The following papers were read on this motion: Notice of Motion (Seq. 004), Affirmation, Affidavit, Exhibits and Memorandum of Law in Support 1 Notice of Cross-Motion (Seq. 005), Affidavit and Affirmation in Support 2 Plaintiff’s Affidavit, Exhibits and Memorandum of Law in Opposition to Motion and Cross-Motion 3 Reply Affirmation, Affidavit, Exhibits and Memorandum of Law (Seq. 004) 4 Reply Affirmation, Affidavit and Exhibits (Seq. 005) 5 Upon the foregoing papers, the motion by defendants Richard Mohring (hereinafter “Mohring”) and 44 Sea Cliff Avenue Corp. (incorrectly named herein as “44 Sea Cliff Avenue LLC”)(hereinafter “44 Sea Cliff”) which seeks an order pursuant to CPLR §3212 granting Mohring and 44 Sea Cliff summary judgment; and the cross-motion of defendants Harry Bienenfeld (hereinafter “Bienenfeld”) and HRY LLC (hereinafter “HRY”) which seeks an order pursuant to CPLR §3212 granting Bienenfeld and HRY summary judgment, are determined as hereinafter provided. Factual and Procedural Background The within action arises from the purchase by plaintiffs of a one-family home located in Glen Head, New York, from defendant HRY. Plaintiffs seek damages for, inter alia, fraud and breach of covenant of good faith and fair dealing. Plaintiffs also seek recission based upon fraud. In the 1990′s, Donald J. Sutherland was the owner of a single parcel of land in Glen Head, New York, which was improved with an existing single family home built in the 1920s. Sutherland obtained a subdivision approval in 1999 to create a four (4) lot subdivision from the single parcel (Lots 414, 416, 416, and 417), leaving the existing home on the Lot designated 417. In or about March of 2013 HRY acquired Lots 415, 416, and 417 from Sutherland for the purpose of development and resale. Bienenfeld is the principal of HRY. 44 Sea Cliff Ave. performed renovations of the existing home located on what had become Lot 417, to prepare it for resale. Mohring is the principal of 44 Sea Cliff Ave. On February 28, 2014, plaintiff entered into a contract with defendant HRY for the purchase of Lot 417 and the existing home located thereon, originally built in 1929. The parties closed title to the subject property on May 8, 2014. Plaintiffs allege that between January 2014 and May 2014, each defendant repeatedly reassured plaintiffs that the subject property had been renovated and improved in accordance with state and local municipal laws; that the renovation and improvements have been performed within prevailing building standards and the utmost care; and that the subject property conformed with the requirements of all municipal laws. Plaintiffs allege that upon each defendant’s failure to perform certain punch list items required under the contract the plaintiffs began to investigate the veracity of the defendants’ representations. Upon investigation, plaintiffs allege that they determined that each defendant violated a multitude of municipal laws in performing their renovations, including, inter alia, making structural alterations to the premises without obtaining the proper municipal approvals. Plaintiffs contend that each defendant, in an effort to cover up their malfeasance, employed a widespread series of tactics to prevent plaintiffs from discovering the latent defects prior to the closing of title. Plaintiffs allege that defendants made affirmative factual misrepresentations and omissions of material facts with the intent to deceive plaintiffs. Plaintiffs base their causes of action for fraud, recission upon fraud and breach of the covenant of good faith and fair dealing, on all of defendant’s alleged affirmative actions as delineated in plaintiffs’ complaint. Each cause of action in plaintiffs’ complaint is alleged as against all defendants and it is also alleged that the individual defendants Mohring and Bienenfeld are members of both 44 Sea Cliff and HRY. Plaintiffs claim that HRY and 44 Sea Cliff are jointly owned and are jointly responsible and liable to plaintiffs. Each of the defendants had previously moved to dismiss plaintiffs’ complaint pursuant to CPLR §3211[a][1] and [7] and for summary judgment pursuant to CPLR §3212. The motions were decided by Order dated May 23, 2017 (Parga, J.), with the motions to dismiss being denied, and the motions for summary judgment being denied with leave to renew upon completion of discovery. In 2016, plaintiffs filed a second suit in this Court, under Index No. 606973/2016, against the same defendants, but also adding Renwood Associates Inc. alleging, inter alia, that defendants Mohring, 44 Sea Cliff, Bienenfeld, HRY and Renwood are jointly owned and controlled and are alter egos of each other, that they jointly conspired to defraud the Heids in violation of the Debtor and Creditor Law by selling the neighboring and abutting (vacant) Lot 416 to Renwood for less than fair consideration