Calendar Date: May 29, 2018Before: Garry, P.J., McCarthy, Clark, Rumsey and Pritzker, JJ.__________David E. Woodin, LLC, Catskill (David E. Woodin ofcounsel), for appellant.DuCharme, Clark & Sovern, LLP, Clifton Park (John B.DuCharme of counsel), for respondent.__________Pritzker, J.Appeals (1) from an order and judgment of the Supreme Court(Fisher, J.), entered July 5, 2016 in Greene County, which, amongother things, partially denied defendant’s motion to set asidethe verdict, and (2) from a judgment of said court, enteredDecember 22, 2016 in Greene County, upon a decision of the courtwith an advisory jury in favor of plaintiff.As discussed more fully in this Court’s prior decision (121AD3d 1381 [2014]), the parties formerly practiced law together asKingsley and Towne, P.C. and formed Towneking Realty, LLC inorder to purchase the building in which their Greene County lawoffice was located (hereinafter the subject property). After theparties dissolved Kingsley and Towne, P.C. and opened their ownlaw practices, defendant remained in possession of the subjectproperty and operated his practice therein, covering the mortgagepayments and all expenses associated with the property, as wellas collecting rents, purportedly pursuant to an oral agreementbetween the parties. In 2007, defendant conveyed the subjectproperty from Towneking to himself, ultimately promptingplaintiff to commence this action for, among other things,conversion, fraud and other equitable claims. After joinder ofissue, the parties moved for summary judgment, and their motionswere denied, except insofar as Supreme Court granted plaintiff’srequest to dismiss certain affirmative defenses. This Courtaffirmed that order (121 AD3d at 1383).The action proceeded to trial and a jury was empaneled toissue a verdict on plaintiff’s causes of action for conversionand fraud, and to issue an advisory opinion for several ofplaintiff’s equitable claims (see CPLR 4212). The jury returneda verdict for plaintiff on the fraud and conversion causes ofaction, awarding him $95,000 and $24,800, respectively, butdeclined to award punitive damages. The jury also found inplaintiff’s favor on his claims in equity. As relevant here,plaintiff moved to confirm the advisory jury’s verdict on theequitable claims, and defendant opposed that motion and moved toset aside the verdict on the claims at law. In May 2016, SupremeCourt partially granted defendant’s motion by vacating the juryverdict insofar as it awarded plaintiff damages for conversionbecause that cause of action was barred by the applicable statuteof limitations. The court also granted plaintiff’s motion toconfirm the advisory jury verdict for his equitable causes ofaction and ordered an accounting. After a referee conducted anaccounting, plaintiff was awarded $79,701, plus interest, for hisclaims in equity. Defendant now appeals.Defendant first contends that the jury verdict as to thecause of action alleging fraud must be set aside as legallyinsufficient or against the weight of the evidence.Specifically, defendant claims that he did not owe plaintiff anyduty to disclose material information and that, even if therewere such a duty, plaintiff failed to demonstrate that he usedavailable, reasonable means to discover that defendant hadtransferred title of the subject property from Towneking tohimself. It is long-settled that “evidence is legallyinsufficient to support a verdict where there is simply no validline of reasoning and permissible inferences which could possiblylead rational people to the conclusion reached by the jury on thebasis of the evidence presented at trial” (Hattem v Smith, 149AD3d 1339, 1340 [2017] [internal quotation marks, brackets andcitations omitted]; see Killon v Parrotta, 28 NY3d 101, 108[2016]). “If legally sufficient evidence is found to support averdict, it may nevertheless be set aside as against the weightof the evidence if the evidence so preponderated in favor of the[defendant] that the verdict could not have been reached on anyfair interpretation of the evidence” (Longtin v Miller, 133 AD3d939, 940-941 [2015] [internal quotation marks, brackets andcitations omitted]; see Killon v Parrotta, 28 NY3d at 107-108).As relevant here, “[t]he elements of a fraud cause ofaction consist of a misrepresentation or a material omission offact which was false and known to be false by the defendant, madefor the purpose of inducing the other party to rely upon it,justifiable reliance of the other party on the misrepresentationor material