Summary
holding that deletion of reference in prospectus to possibility that additional assessment might be required indicated active concealment that imposed a duty to disclose information truthfully
Summary of this case from Banks v. Consumer Home Mortgage, Inc.Opinion
May 7, 1998
Appeal from the Supreme Court (Keniry, J.).
In December 1992, plaintiffs purchased the residence of defendants Robert J. Jensen and Patricia D. Jensen (hereinafter collectively referred to as defendants) located in Rivercrest Development in the Town of Clifton Park, Saratoga County. Prior to the sale, defendants provided plaintiffs with written material indicating that the property was serviced by "Town water and sewer", that $502.75 of the annual taxes for the property were allocated to the "Rivercrest Sewer District" and that the property's total taxes were significantly less than an equivalent home in a neighboring town. Less than one month after the closing on the property, plaintiffs received a bill representing a "special assessment" on the property for the operation and maintenance of the sewer system. This separate assessment was limited to the 17 residents in the Rivercrest Development. There is evidence in the record that defendants initially intended to disclose to potential purchasers that the sewer system servicing the property was in the process of being connected to another system and that an additional assessment was likely, but subsequently deleted this information from the written material describing the house.
Plaintiffs commenced this action to rescind the contract or, in the alternative, to recover damages for defendants' alleged fraudulent misrepresentations concerning the true status of the sewer system servicing the property. Prior to completion of discovery, defendants moved for summary judgment which was denied by Supreme Court. Defendants appeal.
On the particular facts of this case, and in light of the procedural status of the action, we affirm. The doctrine of caveat emptor imposes no duty upon a vendor to disclose any information concerning the property in an arm's length real estate transaction (see, e.g., London v. Courduff, 141 A.D.2d 803, 804, lv dismissed 73 N.Y.2d 809). If, however, some conduct (i.e., more than mere silence) on the part of the seller rises to the level of "active concealment" (Slavin v. Hamm, 210 A.D.2d 831, 832; see, Stambovsky v. Ackley, 169 A.D.2d 254, 257), a seller may have a duty to disclose information concerning the property. Here, plaintiffs allege specific conduct on the part of defendants, not just their failure to speak, which deceived them.
Defendants, on the other hand, persuasively counter that they did not conceal anything from plaintiffs that could not have been readily discovered by inquiry from municipal authorities. We have recently held, however, that "whether a party could have ascertained the facts with reasonable diligence is a factual question for resolution by the jury" (Rudolph v. Turecek, 240 A.D.2d 935, 938, lv denied 90 N.Y.2d 811; see, Casey v. Masullo Bros. Bldrs., 218 A.D.2d 907; Todd v. Pearl Woods, 20 A.D.2d 911, affd 15 N.Y.2d 817). Given the outstanding discovery in this case, we feel constrained to find that Supreme Court properly denied defendants' motion for summary judgment since questions of fact exist concerning whether defendants made material representations which induced plaintiffs to purchase the property and whether a reasonable inquiry by plaintiffs would have revealed the sewer system special assessment (see, Casey v. Masullo Bros. Bldrs., supra; Hauser v. Lista, 201 A.D.2d 873, 874-875; Dygert v. Leonard, 138 A.D.2d 793, 795).
Mercure, J.P., White, Peters and Spain, JJ., concur.
Ordered that the order is affirmed, with costs.