By: Jeffrey M. Haber In Crawford v. Integrated Asset Mgt. Servs., LLC , 2025 N.Y. Slip Op. 01352 (2d Dept. Mar. 12, 2025) ( here ), the Appellate Division, Second Department reversed the denial of the defendants’ motion to dismiss the plaintiffs’ fraud-based claims, among others, involving a home improvement project in Brooklyn, N.Y., on the grounds of duplication with the plaintiff’s breach of contract claims. Crawford is notable because the Court held that the fraud damage

By: Jeffrey M. Haber In Imperium Blue Acquisition Partners, LLC v. Marathon Asset Mgt., L.P. , 2025 N.Y. Slip Op. 01317 (1st Dept. Mar. 11, 2025) ( here ), the Appellate Division, First Department was asked to consider whether, among other things, plaintiffs satisfied the justifiable reliance element of a fraud claim. As discussed below, the Court held that plaintiffs failed to do so. In Essential Home Remodeling, Inc. v. Rossin , 2025 N.Y. Slip Op. 01314 (1st Dept. Mar. 11,

By: Jeffrey M. Haber “The elements of a cause of action for fraud require a material misrepresentation of a fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by plaintiff and damages. A claim rooted in fraud must be pleaded with the requisite particularity under CPLR 3016(b).” The failure to satisfy each element will result in dismissal of the claim. As this Blog has noted in several articles, many cases involving an alleged fraud often rise

By: Jeffrey M. Haber Pre-IPO investing involves buying a stake in a company before the company makes its initial public offering of securities. Many stock promoters invite potential investors to invest in a pre-IPO offering by providing an opportunity to make high returns in a start-up enterprise on the ground floor. While investing at the pre-IPO stage can be rewarding, it involves risk for investors, including the risk of complete loss – i.e. , that the investor can lose h

By: Jeffrey M. Haber As readers of this Blog know, to recover damages for fraud, a plaintiff must allege “a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury.” The element that most often spells failure for a plaintiff is reasonable reliance – that is, reliance on

By: Jeffrey M. Haber We have written frequently about the substance and scope of general releases. In New York, “a valid release constitutes a complete bar to an action on a claim which is the subject of the release.” If “the language of a release is clear and unambiguous, the signing of a release is a ‘jural act’ binding on the parties.” For this reason, “ release should never be converted into a starting point for … litigation except under circumstances and under rules

By: Jeffrey M. Haber In New York, litigants often grapple with the appropriate limitation period to apply to breach of fiduciary claims. There is no single statute of limitations that the courts and the parties can look to. “Rather, the choice of the applicable limitations period depends on the substantive remedy that the plaintiff seeks.” “Where the remedy sought is purely monetary in nature, courts construe the suit as alleging ‘injury to property’ within the meaning of CP

By: Jeffrey M. Haber In Katsorhis v. 718 W. Beech St, LLC , 2025 N.Y. Slip Op. 00211 (1st Dept. Jan. 15, 2025) ( here ), the Appellate Division, Second Department considered a fraud claim that the lower court sustained on the grounds that defendant failed to raise an issue of fact about a fact that was not a fact in dispute. The Court also considered whether the motion court erred in denying defendants’ motion to dismiss plaintiffs’ claims alleging violations of General Busi

By: Jeffrey M. Haber CPLR 3025(b) provides, in pertinent part, that “ party may amend his or her pleading … at any time by leave of court or by stipulation of all parties.” Importantly, CPLR 3025(b) provides that “ eave shall be freely given.…” Thus, “unless the proposed amendment would unfairly prejudice or surprise the opposing party, or is palpably insufficient or patently devoid of merit,” the motion for leave to amend should be granted. Prejudice may be found where “th

By: Jeffrey M. Haber The justifiable reliance element has been described as a “fundamental precept” and a “venerable rule”. The requirement is one of the five elements of a fraud cause of action: (1) a misrepresentation or a material omission of fact; (2) which was false and known to be false by the defendant(s); (3) made for the purpose of inducing another person to rely upon it; (4) justifiable reliance of the other party on the misrepresentation or material omission; an

