Rothman v. Hasz Project Management and Design
7:24-cv-03651
| S.D.N.Y. | Jun 24, 2025Background
- Plaintiff Loren Rothman hired Hasz Project Management and Design (d/b/a Hudson Trailer Company), run by Suzanne Hasz, to renovate a vintage vehicle into a luxury mobile bar for his business, Stargazer Social Club.
- Plaintiff alleges that he based his selection of Hudson on the company's representations of expertise, craftsmanship, and timeline assurances made by Hasz and others, choosing them over less expensive competitors.
- After entering into a Services Agreement in November 2022 and paying over $127,000, Plaintiff received the vehicle with numerous defects and unfulfilled specifications, resulting in substantial additional repair costs.
- Rothman filed suit in New York state court asserting claims for fraudulent inducement and negligent misrepresentation against both defendants, and breach of contract, unjust enrichment, and violations of N.Y. General Business Law (false advertising and deceptive practices) against Hudson only.
- Defendants removed the case to federal court and moved to dismiss the fraud, negligent misrepresentation, and General Business Law claims, and to dismiss Hasz individually, arguing the claims are duplicative and insufficiently pled.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Can Hasz be liable for misrepresentation/fraud as corporate officer? | Hasz personally made fraudulent statements inducing the contract. | Corporate officer can't be liable for corporate acts under NY law. | Yes, if officer participates in or knows of fraud, personal liability attaches. |
| Are the fraud/negligent misrepresentation claims duplicative of contract claims? | The misrepresentations were made before contract and are extraneous. | Claims are redundant; merely repackage the contract claim. | Fraud/misrepresentation claims survive if based on pre-contract, collateral misrepresentations. |
| Are allegations sufficient under Rule 12(b)(6)/9(b)? | Complaint contains detailed facts as to misrepresentations and reliance. | Allegations are conclusory, lack requisite specificity for fraud. | Sufficiently pled; allegations meet plausibility and "collateral to contract" standards. |
| Do GBL §§ 349/350 claims require heightened pleading? | Rule 8(a) applies, not Rule 9(b); allegations meet low threshold for consumer deception. | Must plead with particularity; allegations are insufficient. | No need for heightened pleading; claims meet required standard and are adequately alleged. |
Key Cases Cited
- Ashcroft v. Iqbal, 556 U.S. 662 (Pleading standard for facial plausibility under 12(b)(6))
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (Standard for sufficiency of factual allegations in civil complaints)
- Cohen v. Koenig, 25 F.3d 1168 (2d Cir. 1994) (Corporate officers personally liable for fraud in which they participate or have actual knowledge)
- Wall v. CSX Transp., Inc., 471 F.3d 410 (2d Cir. 2006) (Fraud claim not actionable if it simply repackages a contract claim)
- Orlander v. Staples, Inc., 802 F.3d 289 (2d Cir. 2015) (Elements and standards for deceptive practices under N.Y. Gen. Bus. Law § 349)