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National Conversion Corp. v. Cedar Bldg. Corp.

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Brief Fact Summary.

Plaintiff entered into a five-year lease with defendant under the belief that the property was located in an unrestricted zone. In actuality, plaintiff’s use of the property was in violation of the zoning ordinances.

Synopsis of Rule of Law.

Plaintiff entered into a five-year lease with defendant under the belief that the property was located in an unrestricted zone. In actuality, plaintiff’s use of the property was in violation of the zoning ordinances.

Points of Law - Legal Principles in this Case for Law Students.

Since, once again, there are affirmed findings of fact, and it is peculiarly within the discretion of the trial court to assess the qualifications of experts and the persuasiveness of testimony as to estimates and evaluations, these items of damage should not be disturbed.

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Facts.

National Conversion Corporation (“National Conversation”) (plaintiff) wanted to use the property to convert restaurant garbage into fertilizer. The corporation entered into a five-year lease with Cedar Building Corporation (“Cedar Building”) (defendant) under the belief that the leased property was located in an unrestricted zone. National Conversation was falsely reassured that its use of the property would not be in violation of the zoning ordinance. The City of New York filed violations against National Conversion and its enterprise was terminated. National Conversion sued Cedar Building for fraud and breach of warranty.

Issue.

Whether a statement intended and understood as a representation of fact, as opposed to an opinion of law, may base an action in tort for misrepresentation?

Held.

Yes, Cedar Building’s statements are actionable for misrepresentation. Cedar Building falsely represented as a fact that they knew the property was located in an unrestricted zone. The order of the Appellate Division is affirmed.

Discussion.

A pure opinion of law may not base an action in tort. However, mixed statements of fact as to what the law is may base an action in tort. Here, Cedar Building represented as a fact they actually knew the leased property was located in an unrestricted zone. While the misrepresentations of the zoning ordinances were contained in the description, map, and requirements, these are not themselves legal opinions. Cedar Building is therefore liable for its inducement of National Conversion.


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