Opinion
Argued April 29, 1983
Decided June 7, 1983
Appeal from the Appellate Division of the Supreme Court in the Third Judicial Department, ROGER J. MINER, J.
Francis X. Tucker for appellant. Peter L. Rupert for respondent.
Order affirmed, with costs, for the reasons stated in the memorandum at the Appellate Division ( 87 A.D.2d 935).
Concur: Judges JASEN, JONES, WACHTLER and SIMONS. Judge MEYER dissents and votes to reverse in an opinion in which Chief Judge COOKE concurs.
Reliance by the majority here and by the Appellate Division upon Dorsey Prods. Corp. v United States Rubber Co. ( 21 A.D.2d 866, 867, affd 16 N.Y.2d 925) is misplaced for several reasons. First, the negligent representation was that the bank's policy, which was sent to Edwards on November 13, 1978 and approved by him, would be thereafter transferred to cover him, whereas in fact it was canceled by the bank on November 15, 1978. That transaction with Edwards took place more than a month after the contract and mortgage were signed and, therefore, unlike the warranty disclaimed in Dorsey, which preceded the distributorship agreement there involved, is not barred by the merger clause in the contract. The fact that the postcontract representation had its genesis in a luncheon conversation prior to the contract closing is immaterial, for it was the postcontract events which gave rise to the obligation to transfer.
Second, the insurance obligation undertaken by Edwards was to "keep the buildings on the premises insured against loss by fire for the benefit of the mortgagee; that he will assign and deliver the policies to the mortgagee; and that he will reimburse the mortgagee for any premiums paid for insurance made by the mortgagee". There is no inconsistency between that provision and the subsequent agreement by the bank's officer to cause the policy, after approval by Edwards, to be transferred to cover Edwards and the bank and, consequently, no violation of the contract provision against oral change of the contract. Cases such as Nassau Trust Co. v Montrose Concrete Prods. Corp. ( 56 N.Y.2d 175) and Imperator Realty Co. v Tull ( 228 N.Y. 447) establish that if it is proven that the bank agreed to waive Edwards' obtaining a policy of insurance, it could not take advantage of his default in doing so, induced by its consent. That being so it is difficult to see why the bank should not be held for its negligent failure to transfer the policy, that failure having resulted in Edwards sustaining an uninsured fire loss.
The moving papers raise factual issues sufficient, if proved, to establish a claim under White v Guarente ( 43 N.Y.2d 356, 363) for negligent misrepresentation, and nothing in either the contract or mortgage bars that claim. The order of the Appellate Division should, therefore, be reversed and the counterclaim should be reinstated.
Order affirmed, etc.