Whiteford Taylor & Preston L.L.P., Baltimore, MD (William
F. Ryan, Jr. of the bar of the State of Maryland, admitted
pro hac vice, of counsel), for appellant.
Drye & Warren LLP, New York (John M. Callagy of counsel),
Friedman, J.P., Renwick, Richter, Moskowitz, Kapnick, JJ.
Supreme Court, New York County (Charles E. Ramos, J.),
entered October 26, 2015, which granted defendant Foot
Locker, Inc.'s motion to dismiss the complaint as against
it pursuant to CPLR 3211(a)(7), unanimously affirmed, without
fraudulent misrepresentation claim based on the theory of
respondeat superior fails to state a cause of action. The
allegations reasonably permit the inference that the
verification of accounts receivable issued to Foot Locker by
nonparty G3K, a provider of marketing materials, fell within
the scope of defendant Smith's employment as Foot
Locker's "Director of In-Store Marketing, "
although they do not support a finding that verification was
within the scope of defendant Rainier's employment as
"Divisional Vice President of Franchise
Development." However, nothing in the complaint permits
the inference that Smith engaged in this fraudulent
verification in furtherance of Foot Locker's business,
rather than solely for personal motives (see Judith M. v
Sisters of Charity Hosp., 93 N.Y.2d 932');">93 N.Y.2d 932 ).
fraudulent misrepresentation claim based on implied actual
authority fails to state a cause of action. The allegation
that Smith procured marketing materials directly from G3K
permits the inference that Smith could reasonably have
believed that she had implied authority to verify G3K's
accounts receivable (see Greene v Hellman, 51 N.Y.2d
197, 204 ). However, she could not reasonably have
believed that she had the authority to verify receivables
falsely, and Foot Locker is not bound by the conduct in which
she engaged that "exceed[ed] [her] authority"
(Riverside Research Inst. v KMGA, Inc., 108 A.D.2d
365, 370 [1st Dept 1985], affd 68 N.Y.2d 689');">68 N.Y.2d 689
). The allegations do not support a finding that
Rainier could reasonably have believed he had authority to
verify G3K's accounts receivables.
fraudulent misrepresentation claim based on apparent
authority also fails to state a cause of action. As the trial
court correctly noted, Smith's and Rainier's job
titles were insufficient, by themselves, to convey that they
had authority over accounting matters. Moreover, the
complaint fails to allege any misleading facts or words by
Foot Locker (see DLJ Mtge. Capital, Inc. v
Kontogiannis, 102 A.D.3d 489, 489 [1st Dept 2013]. The
fraudulent misrepresentation claim based on authority by
estoppel fails to state a cause of action. The complaint does
not allege that Foot Locker intentionally or carelessly
caused plaintiff to believe that Smith or Rainier had the
authority to verify receivables on its behalf (see
Restatement [Second] of Agency § 8B). It alleges only
that Foot Locker knew or should have known of Smith's
fraudulent acts but did not take reasonable steps to notify
plaintiff of the acts, to plaintiff's detriment. However,
the allegations that Foot Locker knew or should have known of
Smith's fraudulent acts are conclusory. Nothing in the
complaint shows that Foot Locker was aware of the
communications between Smith and plaintiff.
complaint fails to state a cause of action for aiding and
abetting fraud. To the extent plaintiff argues that Foot
Locker is liable for the acts of its corporate employees
Smith and Rainier, it is relying on a theory of respondeat
superior (see Prudential-Bache Sec. v Citibank, 73
N.Y.2d 263, 276 ). We have rejected this argument
(see id.; Judith M., 93 N.Y.2d at 933).
Further, while the allegations establish G3K's fraud
scheme, nothing in the complaint permits the inference that
Foot Locker had knowledge of, or substantially assisted in,
the fraud (see Stanfield Offshore Leveraged Assets, Ltd.
v Metropolitan Life Ins. Co., 64 A.D.3d 472, 476 [1st
Dept 2009], lv denied 13 N.Y.3d 709');">13 N.Y.3d 709 ).
negligence claim fails to state a cause of action, because it
does not allege privity, or a relationship so close as to
approach privity, between plaintiff and Foot Locker from
which would arise a duty on Foot Locker's part to provide
plaintiff with accurate information regarding G3K's
receivables (see Security Pac. Bus. Credit v Peat Marwick
Main & Co., 79 N.Y.2d ...