Summary Judgment Denied Due To Issues Of Fact Concerning Reliance/Statements About Financing

Posted: November 19, 2025 / Written by: Joshua Wurtzel, Jeffrey M. Eilender, Thomas A. Kissane, Channing J. Turner, Samuel L. Butt / Categories Fraud/Misrepresentation, Fraudulent Inducement, Fiduciary Duties, Leave to Amend, Summary Judgment

Summary Judgment Denied Due To Issues Of Fact Concerning Reliance/Statements About Financing

On October 3, 2025, Justice Melissa A. Crane found that questions of fact concerning the parties’ statements, understandings and intent required denial of defendants’ motion for summary judgment on fraud-based claims. The case is Chan v. Havemeyer Holdings LLC, Index No. 652359/2022.

Plaintiffs alleged that defendants had induced them to invest by falsely stating that a $230 million financing was “already done.” Slip op. 2, 3. Defendants moved for summary judgment as to plaintiffs’ claims of fraud, breach of fiduciary duty, fraudulent concealment and negligent misrepresentation, arguing that plaintiffs were provided with multiple writings showing that the financing had not occurred and understood that their investments were necessary to complete it. Justice Crane denied the motion. As to fraud and negligent misrepresentation:

The parties' intent is a fact-laden inquiry and is inappropriate for determination on summary judgment (see National Union Fire Ins. Co. of Pittsburg, Pa. v Robert Christopher Assocs., 257 AD2d 1, 6 [1st Dept 1999]). Taken as a whole, the parties' testimony and written communications indicate that "[m]aterial issues of fact exist as to whether plaintiffs were innocent parties who were 'duped' by defendants ... " (Stuart v. Tomasino, 148 AD2d 370, 373 [1st Dept 1989]).

Further, New York courts have repeatedly held that a court can determine reasonable reliance at the summary judgment stage under only rare circumstances (see Norddeutsche Landesbank Girozentrale v Titan, 178 AD3d 539, 539 [1st Dept 2019], as "[t]he question of what constitutes reasonable reliance is always nettlesome because it is so fact-intensive" (DDJ Mgt., LLC v Rhone Group L.L.C., 15 NY3d 147, 155 [2010] [citations omitted]).

Slip op. 10.

Summary judgment was denied as to the claims involving breach of fiduciary duty due to fact questions as to whether defendants misled plaintiffs “about the status, terms and return profile of a refinancing, and [by] concealing material information regarding the defendants' purported actual motive for seeking the investment funds.” Id. 13. Plaintiffs’ claim for rescission was subject to dismissal for failure to join a party to the subject agreement, but their cross-motion to amend to cure that omission was granted “because defendants will not be unduly prejudiced, the newly added defendant is not unfairly surprised, and the amendment is not palpably without merit.” Id. 14.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning summary judgment or claims related to fraud or breach or fiduciary duty.