Blogs

Posts Categorized: Fraud/Misrepresentation

Posted: May 26, 2014

Merger Clause Prevents Fraud Claim Based on Alleged Pre-Contract Promises

On May 16, 2014, Justice Kornreich of the New York County Commercial Division issued a decision in Antares Real Estate Services III, LLC v. 100 WP Property–DOF II, LLC, 2014 NY Slip Op. 31312(U), dismissing claims regarding alleged pre-contract promises based on a contract’s merger clause. In Antares Real Estate Services III, the plaintiff sued... Read more »

Posted: May 20, 2014

Fraudulent Inducement Claim Not Duplicative When Based on Misrepresentations of Present Facts Collateral to Contract

On May 13, 2014, the First Department issued a decision in Shugrue v. Stahl, 2014 NY Slip Op. 03460, holding that a fraudulent inducement claim was not duplicative of a breach of contract claim. In Shugrue, the First Department reversed the trial court’s dismissal of a fraudulent inducement claim, explaining: Plaintiffs’ fraudulent inducement claim was... Read more »

Posted: May 18, 2014

Reports Can Be Basis for Fraud Claim Despite Disclaimers When Facts Peculiarly within Defendant’s Knowledge

On May 13, 2014, the First Department issued a decision in Forty Central Park South, Inc. v. Anza, 2014 NY Slip Op. 03453, holding that disclaimers in performance reports that induced the plaintiffs to make further investments did not immunize the defendant from a fraud claim. In Forty Central Park South, the trial court granted... Read more »

Posted: May 3, 2014

No Fraud Without Justifiable Reliance on Alleged Misrepresentation

On May 1, 2014, the First Department issued a decision in Mosaic Caribe, Ltd. v. AllSettled Group, Inc., 2014 NY Slip Op. 03024, dismissing a fraud claim because the alleged reliance was not justifiable. In Mosaic Caribe, the First Department affirmed the denial of the plaintiff’s motion to amend. Among the issues the First Department addressed... Read more »

Posted: February 24, 2014

First Department Rules That Disgorgement May Be Available As An Equitable Remedy For Attorney General Claims Under Martin Act and Executive Law

On February 20, 2014, the First Department issued a decision in People v. Ernst & Young, LLP, 2014 NY Slip Op. 01257, reversing New York County Commercial Division Justice Jeffrey K. Oing’s dismissal of the New York Attorney General’s claims under the Martin Act and New York’s Executive Law for disgorgement of profits earned by... Read more »

Posted: January 2, 2014

Decision Explores the Distinction Between Transaction Causation and Loss Causation

On December 24, 2013, Justice Kornreich of the New York County Commercial Division issued a decision in Loreley Fin. (Jersey) No. 4 Ltd. v. UBS Ltd., 2013 NY Slip Op. 33262(U), explaining the distinction between transaction causation and loss causation. In Loreley Fin., the court decided a motion for reconsideration of a decision dismissing a complaint... Read more »

Posted: December 6, 2013

No Negligent Misrepresentation Claim From Arm’s Length Transaction Between Sophisticated Parties

On November 26, 2013, the First Department issued a decision in Zohar CDO 2003-1 Ltd. v. Xinhua Sports & Entertainment Ltd., 2013 N.Y. Slip Op. 07860, affirming a decision finding that there was no “special relationship” between the parties in an arm’s length commercial transaction. In Zohar, the trial court dismissed a negligent misrepresentation claim,... Read more »

Posted: December 2, 2013

IRS Audit Put Taxpayer on Inquiry Notice of Possible Fraud Claim Against Tax Advisor

On November 19, 2013, Justice Friedman of the New York County Commercial Division issued a decision in Chlsea, LLC v. Gramercy Fin. Servs., LLC, 2013 NY Slip Op. 32946(U), dismissing fraud and related tort claims on statute of limitations grounds because the plaintiff was on inquiry notice. In Chlsea, the plaintiff made a tax shelter... Read more »

Posted: November 5, 2013

Courts Continue to Wrestle with Standard for Reasonable Reliance in Commercial Contexts

On October 31, 2013, Justice Ramos of the New York County Commercial Division issued a decision in Moshe v. Charles Rutenberg LLC, 2013 NY Slip Op. 51813(U), denying the defendant’s summary judgment motion for dismissal of a fraudulent inducement cross-claim. The cross-claim defendant had argued that the reasonable reliance element of the fraud cross-claim had not... Read more »

Posted: October 20, 2013

Assignees of Purchaser of Residential Mortgage-Backed Securities Lack Standing to Sue and Assignor Failed to Adequately Plead Fraud Damages

On October 16, 2013, Justice Bransten of the New York County Commercial Division issued a decision in Dexia SA/NV v. Morgan Stanley, 2013 N.Y. Slip Op. 51696(U), dismissing on the pleadings causes of action sounding in common-law fraud brought against the underwriters and sponsors of residential mortgage-backed securities (“RMBS”) by both the entity that purchased... Read more »