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Johnny BELIZAIRE and Danielle Belizaire, Plaintiffs, v. KELLER WILLIAMS LANDMARK II, Shameer Fazal, Marco Gomez and Craig Kaplan, Defendants.
The following papers were read on this motion:/Documents Numbered
Notice of Petition, Affidavits (Affirmations), Exhibits Annexed 4
Verified Answer 28
Reply Affidavit 32
Motion by the defendants for an order pursuant to CPLR 3211 (a) (1) and 3211 (a) (7) dismissing the complaint against individual defendants Shameer Fazal, Marco Gomez and Craig Kaplan and pursuant to CPLR 3212 for summary judgment dismissing the complaint against defendant Keller Williams Landmark II (corporate defendant or Keller Williams) is decided as hereinafter provided.
Plaintiffs pro se bring a cause of action against defendants for alleged intentional or negligent misrepresentation of real estate taxes.
The defendant Keller Williams was retained in or about June 2017 to assist in the sale of 1110 Philip Court, Valley Stream, New York (the property) pursuant to the Exclusive Right to Sell Contract (listing contract) that was signed by the property owners and the listing agent on behalf of the corporate broker, Keller Williams. The data sheet that contained information about the property including real estate taxes, was completed by the listing agent from information provided by the property owners and submitted to the Long Island Multiple Listing Service (MLS). The real estate taxes listed on the data sheet were $8,331.27.00, representing the school tax for the period July 1, 2016 through June 30, 2017. The data sheet did not indicate that as of June 2017 there was an annual county tax of $2,105.80 and an annual village tax of $2,355.10.
The plaintiffs signed a New York State form pursuant to Section 442(a) of the Real Property Law entitled “Agency Disclosure” whereby the plaintiff acknowledged that both the selling agent and corporate broker were acting as the agent of the property owners in the transaction, rather than as the buyer's agent. The Agency Disclosure advised the plaintiffs that the corporate broker owed no fiduciary duties to the plaintiffs.
On or about July 15, 2017, the plaintiffs submitted their offer to purchase the property at a price of $477,000.00 (purchaser offer), which offer was accepted by the property owners. A listing agent prepared a “Deal Sheet” which was forwarded to the attorneys for the respective parties that contained, among other things, the purchase price, the amount of the plaintiff's financing, the attorneys for the respective parties and the real estate taxes as known to the parties at the time of the acceptance of the offer. Prior to preparing the Deal Sheet, the listing agent was made aware that the real estate taxes were improperly listed on the MLS data sheet. Based on the information provided to the listing agent by the property owners, the Deal Sheet reflected the taxes at $10,686.37 and not $8,331.27 as was previously stated in the MLS data sheet.
The plaintiffs and the sellers entered into a contract of sale in August 2017 in which corporate broker, and not any individual defendant was recognized as the broker in the transaction. The fact that the corporate broker was the procuring cause of the transaction is not in dispute. Several weeks had elapsed between the offer being accepted by the property owners and the contract of sale being signed by all parties. The plaintiffs did not independently confirm the total amount of real estate taxes on the property.
During the period between the execution of the contract of sale and the closing of the transaction, the plaintiffs were made aware of the actual amount of the real estate taxes when the plaintiffs' attorney received the title search. Again, the plaintiffs did not investigate the discrepancy in the tax calculations. The sale of the property took place on November 16, 2017 (the closing) at which time the title to the property was transferred from the property owners to the plaintiffs.
The combination of the school tax, the county tax and the village tax amounted to $13,124.52. At the time of the closing, the corporate broker, and not the individual defendants, was issued a check in the sum of $22,562.50 (the commission) by the property owners as payment in full of the real estate brokerage commission representing 4.75% of the gross sales price of $475,000.00. The commission was paid directly to the corporate broker pursuant to Article 12-A of the New York State Real Property Law. Neither the listing agent nor the selling agent were compensated by any of the parties to this transaction. Once the commission was endorsed by Keller Williams and deposited into the firm's bank account, Keller Williams paid both listing agent and the selling agent as is normal custom and practice in the industry. It is not disputed that the real estate taxes were initially listed as being $8,331.00.
