OHM NYC LLC v. TIMES SQUARE ASSOCIATES LLC (2019)

Order, Supreme Court, New York County (Charles E. Ramos, J.), entered August 27, 2018, which granted the part of defendants' motion pursuant to CPLR 3211 seeking to dismiss the causes of action for fraudulent inducement and rescission, unanimously reversed, on the law, with costs, and the motion denied.

The complaint alleges multiple instances of defendants misrepresenting to plaintiff that the Bridge, a portion of the ground floor of a building, would be included in the leased premises.  These misrepresentations, which the complaint alleges were made to induce plaintiff into entering into the lease, were not promises of future performance, but misrepresentations of a then present fact.  Thus, the complaint states a cause of action for fraudulent inducement that is not duplicative of the breach of contract claim (see Deerfield Communications Corp. v. Chesebrough–Ponds, Inc., 68 N.Y.2d 954, 510 N.Y.S.2d 88, 502 N.E.2d 1003 [1986];  MBIA Ins. Corp. v. Countrywide Home Loans, Inc., 87 A.D.3d 287, 294, 928 N.Y.S.2d 229 [1st Dept. 2011];  GoSmile, Inc. v. Levine, 81 A.D.3d 77, 81, 915 N.Y.S.2d 521 [1st Dept. 2010], lv dismissed 17 N.Y.3d 782, 929 N.Y.S.2d 83, 952 N.E.2d 1077 [2011] ).

Contrary to defendants' contention, the disclaimer and merger provision of the subject lease does not provide a ground for dismissing the fraudulent inducement claim.  There is nothing in the record to suggest that plaintiff knew or should have known that the Bridge would not be included in the leased premises, as was originally represented.  Moreover, there is nothing in the record to suggest that plaintiff could have discovered the terms of the lease of the adjacent premises or any promises about the Bridge that defendants may have made to the tenants of the adjacent premises, which would be facts peculiarly within defendants' knowledge (see Basis Yield Alpha Fund [Master] v. Goldman Sachs Group, Inc., 115 A.D.3d 128, 137–140, 980 N.Y.S.2d 21 [1st Dept. 2014] ).

In view of the reinstatement of the fraud claim, the rescission claim should also be reinstated (see Callanan v. Keeseville, Ausable Chasm & Lake Champlain R.R. Co., 199 N.Y. 268, 284, 92 N.E. 747 [1910];  Babylon Assoc. v. County of Suffolk, 101 A.D.2d 207, 215, 475 N.Y.S.2d 869 [2d Dept. 1984] ).

At oral argument before the motion court, defendants abandoned the part of their motion seeking to dismiss the remaining causes of action (see Elliott Intl. L.P. v. Vitro, S.A.B. de C.V., 95 A.D.3d 565, 945 N.Y.S.2d 1 [1st Dept. 2012];  Williamson v. Hodson, 147 A.D.3d 1488, 1489, 47 N.Y.S.3d 200 [4th Dept. 2017], lv denied 29 N.Y.3d 913, 2017 WL 2683465 [2017] ).