By: Jeffrey M. Haber In today’s article, we revisit some familiar principles concerning claims of fraudulent inducement. We will also examine the impact of a contractual exculpatory clause on the viability of a fraud claim, as well as the impact of contractual provision that negates the basis for a fraud claim. Our examination of these issues and principles is centered on MREF REIT Lender 2 LLC v. FPG Maiden Holdings LLC , 2024 N.Y. Slip Op. 06161 (1st Dept. Dec. 10, 2024) (

By: Jeffrey M. Haber In today’s Fraud Notes, we examine two cases involving claims of fraudulent inducement and fraudulent concealment. In Board of Mgrs. of 570 Broome Condominium v. Soho Broome Condos LLC , 2024 N.Y. Slip Op. 04804 (1st Dept. Oct. 3, 2024) ( here ), the Court examined a fraudulent inducement claim in connection with the purchase of a condominium unit. As discussed below, the Court held that plaintiff sufficiently alleged that defendant asserted affirmative

By: Jonathan H. Freiberger Today’s BLOG article relates to fraudulent concealment, caveat emptor and justifiable reliance when purchasing real property. As readers of this BLOG know, a “cause of action to recover damages for fraudulent misrepresentation requires a misrepresentation or a material omission of fact which was false and known to be false by defendant, made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the

By: Jeffrey M. Haber In Rabinowitz v. Clarke , 2024 N.Y. Slip Op. 04627 ( st Dept. Sept. 26, 2024) ( here ), the Appellate Division, First Department addressed legal principles and causes of action that are familiar to readers of this Blog: fraud, the particularity requirement of CPLR 3016(b), the statute of limitations applicable to fraud claims, breach of contract and the duplication doctrine. We examine Rabinowitz below. Rabinowitz arose from plaintiff providing defenda

By: Jeffrey M. Haber Often, in the pre-action investigation of a client’s claims, it becomes evident that discovery would materially aid the client in framing his/her complaint or in learning the identities of the persons against whom the complaint should be brought. Obtaining pre-action discovery from the court, however, is not easy. As discussed below, the plaintiff must demonstrate the existence of a meritorious cause of action against the proposed defendant and the materi

By: Jeffrey M. Haber In DirecTV, LLC v. Nexstar Broadcasting, Inc. , 2024 N.Y. Slip Op. 04225 (1st Dept. Aug. 15, 2024) ( here ), the Appellate Division, First Department considered the viability of a fraudulent inducement claim and whether the plaintiff satisfied the elements of the claim. As discussed below, the Court held that the motion court “should have granted summary judgment in plaintiff’s favor on” this claim. DirecTV arose out of a retransmission consent agreement

By Jeffrey M. Haber A confession of judgment is an agreement whereby a defendant or debtor agrees to the entry of judgment against him/her in an amount certain. It is a procedural device whereby the plaintiff or creditor can bypass the commencement of a lawsuit to obtain the amount “confessed.” Confessions of judgment are used in a variety of circumstances. For example, parties to a litigation may use a confession of judgment as part of a settlement whereby the defendant ag

By: Jeffrey M. Haber In Iberdrola Energy Projects v. Oaktree Capital Management L.P. , 2024 N.Y. Slip Op. 03798 (1st Dept. July 11, 2024) ( here ), the Appellate Division, First Department was asked to determine the scope of a no recourse provision in a contract between two sophisticated commercial actors relating to the construction of a power plant, and, relatedly, the extent to which certain non-parties to the contract (defendants) were insulated from liability by virtue

By: Jeffrey M. Haber Under New York law, an action based upon fraud must be commenced within six years of the date the cause of action accrued, or within two years of the time the plaintiff discovered or could have discovered the fraud with reasonable diligence, whichever is greater. The cause of action accrues when “every element of the claim, including injury, can truthfully be alleged”, “even though the injured party may be ignorant of the existence of the wrong or inju

By: Jeffrey M. Haber On June 11, 2024, the Securities and Exchange Commission (“SEC”) announced ( here ) that it charged the Chief Executive Officer and founder of the now-shuttered artificial intelligence recruitment startup Joonko Diversity, Inc. (“Joonko”), 1 with defrauding investors of at least $21 million by making false and misleading statements about the quantity and quality of Joonko’s customers, the number of candidates on its platform, and the company’s revenue. A