Commercial Division Blog
Posted: February 12, 2018 / Categories Commercial, Fraud/Misrepresentation
No Claim for Civil Conspiracy Without An Underlying Tort
On February 7, 2018, the Second Department issued a decision in McSpedon v. Levine, 2018 NY Slip Op. 00826, affirming the dismissal of a civil conspiracy to defraud claim because there was no underlying fraud, explaining:
New York does not recognize civil conspiracy to commit a tort as an independent cause of action. However, a plaintiff may plead the existence of a conspiracy in order to connect the actions of the individual defendants with an actionable, underlying tort, and establish that those actions were part of a common scheme. Under New York law, in order to properly plead a cause of action to recover damages for civil conspiracy, the plaintiff must allege a cognizable tort, coupled with an agreement between the conspirators regarding the tort, and an overt action in furtherance of the agreement. Here, since the underlying tort of fraud was properly dismissed, the cause of action alleging civil conspiracy to commit fraud was also properly dismissed, since it stands or falls with the underlying tort.
(Internal citations omitted).
Commercial litigation frequently involves fraud-based claims. And sometimes, the fraud involves more than one person working together to perpetrate the fraud. However, as this decision shows, in New York, there can be no claim for a conspiracy to defraud without a claim that an actual fraud occurred. Contact Schlam Stone & Dolan partner John Lundin at email@example.com if you or a client have a question regarding a fraud-based claim.