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Keywords

contractplaintiffdefendantdamages
plaintiffdefendantdamagesrescission

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Haberman v. Greenspan, 82 Misc.2d 263, 368 N.Y.S.2d 717

Facts

The plaintiffs, Donald and Rita Ericksen, and Philip and Lenora Haberman, sought damages after purchasing a duplex at 34-36 Fieldway Avenue, Staten Island, New York. They claimed that the defendants breached the contracts of sale by constructing a foundation that violated the Building Code and was inadequate to support the structure. The defendants were aware of the foundation's issues when cracks appeared and attempted to conceal these defects by erecting plasterboards in the basements.

In these two real property actions tried jointly by the Court, plaintiffs, Donald P. Ericksen and his wife, Rita Ericksen, and plaintiffs, Philip Haberman and his wife, Lenora Haberman, originally sought rescission in connection with their purchase of a duplex, 34—36 Fieldway Avenue, Staten Island, New York. Subsequently they withdrew their claims for rescission but continued their suits for damages.

Issue

Did the defendants commit fraud by actively concealing material facts regarding the foundation's construction from the purchasers?

Did the defendants commit fraud by actively concealing material facts regarding the foundation's construction from the purchasers?

Rule

Nondisclosure of facts does not constitute fraud unless there is active concealment of facts, which can mislead the other party and vitiate a contract.

The rule that nondisclosure of facts normally does not constitute fraud, does not apply where there is an active concealment of facts; and such concealment is a fraud.

Analysis

The court determined that the defendants engaged in active concealment by covering up the cracks in the foundation with plasterboards, thereby misleading the plaintiffs about the structural integrity of the duplex. The evidence showed that the defendants were aware of the foundation's inadequacies and took steps to hide these issues, which constituted fraud.

The court determined that the defendants engaged in active concealment by covering up the cracks in the foundation with plasterboards, thereby misleading the plaintiffs about the structural integrity of the duplex.

Conclusion

The court held in favor of the plaintiffs, awarding them damages for the cost of repairing the foundation, concluding that the defendants' actions amounted to fraud.

Judgment in accordance with opinion.

Who won?

The plaintiffs prevailed in the case because the court found that the defendants had committed fraud by actively concealing material facts about the duplex's foundation.

The court held in favor of the plaintiffs, awarding them damages for the cost of repairing the foundation, concluding that the defendants' actions amounted to fraud.

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