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Daly v. Kochanowicz

August 18, 2009

STEPHANIE DALY, APPELLANT,
v.
TARA KOCHANOWICZ, ET AL., RESPONDENTS, CHRISTOPHER ABATE, ET AL., DEFENDANTS.



APPEAL by the plaintiff, in an action, inter alia, to recover damages for fraud and breach of fiduciary duty, from an order of the Supreme Court (Aldo A. Nastasi, J.), entered March 3, 2008, in Westchester County, which granted the motion of the defendants Tara Kochanowicz, Robert Janowitz, Kathleen Spadaro, and Spadaro Real Estate, Ltd., to dismiss the complaint pursuant to CPLR 3211(a)(1), (5), and (7) and 3016(b).

The opinion of the court was delivered by: Dickerson, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

FRED T. SANTUCCI, J.P., ANITA R. FLORIO, JOSEPH COVELLO and THOMAS A. DICKERSON, JJ.

(Index No. 23128/07)

OPINION & ORDER

The verified complaint in this action describes an alleged scheme to defraud the plaintiff in connection with her purchase of a house in Westchester County. Specifically, the plaintiff alleges that, in or about April 2006, she retained the services of the defendant CS Realty & Relocations Services, Inc. (hereinafter CS Realty), in connection with the purchase of the subject property, located in Mamaroneck, and owned by the defendants Tara Kochanowicz and Robert Janowitz (hereinafter the sellers). The defendant Christopher Abate of CS Reality showed the plaintiff the subject property, which was listed for sale by the defendant Kathleen Spadaro of the defendant Spadaro Real Estate, Ltd (hereinafter Spadaro RE).

Prior to entering into a contract of sale, the plaintiff hired a private inspector to inspect the subject property. The inspector discovered some evidence of water intrusion in the basement. According to the plaintiff, the inspector inquired of the sellers regarding any history of water problems. The sellers denied ever having any water problems in the house. Further, the plaintiff stated, upon information and belief, that she made verbal inquiry to the sellers as to whether they had experienced any history of water problems in the subject property. Again, the sellers denied having any water problems. The plaintiff claims that the sellers knew that their representation to her was false, and that they made it to induce her into purchasing the subject property. The plaintiff claimed that, in reliance on the sellers' material misrepresentation to her and to the private home inspector, the plaintiff entered into a contract of sale on May 12, 2006. On July 6, 2006, the plaintiff closed on the purchase of the subject property.

On November 6, 2006, the plaintiff received a document from the Federal Emergency Management Agency (hereinafter FEMA) providing information regarding flood insurance loss payment history with regard to the subject property. The document listed a payout for a flood that occurred on September 8, 2004. The plaintiff asserted, upon information and belief, that the sellers intentionally failed to disclose this information to her as a part of the scheme to defraud her and to induce her into purchasing the subject property.

On March 2, 2007, and April 15, 2007, as a result of two separate severe storms, the subject property became "catastrophically flooded," forcing the plaintiff to relocate and causing severe damage to the subject property and to the contents thereof.

The Complaint

In the first cause of action asserted against all defendants, the plaintiff alleges that the defendants knew or should have known of the property's history of severe flooding. She claimed that the defendants acted in concert to deceive her into believing that the property did not have such a history. The plaintiff alleged that she justifiably relied on the defendants' misrepresentations, and had been injured as a result. The plaintiff claimed that the defendants' actions, or lack thereof, constituted a pattern of behavior exhibiting moral turpitude. The plaintiff sought damages in an amount to be determined at trial, as well as punitive and exemplary damages in the sum of not less than $10,000,000.

In the second cause of action asserted against all defendants, the plaintiff essentially reiterated the contentions set forth in the first cause of action.

