Justia Contracts Opinion Summaries

Plaintiffs claimed they were fraudulently induced to sell their ownership interests in a company they co-owned with one of the defendants, and fraudulently induced to release defendants from claims arising out of that ownership. At issue was whether the appellate court erred in finding that plaintiffs' claims were barred by the general release they granted defendants in connection with the sale of their interest. The court held that the release was intended to bar the very claims that plaintiffs have brought and that plaintiffs failed to allege that the release was induced by any fraud beyond that contemplated in the release. The court also held that the fraudulent statements plaintiffs point to could not support a conclusion that the release was fraudulently induced, since plaintiffs alleged that they released defendants from claims relating to the sale of their Telmex Wireless Ecuador LLC units without conducting minimal diligence to determine the true value of what they were selling. The court further held that the appellate division majority was therefore correct in concluding that, fully crediting plaintiffs' allegations, they would not be able to prevail as a matter of law. Accordingly, the order of the appellate division was affirmed.

Plaintiffs executed a general agreement with defendant regarding management of their real estate business which contained a general release. At issue was whether the appellate court erred in dismissing plaintiffs' fraud cause of action. The court held that plaintiffs have failed to allege that the release was induced by separate fraud and failed to allege that they justifiably relied on defendant's fraudulent misstatements in executing the release. The court also held that plaintiffs, by their own admission, who were sophisticated parties, had ample indication prior to June 2005 that defendant was not trustworthy, yet they elected to release him from the very claims they now bring without investigating the extent of his alleged misconduct. Accordingly, dismissal of plaintiffs' fraud cause of action was therefore appropriate.

Plaintiff sued defendants over whether plaintiff had been fully paid for construction, rehabilitation, and maintenance work performed for defendants. Defendants moved for summary judgment on the ground, inter alia, that plaintiff was not licensed to do home improvement business in his individual name. At issue was whether plaintiff, by doing business in his own name and not the name on his license, violated Westchester County Administrative Code 863.319(1)(b). The court held that a licensed home improvement contractor who entered into a contract using a name other than the one on his license was not barred from enforcing the contract unless the other party was deceived or otherwise prejudiced by the misnomer. The court also held that the forfeiture of the right to be paid for work done was an excessive penalty in this case for what seemed to have been an inadvertent and harmless violation of the County Code. Accordingly, the order of the appellate division should be reversed with costs and defendants' motion for summary judgment denied.