By their complaint, the plaintiffs allege that “based on the attractive tax rate” in the posted listing, plaintiffs and other potential buyers contacted defendants and made arrangements to view the house.” (Complaint ¶ 4).
The complaint further alleges that:
“5. On July 19, 2017, defendants circulated a deal sheet which indicated the taxes were $10,686.27 annually. This change occurred with no advance warning or conversation with the plaintiffs. Plaintiffs asked defendants about this discrepancy and defendants claimed they made a ‘mistake.’ Defendants assured plaintiffs that the latest tax numbers at that time were correct.
6. On November 2, 2017, it was revealed to the plaintiffs that the taxes were $13,124.52 annually. Defendants offered no viable explanation for this grave discrepancy.
7. Defendants intentionally misrepresented the tax rate on the property in order to induce the marketplace to pursue a transaction with the seller. Plaintiffs relied on the brokers' misrepresentations and are irreparably damaged as a result.
10. By reasons of the facts and circumstances stated above, defendant intentionally or negligently misrepresent material details to the general public regarding a property that they have listed for sale.”
“To succeed on a motion to dismiss based upon documentary evidence pursuant to CPLR 3211 (a) (1), the documentary evidence must utterly refute the plaintiff's factual allegations, conclusively establishing a defense as a matter of law” (Gould v. Decolator, 121 AD3d 845, 847 [2d Dept 2014]; see Goshen v. Mutual Life Ins. Co. of NY, 98 NY2d 314, 326 ; Leon v. Martinez, 84 NY2d 83, 84  ). In considering a motion to dismiss a complaint pursuant to CPLR 3211 (a) (7), the court must accept the facts as alleged in the petition as true, accord petitioner the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see Leon v. Martinez, supra; Sokol v. Leader, 74 AD3d 1180).
“It is well established that ‘the proponent of a summary judgment motion must make a prima facie showing of entitlement to judgment as a matter of law, tendering sufficient evidence to demonstrate the absence of any material issues of fact.’ (Alvarez v. Prospect Hosp., 68 NY2d 320, 324 ; see also William J. Jenack Estate Appraisers & Auctioneers, Inc. v. Rabizadeh, 22 NY3d 470, 475-476 ; CPLR 3212[b] ). Once the movant makes the proper showing, ‘the burden shifts to the party opposing the motion for summary judgment to produce evidentiary proof in admissible form sufficient to establish the existence of material issues of fact which require a trial of the action’ (Alvarez, 68 NY2d at 324). The ‘facts must be viewed in the light most favorable to the non-moving party’ (Vega v. Restani Constr. Corp., 18 NY3d 499, 503  [internal quotation marks omitted] ). However, bald, conclusory assertions or speculation and ‘[a] shadowy semblance of an issue’ are insufficient to defeat summary judgment (S.J. Capelin Assoc. v. Globe Mfg. Corp., 34 NY2d 338, 341  ), as are merely conclusory claims (Putrino v. Buffalo Athletic Club, 82 NY2d 779, 781  ).
(Stonehill Capital Management, LLC v. Bank of the West, 28 NY3d 439 ; see also Fairlane Financial Corp. v. Longspaugh, 144 AD3d 858 [2d Dept 2016]; Phillip v. D & D Carting Co., Inc., 136 AD3d 18 [2d Dept 2015] ).