In the third cause of action asserted against the defendants Abate and CS Realty, the plaintiff alleged that these defendants, as her broker, owed her a fiduciary duty, but that they allegedly failed to advise her of the subject property's history. The plaintiff claimed that these defendants breached their fiduciary duty to her by failing to act with due diligence on the subject property's flood history, and by failing or refusing to provide information responsive to her requests regarding the subject property's history. The plaintiff again asserted that these defendants' actions constituted a pattern of behavior exhibiting moral turpitude. The plaintiff contended that, as a result of these defendants' actions, the plaintiff lost her employment and suffered other damages in an amount to be determined at trial. She sought punitive and exemplary damages in an amount not less than $10,000,000.

In the fourth cause of action asserted against all defendants, the plaintiff claimed that she was entitled to "an account[ing]... of all monies and proceeds paid at closing in connection with the purchase of the subject property, including... any payments made to the Sellers, mortgage brokers, title company, and legal fees."

Motion To Dismiss

The sellers and their real estate brokers, Spadaro, and Spadaro RE, moved to dismiss the complaint pursuant to CPLR 3211(a)(1), (5), and (7) and 3016(b). In support of their motion, these defendants submitted, among other documents, an affidavit of the defendant seller Tara Kochanowicz.

In her affidavit, Kochanowicz stated that she and Janowitz, her husband, had owned the subject property. In April 2006 they listed the property for sale through Spadaro RE. The listing sheet indicated that flood insurance may be required by a lender.

On April 24, 2006, the sellers accepted the plaintiff's offer to purchase the property for $485,000. Prior to signing the contract of sale, the plaintiff hired a private inspector to inspect the premises.

Kochanowicz was not home during this inspection. According to Kochanowicz, the inspector did not make verbal inquiries to her regarding any history of water problems in the lower level of the premises. She stated that she did not make any statements to the plaintiff's inspector, and that she did not make any verbal or written statements to the plaintiff concerning the condition of the house or, specifically, the basement, prior flooding, or water infiltration. More specifically, Kochanowicz stated that she "did not say to Plaintiff or to her inspector any words to the effect that we never had water problems in the basement."

Kochanowicz claimed that her attorney showed her and Janowitz the plaintiff's proposed third rider to the contract of sale, in which the plaintiff sought a representation by them that, at the time of closing, the basement would be free of seepage. The sellers refused to make that representation, and this item was stricken from the third rider.

Kochanowicz claimed that several provisions of the contract of sale conclusively established that the plaintiff's claims were barred by the provisions in the contract establishing that the plaintiff did not rely on statements by the sellers. In this regard, she observed that paragraph 11(c) of the contract stated that, "[e]xcept as otherwise expressly set forth in this contract, none of Seller's covenants, representations, warranties or other obligations contained in this Contract shall survive Closing." In support of her contentions in this regard, Kochanowicz also relied on paragraph 12 of the contract, set forth fully below.

Kochanowicz claimed that she and Janowitz relied on the plaintiff's representations that she was fully aware of the physical condition and state of repair of the house based on her own inspection and investigation; that she entered into the contract based solely upon her inspection and investigation; that she did not rely on any information, data, statements or representations, written or oral, as to the physical condition or state of repair of the house made by the sellers or their representatives; and that she accepted the house "as is." Kochanowicz stated that the plaintiff in no way indicated that she was relying on any alleged verbal statements by the sellers to the effect that they had no history of water problems in the lower level of the house.

Kochanowicz also observed that the plaintiff acknowledged that her private inspector discovered some evidence of water intrusion in the basement. Thus, she claimed that the risk of water intrusion was not information within the peculiar knowledge of the sellers. This discovery was made prior to the date on which the plaintiff entered into the contract of sale. Thus, according to Kochanowicz, it would be unreasonable for the plaintiff to rely on an alleged statement by the sellers that there was no history of water problems where her inspector noted evidence of water infiltration, the house is in a flood zone, and the survey shows a river flowing through the back of the property.

In support of her contentions, in addition to paragraphs 11 and 12 of the contract, Kochanowicz also relied on paragraph 28(a), set forth below. She also relied on paragraphs 4(a), 12, 14, and ...


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