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225 WEST END AVE. ASSOCIATES v. BITTORF

August 31, 1990

225 WEST END AVENUE ASSOCIATES, PLAINTIFF,
v.
FRITZ BITTORF, DEFENDANT.



The opinion of the court was delivered by: Robert P. Patterson, Jr., District Judge:

OPINION AND ORDER

This is defendant's motion for summary judgment pursuant to Federal Rule of Civil Procedure 56.

BACKGROUND

Plaintiff's predecessor in interest, Wild Bill Realty Corp., and defendant entered into a contract of sale (the Contract) in June 1987 for the 42 unit building at 225 West End Avenue, New York, New York (the Premises).*fn1 Plaintiff alleges that defendant committed fraud by making misrepresentations to William Eichengrun ("Eichengrun"),*fn2 before the closing on November 19, 1987. Plaintiff seeks damages based on the contention that he relied on defendant's misrepresentations in an unsuccessful application to the New York Attorney General for approval of a plan to convert the Premises to a cooperative or a condominium ("the conversion plan").

The Attorney General rejected plaintiff's conversion plan because the Premises had one more "long-term vacancy" than was permitted by New York General Business Law § 352-eeee(2) ("the anti-warehousing law") on April 15, 1988, the day plaintiff submitted its conversion plan.*fn3 The Attorney General found that, in addition to the four apartments listed on plaintiff's application as "long-term vacancies," Apartment 54 was a "long-term vacancy." A "long-term vacancy" is defined as a "dwelling unit[] not leased or occupied by bona fide tenants for more than five months prior to the date of such submission [of a conversion plan] to the department of law." N YGen.Bus.Law § 352-eeee(2). Plaintiff contends that defendant falsely represented that Apartment 54 had not been vacated until November 18, 1987 which caused plaintiff to rely on that apartment not being deemed a "long-term vacancy" on April 15, 1988.

Plaintiff does not claim that defendant did not comply with the requirements for a closing on the Contract.*fn4 Plaintiff's claim is that it detrimentally relied on misrepresentations made by defendant in the Contract and after the signing of the Contract, which were not required for the closing of the sale.

DISCUSSION

To grant a motion for summary judgment a court must find that there is no genuine issue as to any material fact, and that the moving party is entitled to judgment as a matter of law because, after sufficient time for discovery, the non-moving party has failed to make a sufficient showing of an essential element of its case as to which it has the burden of proof. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986).

Here, plaintiff has the burden of proving fraud which requires proving the following elements: (1) that defendant misrepresented a fact, (2) which was false and known to be false by the defendant, (3) that the representation was made for the purpose of inducing the plaintiff to rely upon it, (4) the plaintiff justifiably did so rely, and (5) the reliance caused injury to plaintiff. See Clearview Concrete Products Corp, v. S. Charles Gherardi, Inc., 88 A.D.2d 461, 453 N.Y.S.2d 750, 754-55 (2d Dept. 1982) (citing Channel Master Corp. v. Aluminum Ltd. Sales, 4 N.Y.2d 403, 176 N.Y.S.2d 259, 151 N.E.2d 833 (1958); Restatement, Torts 2d, § 524).

Plaintiff alleges four misrepresentations by defendant: the Contract, defendant's affidavit of November 19, 1987, an oral statement by defendant on November 19, 1987, and defendant's affidavit of February 23, 1989. The Court finds that the Contract and the affidavit of November 19, 1987 cannot constitute fraud because they fail to offer information upon which plaintiff could justifiably rely for the proposition that Apartment 54 was vacant for less than five months on April 15, 1988. The Court finds that the oral statement and the February 23, 1989 affidavit do not constitute fraud here because plaintiff was not justified in relying on those two representations as the basis for believing that the conversion plan would satisfy the anti-warehousing law and because reliance on the representations in those two documents was not the cause of plaintiff's injury.*fn5

A. The Contract and Affidavit of November 19, 1987

In the Opinion and Order of November 14, 1989, the Court reviewed in detail the texts of the Contract and defendant's affidavit of November 19, 1987, which plaintiff had submitted in support of its fraud claim. The Court found that the Contract and defendant's affidavit of November 19, 1987 made no representations upon which plaintiff could rely either for the proposition that Apartment 54 would not be a "longterm vacancy" on April 15, 1988 or for the proposition that the Premises would satisfy the conditions of the anti-warehousing law on April 15, 1988. Neither document stated or implied that Apartment 54 had not become vacant earlier than November 15, 1987. See Opinion at 7-9. Plaintiff has come forward with no evidence to contradict those conclusions as to the meaning of the Contract and the affidavit of November 19, 1987. Accordingly, the Court finds that the Contract and the November 19, ...


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