Court Determines If There Was Justifiable Reliance and Entitlement to Return of $1.9m Deposit
Kora Dille entered into a contract of sale to purchase a condominium unit for $19,000,000 from Zoelle LLC, allegedly in reliance upon extra-contractual representations made by Zoelle that the building had a doorman. In fact, the building had a doorman physically present during the daytime hours of each day, and a virtual doorman for the remaining hours that a doorman was not physically present on site. Dille, alleging that a full-time doorman was material to her decision to enter into a contract to purchase the unit, refused to close the transaction, declaring the contract null and void and seeking a return of the $1,900,000 down payment on the basis that Zoelle had misrepresented the presence of a full-time doorman.
The documentary evidence utterly refuted Dille’s allegations that she justifiably relied upon Zoells’s alleged misrepresentations regarding the building’s doorman services. The condominium’s offering plan outlined the physical doorman hours versus the virtual doorman hours, and the sale contract provides that the “Purchaser has examined or has waived the examination of . . . the offering plan, all amendments to the offering plan, the Declaration, the By-Laws and the House Rules.” The sale contract also provided that the purchaser has inspected or waived inspection of the premises, and that the seller was not bound by any representations as to the premises made by its employees or agents unless such representations were specifically made part of the contract of sale. The sale contract, in turn, did not contain any provision addressing expected doorman services.
The Court rejected Dille’s claims to the effect that Zoelle’s representatives concealed the existence of a virtual doorman during Dille’s pre-contract inspections of the premises, and that the virtual doorman service was within Zoelle’s peculiar knowledge. Due diligence by Dille would have discovered the doorman arrangement at the building, particularly given that the information was set forth in the condominium offering plan and given that under the terms of the contract, Dille bore the risk of failing to review that document. Moreover, the allegations in the complaint made no claim that Dille made a specific inquiry into the doorman services during her inspection of the premises or at any time before entering into the contract.
The motion court dismissed Dille’s remaining three causes of action —for a declaratory judgment that she was entitled to the contract deposit and any interest, a purchaser’s lien, and punitive damages — as they were founded upon the viability of the first two causes of action alleging fraud. The dismissal was affirmed on appeal.