Summary
In Regal Limousine, Inc. v. Allison Limousine Serv., Ltd., 136 A.D.2d 534, 523 N.Y.S.2d 154 (2d Dep't 1988), the court denied a motion for summary judgment where the contract and underlying obligation were "intertwined."
Summary of this case from RMM Records & Video Corp. v. Universal Music & Video Distribution Co. (In re RMM Records & Video Corp.)Opinion
January 11, 1988
Appeal from the Supreme Court, Suffolk County (Gerard, J.).
Ordered that the order is affirmed, with costs.
The court correctly denied Allison's motion for summary judgment. Although generally breach of a related contract cannot defeat a motion for summary judgment on a promissory note, where, as here, the contract and underlying obligation are intertwined, the motion must be denied (see, Fopeco, Inc. v General Coatings Technologies, 107 A.D.2d 609).
The customer list referred to in the parties' agreement for the sale of Allison's limousine business formed an integral part of the proffered consideration, and, as such, allegations of fraudulent misrepresentations regarding its nature preclude summary judgment, despite the presence of disclaimers and merger clauses within the agreement (see, Hobart v Schuler, 55 N.Y.2d 1023; Sabo v Delman, 3 N.Y.2d 155). To bar a court from entertaining allegations of fraud in the inducement due to the presence of a merger clause is to permit the perpetration of the fraud without allowing the opportunity for redress to the victim (Sabo v Delman, supra, at 161).
Finally, a joint trial of the two actions was properly ordered in light of common issues of fact. Bracken, J.P., Kunzeman, Eiber and Harwood, JJ., concur.