MEITERMAN v. John Does 1–5, et al., Defendants. (2019)

Order, Supreme Court, New York County (Barbara Jaffe, J.), entered September 24, 2018, which denied defendants' motions to dismiss the complaint pursuant to CPLR 3106(b) and CPLR 3211(a)(1),(3), and (7), and granted pro se plaintiffs' cross motion for leave to file an amended complaint to the extent of directing plaintiffs to file a second proposed (first) amended complaint, unanimously reversed, on the law, without costs, defendants' motions granted and plaintiffs' motion denied.  The Clerk is directed to enter judgment accordingly.

Plaintiffs, the individuals who own the membership interests in a New York State limited liability corporation formed for the purpose of purchasing and developing certain real property, allege fraud and negligent misrepresentation in connection with their negotiations with defendants to purchase those membership interests and the attendant right of the LLC to purchase the property.

The court erred in concluding that plaintiffs are the real parties in interest and have standing to sue in their own names (see Centaur Props., LLC v. Farahdian, 29 A.D.3d 468, 817 N.Y.S.2d 7 [1st Dept. 2006] ).

In any event, the vague and general allegations in the original and amended pleadings that defendants misled plaintiffs about defendant's financial abilities and defendant's intent to consummate the transaction being negotiated are conclusory and fail to satisfy the standard for pleading fraud under CPLR 3016(b) (see Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 559, 883 N.Y.S.2d 147, 910 N.E.2d 976 [2009];  Cronos Group Ltd. v. XComIP, LLC, 156 A.D.3d 54, 61, 64 N.Y.S.3d 180 [1st Dept. 2017] ).  The complaint fails to state a cause of action for negligent misrepresentation, because plaintiffs do not allege the existence of a special or privity-like relationship (see J.A.O. Acquisition Corp. v. Stavitsky, 8 N.Y.3d 144, 148, 831 N.Y.S.2d 364, 863 N.E.2d 585 [2007] ).  As the proposed amendments are palpably insufficient as a matter of law, plaintiffs' motion for leave to amend should be denied (see Davis & Davis v. Morson, 286 A.D.2d 584, 730 N.Y.S.2d 293 [1st Dept. 2001] ).

Plaintiffs' arguments that the appeal is defective due to improper service and that defendants submitted an incomplete record on appeal are without merit.