with the intent to render HRY insolvent and unable to pay an eventual judgment in this action, and that excavations on Lot 416 deprived plaintiffs’ lot 417 of lateral support. Plaintiffs filed a Lis Pendens in the 2016 Action. All defendants in the 2016 Action moved to dismiss pursuant to CPLR §3211[a][7] and for summary judgment pursuant to CPLR §3212. Plaintiffs cross-moved to consolidate the 2016 Action with this action. By Order dated May 23, 2017 (Parga, J.), this Court granted the defendants’ respective motions to dismiss and for summary judgment, and ordered the cancellation of the Lis Pendens. Plaintiffs took an appeal, and the Court’s May 23, 2017 has recently been affirmed by the Appellate Division, Second Department, by Decision and Order issued June 3, 2020. The crux of defendants’ argument in support of summary judgment is that plaintiffs purchased the subject 1929 house from defendant HRY, already renovated by 44 Sea Cliff, pursuant to a contract that expressly provided that the sale of the property was being sold in “AS IS” condition; that plaintiffs chose not to have a home inspection performed prior to executing the contract to purchase from HRY; that the contract expressly provided that plaintiffs relied on no representations other than those set forth in the contract; and that upon closing and accepting the deed from the seller, any claims plaintiffs might have had arising from the contract were extinguished by the doctrine of merger. The Contract of Sale The defendants rely on the contract of sale executed between HRY, as seller, and plaintiffs, as purchasers. The printed form portion of the contract1, provides, in pertinent part: 12. Condition of Property. Purchaser acknowledges and represents that Purchaser is fully aware of the physical condition and state of repair of the Premises and of all other property included in this sale, based on Purchaser’s own inspection and investigation thereof and that Purchaser is entering into this contract based solely upon such inspection and investigation and not upon any information, data, statements or representations, written or oral, as to the physical conditions, state of repair, use, cost of operation or any other matter related to the Premises or the other property included in the sale, given or made by Seller or its representatives, and shall accept the same “as is” in their present condition and state of repairs, subject to reasonable use, wear, tear and natural deterioration between the date hereof and the date of Closing (except as otherwise set forth in paragraph 16(e), without any reduction in the purchase price or claim of any kind for any change in such condition by reason thereof subsequent to the date of this contract. Purchaser and its authorized representatives shall have the right, at reasonable times and upon reasonable notice (by telephone or otherwise) to Seller, to inspect the Premises before Closing. [Emphasis added] … 16. Conditions to Closing. This contract and Purchaser’s obligation to purchase the Premises are also subject to and conditioned upon the fulfillment of the following conditions precedent: (a) The accuracy, as of the date of Closing, of the representations and warranties of Seller made in this contract. (b) The delivery by Seller to Purchaser of a valid and subsisting Certificate of Occupancy or other required certificate of compliance, or evidence that none was required, covering the building(s) and all of the other improvements located on the property authorizing their use as a single family dwelling at the date of Closing. … 28. Miscellaneous. (a) All prior understanding, agreements, representations and warranties, oral or written, between Seller and Purchaser are merged in this contract; it completely expresses their full agreement and has been entered into after full investigation, neither party relying upon any statement made by anyone else that is not set forth in this contact. [Emphasis added] (b) Neither this contract nor any provision thereof may be waived, changed or cancelled except in writing. The contract also included a rider, attached to the printed form, which provides additional provisions, and modifies some of the provisions of the printed form portion of the contract. The rider here provides, in pertinent part: 1. This Rider shall be deemed to be incorporated in the printed form of this Contract as though fully typed or printed therein; where there is a discrepancy between any terms of this Rider, the language of this Rider shall be deemed to prevail and supersede that in the printed contract form. … 6. The Premises are sold and conveyed subject to the following: Building and zoning regulations and ordinances of the city, town or village in which the premises lie which are not violated by existing structures; A. Such state of facts as an accurate survey may show, provided same does not