickline, P.C., Brooklyn (Donovan L. Wickline of counsel), for respondents.
Sweeny, J.P., Richter, Tom, Kapnick, Oing, JJ.
Order, Supreme Court, New York County (Eileen Bransten, J.), entered July 16, 2018, which, insofar as appealed from as limited by the briefs, granted defendants' motion to dismiss the third through sixth, eighth, and ninth causes of action of the amended complaint pursuant to CPLR 3211(a)(1) and (7) and 3016(b), unanimously affirmed, without costs.
The court correctly dismissed the third cause of action (fraud against defendant Construction Resources Corp. of New York [CRC] ) as duplicative of the first (breach of contract against CRC). Regardless of whether plaintiff sufficiently alleged breach of a duty independent of the Subcontractor Agreement, the fraud claim is duplicative because plaintiff will be fully compensated via the contract claim (see MBIA Ins. Corp. v. Credit Suisse Sec. [USA] LLC, 165 A.D.3d 108, 114, 84 N.Y.S.3d 157 [1st Dept. 2018] ). Plaintiff can recover more on the contract claim (the benefit of its bargain) (see id. ) than on the fraud claim, on which it is limited to out-of-pocket loss (see Lama Holding Co. v. Smith Barney, 88 N.Y.2d 413, 421, 646 N.Y.S.2d 76, 668 N.E.2d 1370 [1996] ).
Plaintiff contends that the fraud claim is not duplicative of the contract claim because it seeks rescission of part of the Subcontractor Agreement as an alternate remedy on the fraud claim. However, the equitable remedy of rescission is not available where there is an adequate legal remedy, and plaintiff does not explain why damages—a legal remedy—would be insufficient (see Lantau Holdings Ltd. v. General Pac. Group Ltd., 163 A.D.3d 407, 409, 81 N.Y.S.3d 384 [1st Dept. 2018] ).
In addition to being duplicative of the first cause of action, the third cause of action—like the fourth (fraud against defendant Dawn Varrone, CRC's president)—was correctly dismissed for lack of reliance. The documentary evidence and plaintiff's own pleading show that plaintiff did not sign the Subcontractor Agreement in reliance on CRC's and Ms. Varrone's alleged misrepresentations that CRC's insurance complied with the Agreement; indeed, the documentary evidence contradicts plaintiff's allegation that Ms. Varrone—as opposed to CRC—made a misrepresentation (see Biondi v. Beekman Hill House Apt. Corp., 257 A.D.2d 76, 81, 692 N.Y.S.2d 304 [1st Dept. 1999], affd 94 N.Y.2d 659, 709 N.Y.S.2d 861, 731 N.E.2d 577 [2000] ). Rather, plaintiff signed based on its insurance broker's erroneous assurance that the insurance met the Agreement's requirements (see HSH Nordbank AG v. UBS AG, 95 A.D.3d 185, 207, 941 N.Y.S.2d 59 [1st Dept. 2012] ; Zanett Lombardier, Ltd. v. Maslow, 29 A.D.3d 495, 815 N.Y.S.2d 547 [1st Dept. 2006] ; Sisler v. Security Pac. Bus. Credit, 201 A.D.2d 216, 222, 614 N.Y.S.2d 985 [1st Dept. 1994], lv dismissed 84 N.Y.2d 978, 622 N.Y.S.2d 917, 647 N.E.2d 123 [1994] ).
That Ms. Varrone did not make a misrepresentation, as noted above, is an additional reason for dismissing the fourth cause of action (see e.g. Zanett, 29 A.D.3d at 495, 815 N.Y.S.2d 547 ).
Upon the dismissal of the fraud claims, the fifth and sixth causes of action (conspiracy to defraud and aiding and abetting fraud) must also be dismissed (see e.g. Mosaic Caribe, Ltd. v. AllSettled Group, Inc., 117 A.D.3d 421, 423, 985 N.Y.S.2d 33 [1st Dept. 2014] [conspiracy]; McBride v. KPMG Intl., 135 A.D.3d 576, 578, 24 N.Y.S.3d 257 [1st Dept. 2016] [aiding and abetting] ). In any event, "conspiracy to commit a fraud is never of itself a cause of action" ( Brackett v. Griswold, 112 N.Y. 454, 467, 20 N.E. 376 [1889] ; see Hoeffner v. Orrick, Herrington & Sutcliffe LLP, 85 A.D.3d 457, 458, 924 N.Y.S.2d 376 [1st Dept. 2011] ). The court correctly dismissed the eighth cause of action (unjust enrichment against CRC) because there exists an actual agreement between the parties (see Georgia Malone & Co., Inc. v. Rieder, 19 N.Y.3d 511, 516, 950 N.Y.S.2d 333, 973 N.E.2d 743 [2012] ; Corsello v. Verizon N.Y., Inc., 18 N.Y.3d 777, 790, 944 N.Y.S.2d 732, 967 N.E.2d 1177 [2012] ["unjust enrichment is not a catchall cause of action to be used when others fail"] ). The court also correctly dismissed the ninth cause of action (unjust enrichment against Ms. Varrone and defendant Michael Varrone) (see Corsello, 18 N.Y.3d at 790, 944 N.Y.S.2d 732, 967 N.E.2d 1177 ).