New York generally imposes no duty on either the seller or the seller's agent to disclose information concerning the property unless there is a confidential or fiduciary relationship between the parties or some conduct on the part of the seller or broker that constitutes and active concealment (Glazer v. LoPreste, 278 AD2d 198 [2d Dept 2000]; London v. Courduff, 141 AD2d 803 [2d Dept 1988]; see also Chi Lo Liu v. Radmin, 106 AD3d 1042 [2d Dept 2013] [“A conventional business relationship, without more, is insufficient to create a fiduciary relationship.” [quoting Legend Autorama, Ltd. v. Audi of Am., Inc., 100 AD3d 714, 717] ]; Colasacco v. Robert E. Lawrence Real Estate, 68 AD3d 706 [2d Dept 2009] ). Here, the corporate broker and its agents were acting as the agents of the property owners, not the plaintiffs.
“If the facts represented are not matters peculiarly within the party's knowledge, and the other party has the means available to him of knowing, by the exercise of ordinary intelligence, the truth or the real quality of the representation, he must make use of those means, or he will not be heard to complain that he was induced to enter into the transaction by misrepresentations” (Friedler v. Palyompis, 44 AD3d 611 [2d Dept 2007]; Curran, Cooney, Penney v. Young & Koomans, 183 AD2d 742, 743 [2d Dept 1992] [quoting Schumaker v. Mather, 133 NY 590  ] ). Further, “New York adheres to the doctrine of caveat emptor and imposes no liability on a seller for failing to disclose information regarding the premises when the parties deal at arm's length, unless there is some conduct on the part of the seller which constitutes active concealment” (Simone v. Homecheck Real Estate Servs., Inc., 42 AD3d 518, 520 [2d Dept 2007] ).In Esposito v. Saxon Home Realty, Inc., 254 AD2d 451 [2d Dept 1998], actions were brought to rescind a contract for sale of real property on the ground of fraud in the inducement, and to recover damages for legal malpractice. In that case, the court dismissed the purchasers' fraud claim against the real estate brokerage firm and its agents. The court held that the information concerning boundaries of subject parcel were not particularly within agency's knowledge, and purchasers could have ascertained that information by means available to them through exercise of ordinary intelligence, finding:
“It is well settled that in a real property contract, unless the facts represented are matters particularly within one party's knowledge, the other party must make use of means available to learn by the exercise of ordinary intelligence, the truth of such matters ‘or he will not be heard to complain that he was induced to enter into the transaction by misrepresentation’ (Danann Realty Corp. v. Harris, 5 NY2d 317, 322). The boundaries of the subject property were not a matter particularly within the knowledge of the defendant Saxon Home Realty, Inc. (hereinafter Saxon), and could have been ascertained by the plaintiffs by means available to them through the exercise of ordinary intelligence (see Eisenthal v. Wittlock, 198 AD2d 395).
(Esposito, 254 AD2d at 451).
Additionally, in Behar v. Glickenhaus Westchester Development, Inc. 122 AD3d 784, 786 [2d Dept 2014], purchasers of residential property located adjacent to a golf course brought an action against vendor, seeking to recover damages for fraud based on seller's alleged fraudulent concealment of risks posed by errant golf balls. The court held that sellers had no duty to disclose any information regarding the premises to the purchasers.
“Here, Glickenhaus had no duty to disclose any information regarding the premises under the doctrine of caveat emptor (citations omitted). Moreover, any risk to the property posed by the incursion of golf balls was a matter readily ascertainable by the plaintiffs through the exercise of ordinary intelligence, and the documentary evidence submitted on the motion demonstrates that any such concerns were a matter of public record not peculiarly within the knowledge of Glickenhaus.”
In the instant action, the amount of real estate taxes could have been ascertained by the plaintiffs “through the exercise of ordinary intelligence” by confirming same on the public website which contained the information for the taxes in question. Plaintiffs cannot now establish that they were induced to enter into the transaction by misrepresentation (Duane Thomas LLC v. 62 Thomas Partners, LLC, 300 AD2d 52; Eisenthal v. Wittlock, 198 AD2d 395). Although the plaintiffs attach an email string to their opposition papers that could be suggestive of attempted concealment upon their request that the taxes be verified by the broker, the plaintiffs were made aware of the full amount of the taxes prior to the closing and knowingly proceeded with the transaction. In particular, the plaintiffs were made aware of the discrepancy when their attorney received the title report prior to closing and on the closing disclosure prepared by the plaintiffs' lending institution on the date of closing.
