On December 4, 2014, the First Department issued a decision in MAFG Art Fund, LLC v. Gagosian, 2014 NY Slip Op. 08499, affirming the dismissal of a fraud claim.
In MAFG Art Fund, the First Department affirmed the dismissal of a claim for fraud in connection with the sale of artwork, explaining:
The amended complaint alleges that defendants misrepresented the value of certain works of art and that the values were supported by market data, when they were not. As to the latter, the complaint fails to state a cause of action for fraud because plaintiffs did not allege justifiable reliance. As a matter of law, these sophisticated plaintiffs cannot demonstrate reasonable reliance because they conducted no due diligence; for example, they did not ask defendants, “Show us your market data.” As to the claim that defendants misrepresented the value of certain art works, statements about the value of art constitute nonactionable opinion that provides no basis for a fraud claim.
(Internal quotations and citations omitted) (emphasis added).