Opinion
588 CA 19-00122
08-22-2019
Peter MITCHELL and Parker's Grille, Inc., Plaintiffs–Appellants, v. CITY OF GENEVA and City of Geneva Industrial Development Agency, Defendants–Respondents.
PETER J. CRAIG & ASSOCIATES, P.C., PITTSFORD (PETER J. CRAIG OF COUNSEL), FOR PLAINTIFFS–APPELLANTS. HARRIS BEACH PLLC, PITTSFORD (AARON FRAZIER OF COUNSEL), FOR DEFENDANTS–RESPONDENTS.
PETER J. CRAIG & ASSOCIATES, P.C., PITTSFORD (PETER J. CRAIG OF COUNSEL), FOR PLAINTIFFS–APPELLANTS.
HARRIS BEACH PLLC, PITTSFORD (AARON FRAZIER OF COUNSEL), FOR DEFENDANTS–RESPONDENTS.
PRESENT: WHALEN, P.J., SMITH, CARNI, NEMOYER, AND CURRAN, JJ.
MEMORANDUM AND ORDER It is hereby ORDERED that the final order and judgment so appealed from is unanimously affirmed without costs.
Memorandum: Plaintiff Peter Mitchell operates plaintiff Parker's Grille, Inc. (Parker's Grille), a restaurant in Geneva, New York. This action arises from defendants' grant of public funds to the owner of a nearby building for the purposes of refurbishing the building and opening a restaurant in it. In their complaint, plaintiffs alleged that defendants' support of the competing business caused them lost profits and diminished the value of Parker's Grille, and they asserted causes of action for de facto appropriation/inverse condemnation, misrepresentation, and tortious interference with business relations. Defendants moved to dismiss the complaint for failure to state a cause of action pursuant to CPLR 3211(a)(7) or, in the alternative, to convert the motion to one for summary judgment dismissing the complaint pursuant to CPLR 3212. Plaintiffs opposed the motion and cross-moved for leave to amend the complaint. Supreme Court denied plaintiffs' cross motion for leave to amend the complaint, granted defendants' motion to dismiss the complaint pursuant to CPLR 3211(a)(7) and, in the alternative, granted defendants summary judgment dismissing the complaint pursuant to CPLR 3212. We affirm. Contrary to plaintiffs' contention, the complaint fails to state a cause of action for de facto appropriation or inverse condemnation because it does not allege a physical invasion or restraint on the use of plaintiffs' property (see City of Buffalo v. Clement Co. , 28 N.Y.2d 241, 253, 321 N.Y.S.2d 345, 269 N.E.2d 895 [1971], rearg. denied 29 N.Y.2d 640, 324 N.Y.S.2d 462, 273 N.E.2d 315 [1971] ; Fisher v. City of Syracuse , 46 A.D.2d 216, 217, 361 N.Y.S.2d 773 [4th Dept. 1974], lv denied 36 N.Y.2d 642, 368 N.Y.S.2d 1025, 329 N.E.2d 676 [1975], cert. denied 423 U.S. 833, 96 S.Ct. 57, 46 L.Ed.2d 51 [1975] ; cf. Corsello v. Verizon N.Y., Inc. , 18 N.Y.3d 777, 783–786, 944 N.Y.S.2d 732, 967 N.E.2d 1177 [2012], rearg. denied 19 N.Y.3d 937, 950 N.Y.S.2d 91, 973 N.E.2d 187 [2012] ).
Plaintiffs likewise failed to state a cause of action for misrepresentation. As limited by their brief on appeal, plaintiffs contend that they stated a claim for negligent misrepresentation. The complaint alleges conduct arising from defendants' use and designation of public funds and thus concerns the governmental, rather than proprietary, function of defendants (see generally Applewhite v. Accuhealth, Inc. , 21 N.Y.3d 420, 425, 972 N.Y.S.2d 169, 995 N.E.2d 131 [2013] ). "In a negligence-based claim against a municipality, a plaintiff must allege that a special duty existed between the municipality and the plaintiff" ( Kirchner v. County of Niagara , 107 A.D.3d 1620, 1623, 969 N.Y.S.2d 277 [4th Dept. 2013] ). There are three ways in which a special duty may be formed: "(1) the plaintiff belonged to a class for whose benefit a statute was enacted; (2) the government entity voluntarily assumed a duty to the plaintiff beyond what was owed to the public generally; or (3) the municipality took positive control of a known and dangerous safety condition" ( Applewhite , 21 N.Y.3d at 426, 972 N.Y.S.2d 169, 995 N.E.2d 131 ; see McLean v. City of New York , 12 N.Y.3d 194, 199, 878 N.Y.S.2d 238, 905 N.E.2d 1167 [2009] ). Here, plaintiffs' complaint fails to allege the existence of any special duty, and therefore their cause of action for negligent misrepresentation was properly dismissed (see Spring v. County of Monroe , 151 A.D.3d 1694, 1696, 57 N.Y.S.3d 799 [4th Dept. 2017] ).
Plaintiffs likewise failed to state a cause of action for tortious interference with business relations, misdescribed in the complaint as tortious interference with business operations, because plaintiffs failed to allege that defendants acted " ‘with the sole purpose of harming the plaintiff[s] or by using unlawful means’ " ( Zetes v. Stephens , 108 A.D.3d 1014, 1020, 969 N.Y.S.2d 298 [4th Dept. 2013] ; see also Carvel Corp. v. Noonan , 3 N.Y.3d 182, 190, 785 N.Y.S.2d 359, 818 N.E.2d 1100 [2004] ). Moreover, plaintiffs failed to allege that defendants' allegedly tortious conduct was directed "at the party with which the plaintiff[s] ha[ve] or seek[ ] to have a relationship" ( Carvel Corp. , 3 N.Y.3d at 192, 785 N.Y.S.2d 359, 818 N.E.2d 1100 ).
The court also properly denied plaintiffs' cross motion seeking leave to amend the complaint to allege a special duty and to correct the misdescribed tortious interference cause of action. Plaintiffs' proposed amendment with respect to a special duty does not adequately allege the existence of such a duty, as required for the misrepresentation claim, and neither proposed amendment states a cause of action (see generally Matter of DeCarr v. Zoning Bd. of Appeals for Town of Verona , 154 A.D.3d 1311, 1314, 62 N.Y.S.3d 244 [4th Dept. 2017] ; Pink v. Ricci , 100 A.D.3d 1446, 1448–1449, 954 N.Y.S.2d 306 [4th Dept. 2012] ; J.K. Tobin Constr. Co., Inc. v. David J. Hardy Constr. Co., Inc. , 64 A.D.3d 1206, 1209, 883 N.Y.S.2d 681 [4th Dept. 2009] ).
In light of our determination that the court properly dismissed plaintiffs' complaint pursuant to CPLR 3211(a)(7), we do not address whether the court properly converted the motion to dismiss into a motion for summary judgment pursuant to CPLR 3211(c) or whether the court properly granted summary judgment pursuant to CPLR 3212.