render title unmarketable. B. In addition to the standard exceptions contained in an ALTA form “B” owner’s title policy, Purchaser will accept title to the Property subject to the following (the “Permitted Exceptions”): C. Any state of facts a physical inspection of the Property may reveal. … 8. Seller believes that there is on file with the municipality having jurisdiction, a certificate of occupancy and/or completion or letter or preexisting use for premises as it presently exists except for any patio cover, awning, deck, any sheds or finished basement (which will be removed, without allowance or abatement of purchase price if same is an impediment to Closing). In no event shall Seller be required to bring variance or change of zoning proceedings, if same may be necessary to secure any of said certificates or letter. In the event same cannot be obtained by Seller without bringing said proceedings, the Seller shall have the option to cancel this contract and return contract deposit to Purchaser and neither party shall have any further liability to the other. Purchaser, however, shall have the right to elect to proceed with the purchase regardless of the production of said certificates. In the event a certificate of occupancy and/or certificate of completion or letter of preexisting use for premises is not available, the Purchaser shall provide the Seller’s attorney with current survey at least ten (10) days prior to the date set forth in the contract for closing and Seller shall be given a reasonable adjournment of the closing date in order to obtain such certificate.[Emphasis added] 9. It is expressly understood that the Seller has not made and does not make any representations as to the physical condition, operation or any other matter relating to the aforesaid premises. and it is not bound by any statements, representations or information that may have been made to the Purchaser by anyone, pertaining to the premises herein unless specifically set forth herein. The Purchaser hereby acknowledges that no such representations have been made and he has personally made an inspection of the premises and is familiar with the condition of same and agrees to accept same in their present condition, “as is”, less reasonable wear and tear, except that the plumbing, heating, electrical systems, and appliances shall be in working order, and roof and basement shall he free of leaks at closing of title which representations shall not survive delivery of deed. [Emphasis added] … 17. The acceptance of the deed by Purchaser shall he deemed full performance by Seller and shall discharge Seller of all terms, conditions and agreements made or required to be performed hereunder and no liability therefor on the part of Seller shall survive the delivery of the deed unless there is a specific provision elsewhere herein declaring a survival after delivery of the deed or unless the parties agree in writing to have such item survive delivery of the deed. [Emphasis added] Also crucial here is one more provision in the printed form portion of the contract: 11. Seller’s Representations. … (c) Except as otherwise expressly set forth in this contract, none of Seller’s covenants, representations, warranties or other obligations contained in this contract shall survive Closing. Although plaintiffs acknowledge visiting and inspecting the house on several occasions both before signing the contract and before closing, plaintiffs first had the house inspected professionally three (3) months after the May 8, 2014 closing. Plaintiffs claim that this inspection, performed by Harold Krongelb, PE, of Heimer Engineering, P.C. (hereinafter “Heimer”) on August 11, 2014, revealed certain latent deficiencies. However, the report prepared by Heimer, dated September 10, 2014, and which had been offered by plaintiffs in opposition to defendants’ earlier summary judgment motions, contains information that supports defendants’ arguments. In the inspection report, Mr. Krongelb states, in part: Upon arrival at the site, we were met by Blaise Heid. Mr. Heid reported that he purchased the subject house and Closed on May 8, 2014. The house was supposed to be ‘like new’. The house was supposed to be completely renovated to be in excellent condition. Because the house was supposed to be delivered in a like new condition, Mr. Heid agreed to waive a pre-purchase home inspection. … Just prior to closing, Mr. Heid found deficiencies in the subject house…. [Emphasis added] The purpose of the [Heimer] inspection was to examine deficiencies and report on them. The inspection was conducted in all accessible and observable areas related to the deficiencies…. [Emphasis added]. Thus, it is apparent both that plaintiffs had found “deficiencies” prior to closing and that those “deficiencies” were “accessible and observable” upon inspection. Based upon the Heimer inspection, plaintiffs