Does Fraud Invalidate Consent in the Context of a Trespass Claim?
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G THE B IN EN V C R H E S A N 8 8 D 8 B 1 AR SINCE WWW. NYLJ.COM VOLUME 262—NO. 44 FRIDAY, AUGUST 30, 2019 Outside Counsel Expert Analysis Does Fraud Invalidate Consent In the Context of a Trespass Claim? nder New York law, What happens, however, trespass is an “inten- By when an alleged trespasser Scott tional entry onto Watnik enters another’s property the land of another with the property owner’s without justification consent, but that consent is Uor permission.” Woodhull v. induced by fraudulent acts Town of Riverhead, 46 A.D.3d denial of a motion to dismiss of someone other than the 802, 804 (2d Dep’t 2007). Thus, a trespass claim where “it was alleged trespasser? Until the as a matter of law, where a undisputed that defendants New York Supreme Court’s property owner consents to a gained entry to plaintiff’s pri- recent decision in the case of party entering his property, a vate medical office by having Morgan Home Builders v. Mahy trespass claim cannot be main- (New York Sup. Ct., New York tained. See, e.g., SHLP Assocs. Cty., Index No. 656461/2018) in What happens, however, when v. State of N.Y., 262 A.D.2d 548, an alleged trespasser enters an- which I represented the defen- 549 (2d Dep’t 1999). However, other’s property with the prop- dant and alleged trespasser, when the property owner’s erty owner’s consent, but that Creative Media Marketing (Cre- consent is induced through consent is induced by fraudulent ative), no New York court had fraud committed by the alleged acts of someone other than the ever squarely addressed the trespasser, under New York law alleged trespasser? question. the property owner’s consent is a reporter pose as a potential The Alleged Facts rendered invalid. For instance, patient using a false identity in the seminal case of Shiffman and bogus insurance card.” In Mahy, the plaintiff, proper- v. Empire Blue Cross and Blue Id. The First Department held ty owner Morgan Home Build- Shield, 256 A.D.2d 131 (1st that these undisputed facts ers (Morgan) filed a complaint Dep’t 1998), the First Depart- “defeated defendants’ affirma- alleging that it “permitted” Cre- ment affirmed the trial court’s tive defense based on consent ative to “occupy” its property and implied consent to enter pursuant to a license. Morgan SCOTT WATNIK is a partner at Wilk Auslander. the premises … .” Id. further alleged that it consent- FRIDAY, AUGUST 30, 2019 ed to the license in reliance on ing the question, Creative do not follow §892(b) of the fraudulent misrepresentations argued that courts in other Restatement, and instead hold made by two other defendants jurisdictions addressing the that a property owner’s con- that “fees paid in connection issue have often turned to the sent for another to enter its with the license” would be paid rubric set forth in §892(b) of property stands as a matter to Morgan. Morgan alleged that the Restatement of Torts for of law even when the alleged it never received any such fees guidance. Section 892(b) sets trespasser uses fraud to gain because the other defendants forth a general rule that “con- entry to the property on false diverted the fees from Morgan sent to conduct of another is pretenses. For instance, in the for their own benefit. Seek- effective for all consequences case of Desnick v. ABC, 44 F.3d ing to recover the diverted of the conduct and for the inva- 1345, 1351 (7th Cir. 1995), the license fee, Morgan brought a sion of any interests resulting Seventh Circuit affirmed dis- variety of claims against the from it.” Restatement (Second) missal of the plaintiff’s trespass other defendants, including for of Torts §892B (1979) (October claim where certain persons fraud and breaches of contract 2018 Update). This rule, how- falsely posed as “test patients” and fiduciary duties, but just ever, is subject to the narrow in order to induce the plaintiff one claim against Creative for exception that if the consent is property owner into permitting trespass. procured by: (1) a “substantial them to access a medical treat- mistake” that is “known to the ment center to write a news Creative’s Legal Arguments other” or (2) “a misrepresen- story about poor medical prac- For Dismissal tation made … by the actor,” tices at the center. In affirming Creative filed a motion to dis- then the consent is invalid. dismissal, the Seventh Circuit miss the complaint pursuant Id. As the Ninth Circuit, citing observed: to CPLR 3211(a)(7) for failing Prosser and Keeton on the Law The fact is that consent to state a cause of action for of Torts, put it in the case of to an entry is often given trespass. In support of the dis- Tbeofel v. Farey-Jones, 359 F.3d legal effect even though the missal motion, Creative argued 1066 (9th Cir. 2009), “an overt entrant has intentions that if that Morgan’s admission in its manifestation of assent or will- known to the owner of the complaint that it “permitted” ingness [of consent] would not property would cause him for Creative to “occupy” its prop- be effective … if the defendant perfectly understandable or erty ordinarily required dis- knew, or probably if he ought generally ethical or at least missal of the trespass claim as to have known in the exercise lawful reasons to revoke his a matter of law; the only issue of reasonable care, that the consent. for the court to determine plaintiff was mistaken as to Similarly, in American Trans- was whether the other defen- the nature and quality of the mission v. Channel 7 of Detroit, dants’ alleged fraud vitiated invasion intended.” 239 Mich. App. 695 (2000), Morgan’s admitted consent. Additionally, in support of Michigan’s Court of Appeals In the absence of any New its dismissal motion, Creative held that a trespass claim York case law directly address- pointed out that some courts should be dismissed where FRIDAY, AUGUST 30, 2019 even though the defendant The Court’s Ruling should take the Mahy decision “misrepresented her pur- under advisement and be vigi- pose” in entering the plaintiff’s On June 28, 2019 the New lant when it comes to relying land, the “plaintiff’s consent York Supreme Court, New on brokers, agents and other was stil valid because she York County (Hon. Melissa third parties in issuing licenses did not invade any of the A. Crane) granted Creative’s and leases permitting others specific interests relating to motion to dismiss the com- to enter their land. the peaceable possession of plaint, and entered an order land that the tort of trespass dismissing the trespass claim seeks to protect.” Likewise, in against Creative for all the Martin v. Fidelity & Casuality reasons Creative argued in its Co., 421 So.2d 109 (Ala. 1982) dismissal motion. The court’s Alabama’s Supreme Court held dismissal order gave the plain- that “an action for trespass tiff a 20-day deadline to try to … will not lie unless plain- “fix” the complaint by adding tiff’s possession was intruded allegations that Creative knew upon by defendant without his that the plaintiff’s consent to consent, even though consent enter its property was induced may have been given under a by fraud. This deadline passed mistake of facts, or procured without the plaintiff attempting by fraud … .” to re-plead. Creative argued, and the New Conclusion York Supreme Court agreed, that the import of the above The court’s ruling in Mahy legal principles with respect to makes clear that under New Morgan’s trespass claim could York law, when a property own- not be clearer: At a minimum, er’s consent to enter his or her Morgan’s admitted consent property is induced by fraud for Creative to occupy its which the alleged trespasser property is valid and requires did not partake in or have any dismissal of its trespass claim reason to know about, no tres- in the absence of any allega- pass claim will lie. This com- tions that Creative knew or had mon sense holding enables reason to know that such con- persons who innocently enter sent was procured by fraud. another’s property with the Because Morgan’s complaint property owner’s permission was devoid of any such allega- to rely on the permission he Reprinted with permission from the August 30, 2018 edition of the NEW tions, its trespass claim had to or she received. New York YORK LAW JOURNAL © 2019 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited. For information, be dismissed. property owners, however, contact 877-257-3382 or [email protected]. # NYLJ-08302019-414150-WILK.