Case ID: misc2d_110/html/0578-01.html
Source: Caselaw Access Project
Author: {"author": "Lawrence E. Kahn, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Harold Eisenbarth, Plaintiff, v Shearson Loeb Rhoades, Inc., et al., Defendants.
    Supreme Court, Sullivan County,
    August 25, 1981
    APPEARANCES OF COUNSEL
    
      Stroock & Stroock & Lavan (Burton N. Lipshie of counsel), for defendants. John S. McBride for plaintiff.
   OPINION OF THE COURT

Lawrence E. Kahn, J.

The defendants move for an order dismissing the complaint for failure to state a cause of action, and the plaintiff cross-moves for summary-judgment.

The complaint alleges that the plaintiff maintained an account with the defendants for the purpose of buying and selling stocks, and that on January 30, 1979, the defendants delivered a statement to the plaintiff’s wife that a stock sale transaction had taken place in the plaintiff’s account, indicating that 400 shares of IBM stock had been sold on behalf of the plaintiff with a net worth of $124,433.38. The statement was a mistake since the plaintiff never owned, purchased or sold any IBM stock. Four days later the plaintiff received the defendants’ correction statement. Plaintiff alleges that as a result of the negligent communication he sustained great mental anguish, and that his wife began to have suspicions about his financial condition resulting in the destruction of his marriage.

In certain instances, the law recognizes a cause of action for mental suffering inflicted as the result of a negligent communication (Johnson v State of New York, 37 NY2d 378). However, there is no cause of action for mental distress induced by damage to one’s property (Van Patten v Buyce, 37 AD2d 448, mot for lv to app den 30 NY2d 481; see, also, Stahli v McGlynn, 47 AD2d 238). Furthermore, there is no cause of action for mental suffering resulting from the negligent breach of a contract (Levin v Halston Ltd., Div. of Halston Enterprises, 91 Misc 2d 601, 602; Zamzok v 650 Park Ave. Corp., 80 Misc 2d 573). Here, the claim is that the plaintiff and the defendants had a contractual relationship with respect to the handling of plaintiff’s stocks and that the defendants negligently performed a duty pursuant to that agreement by sending him an incorrect statement concerning a stock transfer. At worst, this notice could only have caused plaintiff concern for injury to his property. That concern was of four days’ duration. This is not a case where, in reliance upon a negligent communication, the plaintiff has acted and incurred out-of-pocket expense (McGerald v Mobil Serv. Center, 106 Misc 2d 133). The complaint here fails to state a cognizable claim.

The motion of the defendants for an order dismissing the complaint for failure to state a cause of action shall be granted, and the cross motion of the plaintiff for summary judgment shall be denied.