         SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department
803
CA 11-00333
PRESENT: SCUDDER, P.J., SMITH, CARNI, SCONIERS, AND GREEN, JJ.


NIAGARA FOODS, INC., BENLEY REALTY CO. AND
THE CHARTER OAK FIRE INSURANCE COMPANY,
PLAINTIFFS-APPELLANTS-RESPONDENTS,

                    V                              MEMORANDUM AND ORDER

FERGUSON ELECTRIC SERVICE COMPANY, INC. AND TEGG
CORPORATION, DEFENDANTS-RESPONDENTS-APPELLANTS.


LAW OFFICES OF ROBERT A. STUTMAN, P.C., NEW YORK CITY (KEVIN P. SMITH
OF COUNSEL), AND BRANDT, ROBERSON & BRANDT, P.C., LOCKPORT, FOR
PLAINTIFFS-APPELLANTS-RESPONDENTS.

RUPP, BAASE, PFALZGRAF, CUNNINGHAM & COPPOLA LLC, BUFFALO (R. ANTHONY
RUPP, III, OF COUNSEL), FOR DEFENDANT-RESPONDENT-APPELLANT FERGUSON
ELECTRIC SERVICE COMPANY, INC.

WALSH, ROBERTS & GRACE, BUFFALO (MARK P. DELLA POSTA OF COUNSEL), FOR
DEFENDANT-RESPONDENT-APPELLANT TEGG CORPORATION.


     Appeal and cross appeals from an amended order of the Supreme
Court, Niagara County (Ralph A. Boniello, III, J.), entered July 27,
2010. The amended order, among other things, granted in part
defendants’ motions to dismiss.

     It is hereby ORDERED that the amended order so appealed from is
unanimously modified on the law by granting that part of the motion of
defendant Ferguson Electric Service Company, Inc. to dismiss the
breach of contract cause of action asserted against it by plaintiff
Benley Realty Co. and as modified the amended order is affirmed
without costs.

     Memorandum: In this action to recover damages sustained as the
result of a fire, plaintiffs appeal and defendants each cross-appeal
from an amended order that, inter alia, granted in part defendants’
respective motions to dismiss the first amended complaint. Addressing
first plaintiffs’ appeal, we conclude that Supreme Court properly
granted those parts of the motions to dismiss the causes of action for
fraud and negligent misrepresentation.

     With respect to that part of the fraud cause of action against
defendant Tegg Corporation (Tegg), plaintiffs relied upon an e-mail
from Tegg that merely constituted a promise for future action, which
is insufficient to support that cause of action against Tegg (see
                                 -2-                           803
                                                         CA 11-00333

Transit Mgt., LLC v Watson Indus., Inc., 23 AD3d 1152, 1155; Cerabono
v Price, 7 AD3d 479, 480, lv dismissed 3 NY3d 737, lv denied 4 NY3d
704). With respect to that part of the fraud cause of action against
defendant Ferguson Electric Service Company, Inc. (Ferguson), we note
that it is well settled that “[a] cause of action premised upon fraud
cannot lie where it is based on the same allegations as [a] breach of
contract [cause of action]” (Heffez v L & G Gen. Constr., Inc., 56
AD3d 526, 527). Nevertheless, where the alleged fraudulent
representation is collateral to the contract, i.e., it is a fraudulent
representation regarding present fact as opposed to one reflecting an
intent to perform, the fraud and breach of contract causes of action
simultaneously may be maintained (see Deerfield Communications Corp. v
Chesebrough-Ponds, Inc., 68 NY2d 954, 956; McKernin v Fanny Farmer
Candy Shops, 176 AD2d 233, 234). Here, the fraud and breach of
contract causes of action with respect to Ferguson are based upon the
same allegations inasmuch as both rely upon the May 3, 2004 agreement
between Ferguson and plaintiff Niagara Foods, Inc. (Niagara Foods).
Moreover, the documents attached to the first amended complaint
establish that Ferguson made no false representation of present fact.
With respect to the negligent misrepresentation cause of action, no
special relationship other than an ordinary business relationship is
asserted in the first amended complaint with respect to either Tegg or
Ferguson. Thus, the court properly granted those parts of defendants’
motions dismissing that cause of action against them (see Fleet Bank v
Pine Knoll Corp., 290 AD2d 792, 795-796; H & R Project Assoc. v City
of Syracuse, 289 AD2d 967, 969; Cecos Intl. v Advanced Polymer
Sciences, 245 AD2d 1017).

     With respect to defendants’ cross appeals, we reject their
contention that the court erred in denying those parts of their
motions to dismiss the strict products liability cause of action.
Plaintiffs properly pleaded a cause of action for strict products
liability (see Van Iderstine v Lane Pipe Corp., 89 AD2d 459, 460-461,
lv dismissed 58 NY2d 610, 1113), and the court was correct that, at
this stage of the litigation, there is an issue of fact whether
defendants provided a service, a product, or a combination thereof.
We agree with Ferguson, however, that the court erred in denying that
part of its motion to dismiss the breach of contract cause of action
asserted by plaintiff Benley Realty Co. (Benley) against it inasmuch
as Benley did not enter into a contract with Ferguson (see Mandarin
Trading Ltd. v Wildenstein, 16 NY3d 173, 181-182). Nor has Benley
established that it was a third-party beneficiary of the contract
between Ferguson and Niagara Foods or that any benefit it received
from that contract was sufficiently immediate to establish the
assumption of a duty by Ferguson to compensate Benley in the event
that the benefit was lost (see id. at 182). We therefore modify the
amended order accordingly.




Entered:   July 1, 2011                        Patricia L. Morgan
                                               Clerk of the Court
