Wednesday, May 14, 2014

Fraud claims and the particularity requirement.

Practice point:  The Appellate Division agreed with plaintiff that the Supreme Court erred in dismissing the common-law fraud claims. The motion court dismissed the claims on the ground that there are no specific allegations that they engaged in any fraudulent conduct. However, plaintiff's theory of fraud does not rest upon a single decisive event which manifestly demonstrates defendants' wrongdoing, but on a series of interrelated events which, viewed as whole, portray the alleged fraudulent scheme.

Student note:  Generally, in a fraud claim, 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, and justifiable reliance of the other party on the misrepresentation or material omission, and injury. CPLR 3016(b) requires that the misconduct complained of be set forth in sufficient detail to clearly inform a defendant with respect to the incidents complained of.

Case:  Loreley Fin. (Jersey) No. 28, Ltd. v Merrill Lynch, Pierce, Fenner & Smith Inc., NY Slip Op 03326 (1st Dept. 2014)

Here is the decision.

Tomorrow's issue: An application to file a late notice of claim.