Moreover, the individual defendants, Shameer Fazal, Marco Gomez and Craig Kaplan did not assume personal responsibility or liability for the transaction. The dealings the plaintiffs may have had with the individual defendants cannot rise to the level of individual and personal liability. Indeed, the organization of a corporation or a limited liability company for the purpose of avoiding personal liability is a well-known method employed by real estate brokerage firms throughout New York State. It is widely held that an entity, whether a corporation or limited liability company, may be organized for the very purpose of avoiding personal liability provided that the entity really exists and is doing business as permitted by law. The corporate broker, since its inception, is an active entity duly organized under the laws of the State of New York. The listing contract between the property owner and the corporate broker dated April 22, 2017 and the Agency Disclosure Form signed by the plaintiffs on July 15, 2017 identify both the listing agent and the selling agent respectively as agents with office of the corporate broker. The Deal Sheet and the Contract of Sale identify the corporate broker as the listing broker and procuring cause of the sale and not the individual defendants.
Since there is no showing in the complaint or the evidentiary submissions by plaintiffs that the individual defendants exploited their position as agents of the corporate broker to perpetuate a fraud upon the plaintiffs, no basis exists upon which to pierce the corporate veil and hold them personally liable. The courts will not perfunctorily pierce the corporate veil to reach a shareholder or representative (Total Care Health Industries v. Dept. of Social Services 144 AD2d 678, 679). There is no evidence to indicate that the individual defendants were transacting any personal business on behalf of the corporate broker when marketing and/or selling the property. The real estate brokerage commission earned by the corporate broker was paid by the property owner to the corporate broker directly and not to any of the individual defendants. Any compensation paid to the individual defendants as licensees of the corporate broker was paid directly by the corporate broker, not the property owner nor by the plaintiffs. The individual defendants cannot be held personally liable merely due to the fact that, while acting as a licensee of the corporate broker, they had conversations, or exchanged e-mail correspondence with the plaintiffs. There is also no evidence that the individual defendants intended to be personally bound despite acting as an agent for the corporate defendant (see JDF Readty v. Sartiano, 93 AD3d 410).
This action involved an ordinary business relationship between the seller and the purchaser of property. The contract of sale was negotiated at arm's length and all of the parties, including the plaintiffs, were represented by counsel. The corporate broker acted as the agent of the seller as confirmed by the plaintiffs when they signed the Agency Disclosure Statement. The complaint fails to plead a special relationship existing between the plaintiffs and the corporate broker. The moving defendants have provided the court with a full production of documents to support their position that the putative cause of action is without merit. The plaintiffs as the purchasers in the transaction did not have any fiduciary relationship with the corporate broker or its agents and were aware of the full amount of the taxes prior to the closing.
The plaintiffs' remaining arguments alleging fraud (CPLR 3016[b] ) and consumer fraud (GBL §§ 349 and 350) are also without sufficient basis. (Friedler, 44 AD3d at 612 [no liability under the General Business Law where action complained of was not consumer oriented and did not result in plaintiff's alleged damages] ).
Accordingly, motion by the defendants for an order pursuant to CPLR 3211 (a) (1) and 3211 (a) (7) dismissing the complaint against defendants Shameer Fazal, Marco Gomez and Craig Kaplan and pursuant to CPLR 3212 for summary judgment dismissing the complaint against defendant Keller Williams Landmark II is granted and the complaint dismissed.
All proceedings under Index No. 606054/18 are terminated.
This decision is the order of the court.
Jeffrey S. Brown, J.
Response sent, thank you
Docket No: 606054/18
Decided: October 16, 2018
Court: Supreme Court, Nassau County, New York.
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