SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
1116
CA 12-00380
PRESENT: FAHEY, J.P., PERADOTTO, CARNI, WHALEN, AND MARTOCHE, JJ.
STEPHEN ALIKES AND JANET ALIKES,
PLAINTIFFS-APPELLANTS,
V MEMORANDUM AND ORDER
ANDREW GRIFFITH, DOING BUSINESS AS ANDY GRIFFITH
REALTOR, RE/MAX PROPERTIES AND SHARI A. REALS,
DEFENDANTS-RESPONDENTS.
CHAMBERLAIN D’AMANDA OPPENHEIMER & GREENFIELD LLP, ROCHESTER (J.
MICHAEL WOOD OF COUNSEL), FOR PLAINTIFFS-APPELLANTS.
HISCOCK & BARCLAY, LLP, ROCHESTER (PAUL A. SANDERS OF COUNSEL), FOR
DEFENDANTS-RESPONDENTS.
Appeal from an order of the Supreme Court, Ontario County
(Frederick G. Reed, A.J.), entered November 23, 2011. The order
granted the motion of defendants for summary judgment dismissing the
second amended complaint.
It is hereby ORDERED that the order so appealed from is
unanimously affirmed without costs.
Memorandum: Plaintiffs commenced this action against defendant
Shari A. Reals, their former real estate agent, and defendants Andrew
Griffith, doing business as Andy Griffith Realtor (Griffith), and
Re/Max Properties (Re/Max) seeking damages for, inter alia,
defendants’ alleged failure to procure a buyer for plaintiffs’
residential property. In their second amended complaint, plaintiffs
asserted causes of action for breach of contract, negligent hiring and
supervision, fraud and breach of fiduciary duty, and they sought,
inter alia, compensatory and punitive damages. Defendants moved for
summary judgment dismissing the second amended complaint. Supreme
Court properly granted the motion.
On December 29, 2006, plaintiff Stephen Alikes, a retired
attorney who had practiced law for over 45 years, and his wife,
plaintiff Janet Alikes, a retired paralegal specializing in real
estate law and a former licensed real estate broker, entered into an
“Exclusive Right to Sell” listing agreement for the sale of their New
York home (house) with Al Co Properties (Al Co). Reals, who was
associated with Al Co at that time, was the real estate agent
responsible for listing plaintiffs’ property. According to
plaintiffs, in late January or February 2007, Reals verbally informed
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CA 12-00380
them that prospective buyers “were going to make an offer” to purchase
the house. Plaintiffs allege that, as a result of those
representations, they decided to buy a home in Arkansas and to move
there, which they did in February 2007. In her deposition, Janet
Alikes admitted that plaintiffs did not receive an “enforceable” or
written purchase offer for the house before they bought the home in
Arkansas and moved there.
In March 2007, Reals left Al Co and then became associated with
Griffith and Re/Max. Reals allegedly brought plaintiffs’ listing with
her to Re/Max, and then presented plaintiffs with a written purchase
offer for the house that same month. Plaintiffs issued a counteroffer
and were informed by Reals that the buyers had conditionally accepted
their counteroffer. It was subsequently determined, after a
disciplinary proceeding brought against Reals by the New York State
Department of State, Division of Licensing Services, that Reals had
fabricated the purchase offer and a home inspection report.
Plaintiffs subsequently commenced this action.
Contrary to plaintiffs’ contention, we conclude that the court
properly granted that part of defendants’ motion with respect to the
cause of action for fraud. “To establish a prima facie case for
fraud, plaintiffs would have to prove that (1) defendant[s] made a
representation as to a material fact; (2) such representation was
false; (3) defendant[s] intended to deceive plaintiff[s]; (4)
plaintiff[s] believed and justifiably relied upon the statement and
[were] induced by it to engage in a certain course of conduct; and (5)
as a result of such reliance plaintiff[s] sustained pecuniary loss”
(Ross v Louise Wise Servs., Inc., 8 NY3d 478, 488 [internal quotation
marks omitted]). Here, plaintiffs were sophisticated parties who
admittedly knew that a real estate purchase contract must be in
writing in order for it to be binding and enforceable (see General
Obligations Law § 5-703 [2]). Thus, we agree with defendants that
plaintiffs could not justifiably rely on the verbal statements of
Reals that the alleged prospective buyers were “going to make an
offer” (see Ventur Group, LLC v Finnerty, 68 AD3d 638, 639). Indeed,
plaintiffs’ alleged reliance upon the oral statements of Reals was
unreasonable as a matter of law (see Friedler v Palyompis, 44 AD3d
611, 612). Moreover, even assuming, arguendo, that plaintiffs’
alleged reliance on Reals’ statements was justified, we conclude that
those statements amounted to “speculation and expressions of hope for
the future” that are not “actionable representations of fact” (Albert
Apt. Corp. v Corbo Co., 182 AD2d 500, 501, lv denied 80 NY2d 924). We
also conclude that plaintiffs did not in fact sustain damages as a
result of those statements or as a result of the fabricated purchase
offer.
We reject plaintiffs’ further contention that the court erred in
granting those parts of defendants’ motion with respect to the breach
of fiduciary duty, breach of contract and negligent hiring and
supervision causes of action. An essential element of each of those
causes of action is that a plaintiff has sustained damages that are
proximately caused by the alleged misconduct (see JP Morgan Chase v
J.H. Elec. of N.Y., Inc., 69 AD3d 802, 803; Davidovici v Fritzson, 49
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CA 12-00380
AD3d 488, 489-490; R.M. Newell Co., Inc. v Rice, 236 AD2d 843, 844, lv
denied 90 NY2d 807). Here, plaintiffs allege that they sustained
damages as a result of having to pay “carrying costs” associated with
simultaneously owning and maintaining two homes. Based on the
undisputed facts of this case, however, there is no causal
relationship between the alleged misconduct under any of the causes of
action and any damages sustained by plaintiffs (see Gall v Summit,
Rovins & Feldesman, 222 AD2d 225, 226, lv denied 88 NY2d 919). In any
event, we note that such consequential damages are not ordinarily
recoverable in actions arising from the breach of a real estate
purchase contract (see Di Scipio v Sullivan, 30 AD3d 677, 678; Tator v
Salem, 81 AD2d 727, 728).
Finally, in light of our determination that the second amended
complaint must be dismissed, there is no need to address plaintiffs’
contentions that they are entitled to punitive damages and an award of
attorneys’ fees.
Entered: December 21, 2012 Frances E. Cafarell
Clerk of the Court