opine that they learned for the first time that renovation work which had been done to the house was done without necessary permits, approvals, sign-offs and issuance of certificates of occupancy from the Town of Oyster Bay. Plaintiffs cite to paragraph 36 of the Heimer inspection report, which provides: A Building Permit should have been issued by the Town of Oyster Bay Department of Buildings prior to the renovations. The following items would have required a permit: a. Removing or cutting a wall, as was done when the second floor master bedroom and master bathroom were altered. b. Altering plumbing, as was done when the second floor master bedroom and master bathroom were altered. c. Installation of the gas heating system. d. Altering a means of egress, as was done when the portico was constructed. e. The rewiring that was performed. Discussion and Ruling The law is well settled in New York, in regard to the sale of real estate: New York adheres to the doctrine of caveat emptor and imposes no liability on a seller [or the seller's agent] 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['s agent] which constitutes active concealment” of a defective condition (Simone v. Homecheck Real Estate Servs., Inc., 42 A.D.3d 518, 520, 840 N.Y.S.2d 398; see Daly v. Kochanowicz, 67 A.D.3d 78, 87, 884 N.Y.S.2d 144; cf. Real Property Law §§462, 465). Moreover, **651 even proof of active concealment will not suffice when the plaintiff should have known of the defect (see Richardson v. United Funding, Inc., 16 A.D.3d 570, 571, 792 N.Y.S.2d 511). A plaintiff seeking to recover damages for active concealment must show that the defendant “thwarted” the plaintiff’s efforts to fulfill his or her responsibilities imposed by the doctrine of caveat emptor (Kerusa Co. LLC v. W10Z/515 Real Estate Ltd. Partnership, 12 N.Y.3d 236, 245, 879 N.Y.S.2d 17, 906 N.E.2d 1049 [internal quotation marks omitted]; see Rozen v. 7 Calf Cr., LLC, 52 A.D.3d 590, 593, 860 N.Y.S.2d 155). (Laxer v. Edelman, 75 AD3d 584, 585 [2d Dept 2010]). Moreover, a cause of action alleging fraudulent inducement may not be maintained if specific disclaimer provisions in the contract of sale disavow reliance upon oral representations (see Danann Realty Corp. v. Harris, 5 N.Y.2d 317, 184 N.Y.S.2d 599, 157 N.E.2d 597; Roland v. McGraime, 22 A.D.3d 824, 825, 803 N.Y.S.2d 163; Fabozzi v. Coppa, 5 A.D.3d 722, 723-24, 774 N.Y.S.2d 555; Platzman v. Morris, 283 A.D.2d 561, 562-63, 724 N.Y.S.2d 502; Masters v. Visual Bldg. Inspections, 227 A.D.2d 597, 597-598, 643 N.Y.S.2d 599). Here, the specific provisions in the contract of sale barred the causes of action alleging fraudulent inducement. The plaintiffs expressly represented in the contract that they had not relied on any statements by the Sotheby’s defendants regarding the condition of the premises, and that representation “destroy[ed] the allegations in the complaint that the agreement was executed in reliance upon [such statements]” (Danann Realty Corp. v. Harris, 5 N.Y.2d at 320-321, 184 N.Y.S.2d 599, 157 N.E.2d 597; cf. DDJ Mgt., LLC v. Rhone Group L.L.C., 15 N.Y.3d 147, 156-157, 905 N.Y.S.2d 118, 931 N.E.2d 87). (Laxer v. Edelman, supra at 586). At bar, at paragraph “12″ of the printed form portion of the contract, and paragraph “9″ of the rider, plaintiffs expressly represented that they were not relying on any representations other than those expressly set forth in the contract. This Court holds that once title to the property had closed and the deed was delivered, ‘any claims the plaintiff might have had arising from the contract of sale were extinguished by the doctrine of merger unless there was a ‘clear intent evidenced by the parties that a particular provision of the contract of sale [would] survive the delivery of the deed’” (internal citations omitted)(Ka Foon Lo v. Curis, 29 AD3d 525, 526 [2d Dept 2006]). Here, paragraph “11″ of the printed form portion of the contract, and paragraph “9″ of the rider, provided that except as expressly set forth, none of Seller’s covenants, representations, warranties or other obligations contained in the contract shall survive Closing, and that the acceptance of the deed by plaintiffs shall he deemed full performance by Seller and shall discharge Seller of all terms, conditions and agreements made or required to be performed under the contract and no liability therefor on the part of Seller shall survive the delivery of the deed unless there is a specific provision elsewhere herein declaring a survival after delivery of the deed or unless the parties agree in writing to have such item survive delivery of the deed. Plaintiffs argue that the general rule of “caveat emptor” does not apply here, because defendants’ failure to file for permits and receive signoffs and a certificate of occupancy amounts to “active concealment.” They argue that “Plaintiffs