Summary
noting that plaintiffs' failed to establish loss causation because plaintiffs suffered losses as a direct result of "negative press reports about defendants," and not as a direct result of defendants' alleged misrepresentations
Summary of this case from Minzer v. BargaOpinion
2013-03-19
GREENTECH RESEARCH LLC, et al., Plaintiffs–Appellants, v. Barrett WISSMAN, Defendant, Clark Hunt, et al., Defendants–Respondents.
Gusrae Kaplan Nusbaum PLLC, New York (Alison B. Cohen of counsel), for appellants. McKool Smith, P.C., Dallas, TX (Garret W. Chambers of the bar of the State of Texas, admitted pro hac vice, and Kyle A. Lonergan, New York, of counsel), for respondents.
Gusrae Kaplan Nusbaum PLLC, New York (Alison B. Cohen of counsel), for appellants. McKool Smith, P.C., Dallas, TX (Garret W. Chambers of the bar of the State of Texas, admitted pro hac vice, and Kyle A. Lonergan, New York, of counsel), for respondents.
, J.P., FRIEDMAN, DeGRASSE, FREEDMAN, ABDUS–SALAAM, JJ.
Judgment, Supreme Court, New York County (O. Peter Sherwood, J.), entered October 18, 2011, dismissing the complaint as against defendants Clark Hunt and Hunt Financial Ventures, L.P. (HFV), unanimously affirmed, with costs.
The court properly dismissed the fraud claim for failure to plead fraud with the particularity required by CPLR 3016(b) and for failure to plead loss causation ( see Laub v. Faessel, 297 A.D.2d 28, 31, 745 N.Y.S.2d 534 [1st Dept. 2002] ). As the motion court noted, and as plaintiffs fail to refute on appeal, their losses were directly caused by the negative press reports about defendants, not by Hunt's and HFV's alleged misrepresentations and omissions.
The court properly dismissed the negligent misrepresentation claim for failure to plead a special relationship. An arm's length business relationship, as existed here, is not generally considered to be the sort of confidential or fiduciary relationship that would support a cause of action for negligent misrepresentation ( see Silvers v. State of New York, 68 A.D.3d 668, 669, 893 N.Y.S.2d 12 [1st Dept. 2009], lv. denied15 N.Y.3d 705, 2010 WL 3396879 [2010] ). Nor did Hunt or HFV “possess unique or specialized expertise” ( Kimmell v. Schaefer, 89 N.Y.2d 257, 263, 652 N.Y.S.2d 715, 675 N.E.2d 450 [1996] ) in raising capital from investors. Indeed, the complaint alleges that plaintiff Hilary J. Kramer (the controlling person of plaintiff Greentech Research LLC) is an experienced financial analyst and money manager. Further, Hunt's and HFV's alleged superior knowledge of their alleged wrongdoing and defendant Barrett Wissman's admitted wrongdoing is not the type of unique or specialized expertise that would support a cause of action for negligent misrepresentation ( see generally Dobroshi v. Bank of Am., N.A., 65 A.D.3d 882, 884, 886 N.Y.S.2d 106 [1st Dept. 2009], lv. dismissed14 N.Y.3d 785, 899 N.Y.S.2d 117, 925 N.E.2d 919 [2010] ).
Because Hunt and HFV did not have “superior knowledge of essential facts” ( P.T. Bank Cent. Asia, N.Y. Branch v. ABN AMRO Bank N.V., 301 A.D.2d 373, 378, 754 N.Y.S.2d 245 [1st Dept. 2003] [internal quotation marks omitted] ), the court properly dismissed that part of plaintiffs' fraud claim that was based on Hunt's and HFV's alleged omissions ( see Dembeck v. 220 Cent. Park S., LLC, 33 A.D.3d 491, 492, 823 N.Y.S.2d 45 [1st Dept. 2006] ).
The court providently exercised its discretion in denying plaintiffs' request for leave to replead ( see Eighth Ave. Garage Corp. v. H.K.L. Realty Corp., 60 A.D.3d 404, 405, 875 N.Y.S.2d 8 [1st Dept. 2009], lv. dismissed12 N.Y.3d 880, 883 N.Y.S.2d 174, 910 N.E.2d 1003 [2009] ), given the absence of an affidavit of merits and evidentiary proof to support their request ( cf. Zaid Theatre Corp. v. Sona Realty Co., 18 A.D.3d 352, 355, 797 N.Y.S.2d 434 [1st Dept. 2005] ).
Even though plaintiffs' fraud and negligent misrepresentation claims were properly dismissed, they can still bring a new action based on breach of contract ( see 175 E. 74th Corp. v. Hartford Acc. & Indem. Co., 51 N.Y.2d 585, 590 n. 1, 435 N.Y.S.2d 584, 416 N.E.2d 584 [1980] ).