Chun Hye Kang-Kim v. Feldman

In an action to recover damages for breach of contract and fraud, the plaintiff appeals from so much of an order of the Supreme Court, Queens County (Lerner, J.), dated June 20, 1985, as granted the defendant Mordechay Feldman’s motion for summary judgment dismissing the complaint as against him, and granted the defendant Lawrence G. Wasserman’s renewed cross motion for summary judgment dismissing the second cause of action of the complaint as against him.

Order affirmed insofar as appealed from, with one bill of costs.

Where the language of a contract is clear and unambiguous, the intent of the parties must be determined in accordance with that language (see, e.g., Breed v Insurance Co., 46 NY2d 351, 355). In this case, the parties’ contract clearly and unambiguously provided that the defendant Feldman would not be liable for any part of the tax liability as a result of the recapture of depreciation pursuant to the Internal Revenue Code (see, 26 USC § 1245), incurred after the date of the sale by Feldman to the plaintiff of the stock of 84-21 Enterprises, Inc., a corporation which owned a luncheonette. The contract *591provided that Feldman, as the seller, would assume payment of "all of the Corporation’s obligations of any kind or nature, due and owing and/or accruing prior to the date of * * * adjustments”. With respect to taxes, the contract expressly stated that Feldman agreed to indemnify the plaintiff "from the payment of any of the corporation’s obligations incurred by it prior to the adjustment date”. The tax liability involved herein was incurred months after the closing and the adjustment date, when the plaintiff sold the corporate assets to a third party.

Furthermore, the only paragraph in the contract which could have implied such a liability on the part of Feldman was deleted by the parties. Thus, Feldman’s alleged failure to pay his "proportionate share” of this postclosing tax liability did not constitute a breach of contract, and Trial Term properly granted his motion for summary judgment.

The fact that an alleged subsequent oral statement by the defendant Wasserman, an accountant and a nonparty to the contract, suggested that the parties’ intention was to provide for such proportionate liability is irrelevant in view of the contract’s integration clause and its clear and unambiguous language (see, UCC 2-202; Marine Midland Bank-Southern v Thurlow, 53 NY2d 381, 387). Similarly, the fact that the plaintiff and her attorneys may have misunderstood the plain meaning of the terms of the contract is also irrelevant (see, Goodison v Goodison, 66 AD2d 923, 924, affd 48 NY2d 786).

The plaintiffs claim that the defendant Wasserman falsely represented to her that Feldman intended to pay his proportionate share of the tax liability on recaptured depreciation fails to state a cause of action. In order to state a cause of action in actual fraud, the plaintiff would have had to have alleged that Wasserman made this representation with the knowledge that the defendant Feldman, in fact, had no such intention (see, Lanzi v Brooks, 54 AD2d 1057, 1058, affd 43 NY2d 778, mot to amend remittitur granted 43 NY2d 947; Grossberg v Grossberg, 104 AD2d 439, 440; Mills Studio v Chenango Val. Realty Corp., 15 AD2d 138; Searoon Manor Operating Corp. v W. P. & L. Realty Corp., 136 Misc 910). In this case, there is no allegation that the defendant Wasserman knew that Feldman never intended to pay his proportionate share of taxes due to recapture of depreciation at the time he allegedly made such representation, and the record in no way indicates that he had such knowledge. Thus, no cause of action for actual fraud has been stated against him.

Moreover, the doctrine of constructive fraud has no bearing *592upon the facts of this case. It is true that Wasserman was the accountant for the corporation, the shares of which the plaintiff had purchased, and thus stood in a fiduciary relationship with her. However, his alleged false representation did not concern a matter of accounting strategy, method or practice in which his special knowledge and expertise put bim in a superior position to the plaintiff. Consequently, the doctrine of constructive fraud is inapplicable (see, Brown v Lockwood, 76 AD2d 721, 733-734). Rubin, Lawrence and Spatt, JJ., concur.