could not have discovered these facts and they was [sic] actively concealed by defendants by their proceeding with this work without applying for and receiving a permit and a signoff from the Town.” Plaintiffs opine that “[b]y failing to file for permits and obtain signoffs, defendants actively concealed their work from the Town and plaintiffs.” The Court disagrees. Plaintiffs’ failure to investigate defendants’ representations until after closing, is not tantamount to “active concealment” by defendants. The very cases cited by plaintiffs regarding “active concealment” clearly hold that, to recover damages for active concealment in the context of a fraudulent nondisclosure, the buyer must show that the seller thwarted the buyer’s efforts to fulfill the buyer’s responsibilities fixed by the doctrine of caveat emptor (see Jablonski v. Rapalje, 14 AD3d 484, 485 [2d Dept 2005] supra; Platzman v. Morris, 283 AD2d 561, 562 [2d Dept 2001]). Here, plaintiffs make no showing that defendants thwarted them in any way in their efforts to investigate the property Plaintiffs argue that “[w]hen a seller fails to apply for building permits when required to do so by virtue of the scope and type of renovation, such failure may be proof of active concealment” citing to Simone v. Homecheck Real Estate Services, Inc., 42 AD3d 518 [2d Dept 2007]; Laxer v. Edelman, 75 AD3d 584, 585 [2d Dept 2010]; Daly v. Kochanowicz, 67 AD3d 78, 87 [2d Dept 2009]; Platzman v. Morris, 283 AD2d 561, 562 [2d Dept 2001]. None of the cases cited stand for the proposition suggested by plaintiffs. The doctrine of caveat emptor requires that a buyer act prudently to assess the fitness and value of his purchase and operates to bar the purchaser who fails to exercise due care from seeking the equitable remedy of rescission. (Rodas v. Manitaras, 159 AD2d 341 [1st Dept 1990]); see Stambovsky v. Ackley, 169 AD2d 254, 258 [1st Dept 1991]. Richardson v. United Funding, Inc., 16 AD3d 570, 571 [2d Dept 2005] is instructive. In that case, the plaintiff alleged that the seller corporation and its principal engaged in active concealment of structural defects in premises sold to the plaintiff. The trial court had denied defendants’ motion for summary judgment. The Second Department reversed, holding:. Proof of active concealment alone, however, will not support a fraud action where the vendee should have known of the defect” (George v. Lumbrazo, 184 A.D.2d 1050, 1051, 584 N.Y.S.2d 704). The doctrine of caveat emptor does not apply to conditions which the plaintiff could not have discovered with due inquiry and/or inspection (see Gartner v. Young-Hee Lowe, 299 A.D.2d 198, 749 N.Y.S.2d 134; London v. Courduff, 141 A.D.2d 803, 804, 529 N.Y.S.2d 874). When a plaintiff has the premises inspected prior to the closing, the question of whether a plaintiff could have ascertained the facts with reasonable diligence based upon inspection is generally a question of fact for the jury (see Gizzi v. Hall, 300 A.D.2d 879, 881-882, 754 N.Y.S.2d 373). Here, the plaintiff acknowledged that she did not have the house inspected prior to the closing, which established, as a matter of law, that she did not exercise reasonable diligence. The report of her structural engineer, prepared approximately six months after the closing, indicated that at least some of the defects, such as defects observable on the facade, were exposed and could have been discovered upon reasonable inspection. Accordingly, the plaintiff failed to raise a triable issue of fact which would preclude the granting of summary judgment. Here, similarly, plaintiffs chose not to have an inspection of the home either before signing the contract, or before closing. They chose to have an inspection only months after the closing. Blaise Heid also testified during his deposition that several months after closing he visited the Building Department to inquire about the renovations and permits. These are things that should have been done by plaintiffs, or their agents, either prior to signing a contract, or, even prior to closing, as part of “buyer’s responsibilities fixed by the doctrine of caveat emptor”. The Court has reviewed all the affidavits and exhibits presented in support of the motion and cross-motion for summary judgment and finds that the defendants have established their prima facie entitlement to summary judgment. In light of the express contract terms, and other evidence presented, plaintiffs have failed to raise any genuine triable issues of fact. Accordingly, the motion pursuant to CPLR §3212 made by defendants Richard Mohring and 44 Sea Cliff Avenue Corp. is hereby granted in its entirety. The cross-motion by defendants Harry Bienenfield and HRY LLC is also granted in its entirety. Any relief not expressly granted herein is denied. This constitutes the Decision and Order of the Court. Dated: September 20, 2020
