First Department Rejects Fraud Claims Based on Routine Boardroom Communications

By: Jeffrey M. Haber

On April 14, 2026, the Appellate Division, First Department issued a decision in which it reiterated the limits of fraud claims in the corporate governance context. In Massoumi v. Ganju, 2026 N.Y. Slip Op. 02208 (1st Dept. Apr. 14, 2026), the Court unanimously affirmed summary judgment dismissing fraud claims brought by a former chief executive officer who alleged that his fellow executives and directors misled him in advance of a board meeting that resulted in his removal.

Background Facts

Plaintiff served as Chief Executive Officer of Zocdoc, Inc., and, like some of the defendants, also held roles within the company’s senior leadership. Defendants included two board members and senior managers, as well as a company employee holding the title “Founder,” though not a board member.

In advance of a scheduled board meeting, plaintiff believed the agenda would focus primarily on product development and marketing strategy. In reliance on that understanding, plaintiff and others prepared presentations and conducted dry-run rehearsals for the board meeting consistent with that vision.

The meeting did not go as Plaintiff envisioned. Rather than discussing product development and marketing, the board initiated a leadership review, appointed new officers, amended the company’s bylaws, placed plaintiff on administrative leave, and ultimately removed him as chief executive officer.

Plaintiff sued, alleging that defendants committed fraud by misleading him prior to the meeting. Plaintiff’s claims were based on three specific incidents: (1) an email from one of the defendants, stating “sounds good” in response to plaintiff’s proposed presentation topics circulated to senior management for the board meeting at issue; (2) a PowerPoint deck labeled “final,” forwarded by another defendant the day before the meeting, along with an agenda; and (3) defendants’ participation in dry-run rehearsals preparing for the meeting as though it would proceed as planned.

According to plaintiff, these actions collectively conveyed false assurances that no adverse employment action would occur at the meeting and that the focus would remain on marketing strategy and product development.

The First Department’s Decision

Under New York law, fraud can be based not only on affirmative misrepresentations, but also on half-truths or misleading partial disclosures.[1] The Court emphasized that when fraud claims are based on affirmative misrepresentations, as plaintiff alleged, the statements must be untrue and must communicate false information:

Although half-truths and misleading partial disclosures can support a fraud claim … , plaintiff casts these three incidents as actionable misrepresentations rather than omissions. For this framing to adequately support his claim, however, the communicative content of these incidents must have been untrue as to the subsequent injurious actions of the board at the meeting.[2]  

The Court held that plaintiff failed to meet this standard.[3] The Court explained that a short email stating “sounds good” was “merely an acknowledgment,” not a factual representation.[4] “Likewise,” said the Court, “an internal document labeled ‘final’ sent in an otherwise contentless email does not, on its own, amount to a promise or warranty.”[5] Finally, the Court noted that participation in rehearsal meetings, standing alone, did not constitute an actionable misrepresentation, particularly where such participation fell within ordinary employee functions.[6] Thus, the Court refused to transform routine corporate communications into actionable false representations.

Perhaps the most consequential part of the Court’s decision concerned the distinction between the duties owed as a fiduciary and the duty of disclosure. Plaintiff argued that defendants, given their overlapping roles on the board and in management, had an obligation to warn him that his termination was under consideration. The Court rejected that argument, stating that, as directors, defendants’ fiduciary duty ran to the corporation and its shareholders, not to plaintiff personally.[7] Therefore, defendants “were not required to forewarn plaintiff that his possible termination would occur at the board meeting.”[8] As such, concluded the Court, plaintiff could not “claim that he was justified in concluding that directors would not discharge these duties.”[9] 

Takeaway

In Massoumi, the Court emphasized that ordinary corporate communications, such as brief email acknowledgments, circulating agendas or presentation materials, and participation in meeting rehearsals, do not, without more, constitute affirmative misrepresentations of fact for purposes of a fraud claim. Similarly, statements such as “sounds good,” internal documents labeled “final,” or participation in preparatory meetings do not, without more, communicate factual assurances about future board decisions. Massoumi shows that courts will not infer misrepresentations of fact from vague, informal, or customary internal corporate exchanges.

Massoumi also shows that where a plaintiff characterizes alleged misconduct as an affirmative misrepresentation, as opposed to an omission or half‑truth, the statement at issue must itself be untrue and must convey false factual information. As discussed, the Court rejected plaintiff’s attempts to reframe neutral or context‑free communications as false merely because the board later acted inconsistently with plaintiff’s expectations.

The Court’s decision underscores that internal coordination and preparation for board meetings are ordinary incidents of corporate life and do not imply false representations about the substance or outcome of a board meeting. Accordingly, participation in dry‑run rehearsals or other preparatory meetings, standing alone, did not support a fraud claim, particularly where such participation fell within routine employee or officer responsibilities.

Of particular note, the Court rejected the argument that directors and senior officers have a fiduciary obligation to warn an executive that his/her removal was under consideration. In doing so, the Court reaffirmed that directors’ fiduciary duties run to the corporation and its shareholders, not to individual executives whose interests may diverge from the company’s.

Finally, because officers and directors must be free to discharge their governance duties, an executive cannot reasonably rely on contentless communications or on silence as assurance that adverse action will not occur. The Court rejected the notion that an executive is justified in assuming that a board would refrain from exercising its authority simply because it had not disclosed its intentions beforehand.

_________________________________

Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes only and is not intended to be, and should not be, taken as legal advice.

Unless otherwise stated, Freiberger Haber LLP’s articles are based on recently decided published opinions and not on matters handled by the firm.

_________________________________

[1] DIRECTV, LLC v. Nexstar Broadcasting, Inc., 199 A.D.3d 561, 562 (1st Dept. 2021).

[2] Slip Op. at *1 (citation omitted).

[3] Id.

[4] Id. at *2.

[5] Id.

[6] Id. (citing Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 559-562 (2009)).

[7] Id. 

[8] Id. (citing Klaassen v. Allegro Dev. Corp., 106 A.3d 1035, 1043-1044 (Del. 2014); Benihana of Tokyo, Inc. v. Benihana, Inc., 891 A.2d 150, 191 (Del Ch. 2005), aff’d, 906 A.2d 114 (Del. 2006)).

[9] Id.