CPLR R. 3016(b) with particularity

CPLR R. 3016 Particularity in specific actions

Nicosia v Board of Mgrs. of the Weber House Condominium, 2010 NY Slip Op 07254 (App. Div., 1st 2010)

Plaintiff's fraud claim should be dismissed for the additional reason that it is not pleaded with particularity (CPLR 3016[b]). A cause of action for fraud requires plaintiff to plead: (1) a material misrepresentation of a fact, (2) knowledge of its falsity, (3) an intent to induce reliance, (4) justifiable reliance and (5) damages (Eurycleia Partners, LP v Seward & Kissel, LLP, 12 NY3d 553, 559 [2009]). Plaintiff's complaint is bare-bones. Among other deficiencies, plaintiff does not allege how he learned that the Board was purporting to exercise its right of first refusal. Plaintiff attaches an August 6, 2007 letter that the Board sent to Axminster's attorney stating that the Board was electing to exercise its right of first refusal. However, plaintiff does not articulate who communicated this information to him or when he received this information. Thus, we are left to guess that somehow Axminster's attorney communicated the Board's decision to plaintiff at some point. Plaintiff also does not explain how he relied to his detriment on the Board's alleged exercise of its right of first refusal. While we can suppose that plaintiff's reliance somehow involved his refraining from taking steps to enforce the closing, it is not for us to interject our supposition into plaintiff's pleading. Nor is it our place to explain what damages might have flowed from the failure to close. The dissent points to allegations from the tortious interference cause of action where plaintiff alleges that because of defendants' wrongful conduct, "plaintiff's contract with Axminster to purchase the Unit was not consummated." However, this language does not appear in plaintiff's cause of action for fraud. And, even if it did, this language would hardly satisfy the CPLR 3016(b) requirement that the facts constituting the fraud "be stated in detail." Certainly, what plaintiff did or did not do after learning that the Board was exercising its right of first refusal, and what damages flowed from that action or inaction, are within plaintiff's purview.

While the dissent may be correct that plaintiff can prevail on his fraud claim "if Axminster reasonably relied on the misrepresentation in selling the unit to Kesy," plaintiff has not alleged this. Rather, plaintiff's allegations concerning Axminster are more nefarious — that Axminster directly breached its duties to plaintiff by failing to perform "its required due diligence to determine if the sale to KESY was in accordance with the By-laws."

Thus, the facts of this case could very well eventually support a fraud claim. However, plaintiff has not pleaded these facts sufficiently and, unlike the dissent, we decline to speculate and infer the facts for him, especially given our liberal rules regarding amendment of pleadings.

The bold is mine.


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