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Court of Appeals Limits Negligent Misrepresentation Claims
In Sykes v. RFD Third Avenue 1 Associates, LLC, NYLJ 10/20/10, p. 28, col. 5, the Court of Appeals answered a question of considerable importance to home purchasers, and particularly to condominium purchasers: When does a purchaser have a claim against a party with whom the purchaser has never dealt when that party made a negligent misrepresentation on which the purchaser relied? In Sykes, the Court of Appeals, relying on dicta in past cases, held that a purchaser cannot prevail on such a claim unless the party making the representation was aware of the precise identify of the parties who would rely on that representation.
The Sykes Facts
In Sykes, the condominium offering plan included descriptions of the building's HVAC system, saying that it was capable of maintaining specified indoor temperatures in hot and cold weather. Condominium purchasers, dissatisfied with the building's HVAC system, brought an action against the engineering firm that designed the system, contending that statements made in the offering plan were false, attributable to the engineering firm, and negligently made. Moreover, purchasers contended that they had bought in reliance on these statements.
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