On November 2, 2022, the Second Department issued a decision in Feldman v. Byrne, 2022 NY Slip Op. 06113, holding that a negligent misrepresentation claim failed for lack of allegations of a special relationship between the parties, explaining:
In order for the plaintiffs to recover on a cause of action sounding in negligent misrepresentation, they must demonstrate the existence of (1) a special or privity-like relationship imposing a duty on the defendant to impart correct information to the plaintiff; (2) that the information was incorrect; and (3) reasonable reliance on the information. A duty to speak with care exists when the relationship of the parties, arising out of contract or otherwise, is such that in morals and good conscience the one has the right to rely upon the other for information. Liability for negligent misrepresentation has been imposed only on those persons who possess unique or specialized expertise, or who are in a special position of confidence and trust with the injured party such that reliance on the negligent misrepresentation is justified.
Here, contrary to the plaintiffs’ contention, the Supreme Court did not err in its determination that the complaint failed to state a cause of action to recover damages for negligent misrepresentation. Generally, a special relationship does not arise out of an ordinary arm’s length business transaction between two parties. A conventional business relationship, without more, is insufficient to create a fiduciary relationship. Rather, a plaintiff must make a showing of special circumstances that could have transformed the parties’ business relationship to a fiduciary one, such as control by one party of the other for the good of the other.
Here, the allegations in the complaint do not support an inference that a special relationship was created or existed between Feldman and Byrne prior to the opening of Instar. Accordingly, the Supreme Court properly granted that branch of the defendants’ motion which was pursuant to CPLR 3211(a)(7) to dismiss the cause of action alleging negligent misrepresentation.
(Internal quotations and citations omitted).