Negligent Misrepresentation Claim Fails When Alleged Special Relationship Arises as Part of Transaction in Which Misrepresentation Was Made

On December 8, 2022, the First Department issued a decision in 100 & 130 Biscayne, LLC v. EE NWT OM, LLC, 2022 NY Slip Op. 06985, holding that the special relationship upon which a negligent misrepresentation claim is based must exist before the alleged misrepresentation is made, explaining:

The cause of action for negligent misrepresentation also fails to survive the motion to dismiss because the complaint does not allege a special relationship of trust and confidence among the parties. The building project here constitutes an arm’s length business transaction, which precludes a claim that the parties had a relationship of trust and confidence. In addition, a cause of action for negligent misrepresentation requires that the special relationship between the parties exist before the relevant transaction, not as a result of it.

(Internal citations omitted).

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