omission, and injury” (Pasternack v Laboratory Corp.of Am. Holdings, 27 NY3d 817, 827 [2016] [internal quotationmarks, brackets and citations omitted]; see New York StateWorkers’ Compensation Bd. v Marsh U.S.A., Inc., 126 AD3d 1085,1088 [2015]). Where, as here, a fraud claim turns on an omissionor concealment rather than an active misrepresentation, theplaintiff must prove that the defendant owed “a duty to disclosethe material fact alleged to be omitted or concealed” (Sutton vHafner Valuation Group, Inc., 115 AD3d 1039, 1041-1042 [2014];see Krog Corp. v Vanner Group, Inc., 158 AD3d 914, 919 [2018]).Here, documents were introduced into evidence thatindicated that defendant was president of Towneking. Moreover,in his testimony at trial, defendant acknowledged signing themortgages on the subject property as president of Towneking andadmitted that he was the managing partner and that, because hehad control over the company, he transferred the subject propertyto himself. Given this evidence, there is a valid line ofreasoning and permissible inferences that could have reasonablyled the jury to conclude that defendant was the managing memberof Towneking and, thus, owed plaintiff a duty of disclosure (seeSalm v Feldstein, 20 AD3d 469, 470 [2005]; cf. Pokoik v Pokoik,115 AD3d 428, 429 [2014]).We disagree with defendant’s contention that plaintifffailed to prove justifiable reliance. The justifiable relianceelement of fraud is not satisfied where the plaintiff “has themeans available to . . . know[], by the exercise of ordinaryintelligence, the truth or the real quality of the subject of the[omission],” but fails to “make use of those means” (DDJ Mgt.,LLC v Rhone Group L.L.C., 15 NY3d 147, 153-154 [2010] [internalquotation marks and citation omitted]; see Abele Tractor & Equip.Co., Inc. v Balfour, 133 AD3d 1171, 1174 [2015]). Here, the jurywas provided with extensive correspondence between the parties,including letters from defendant to plaintiff expressingdefendant’s interest in the subject property and a subsequentletter from plaintiff to defendant wherein plaintiff indicatedthat he was unwilling to transfer ownership of the subjectproperty without the parties resolving other outstanding issuespertaining to their defunct law practice. The jury also heardtestimony from plaintiff that defendant never asserted that hewas the sole owner of the subject property, and plaintiff averredthat he did not think that defendant could transfer title of thesubject property without his consent. Also admitted intoevidence was a letter, dated approximately 10 months afterdefendant executed the deed transferring the subject property tohimself, in which plaintiff suggested that the parties sell thesubject property and rent space to defendant while he continuedto practice. Defendant testified that he did not respond to theletter. These letters and corresponding testimony suppliedlegally sufficient evidence that plaintiff justifiably relied ondefendant’s omission (see generally DDJ Mgt., LLC v Rhone GroupL.L.C., 15 NY3d at 154-155). Given this same evidence, theverdict finding that defendant committed fraud was not againstthe weight of the evidence (see Revell v Guido, 124 AD3d 1006,1012 [2015]; compare WFE Ventures, Inc. v Mills, 139 AD3d 1157,1160 [2016]).Defendant also argues that certain questions on the specialverdict sheet were “fundamentally flawed” because they askedwhether he had committed fraud or breached his fiduciary duty toplaintiff on the date title to the subject property wastransferred, rather than by failing to disclose that transfer toplaintiff thereafter. Inasmuch as defendant did not specificallyargue this issue before Supreme Court, it is unpreserved for ourreview (see Brown v Dragoon, 11 AD3d 834, 835 [2004], lv denied 4NY3d 710 [2005]; compare Piotrowski v McGuire Manor, Inc., 117AD3d 1390, 1392-1393 [2014], lv denied 118 AD3d 1368 [2014]), anddefendant’s proposed verdict sheet — which Supreme Court reviewedbut ultimately rejected — did not address this specific issue.In any event, the errors in the special verdict sheet, if any,were not so fundamental as to warrant this Court granting a newtrial (see McIntosh v City of New York, 13 AD3d 421, 422 [2004];compare Kayser v Sattar, 57 AD3d 1245, 1247-1248 [2008]). To theextent that defendant’s remaining claims are preserved for ourreview, we find them to be lacking in merit.Garry, P.J., McCarthy, Clark and Rumsey, JJ., concur.ORDERED that the order and judgment and judgment areaffirmed, with costs
