KNK Enterprises, Inc. v. Harriman Enterprises, Inc.

Oct 23, 2006
Versions:33 A.D.3d 872
824 N.Y.S.2d 307

In an action to recover damages for fraud, the defendants appeal from a judgment of the Supreme Court, Nassau County (Peck, J.), entered December 3, 2004, which, after a nonjury trial, is in favor of the plaintiff and against them in the principal sum of $77,500.

Ordered that the judgment is reversed, on the law, with costs, and the complaint is dismissed.

To prevail on a claim of fraud, a plaintiff must show that it actually relied on the purported fraudulent statements and that its reliance was reasonable or justifiable (see Harris v Camilleri, 77 AD2d 861, 863 [1980]). A party cannot claim reliance on a misrepresentation when he or she could have discovered the truth with due diligence (see East 15360 Corp. v Provident Loan Socy. of N.Y., 177 AD2d 280 [1991]). Here, the plaintiff, who was represented by counsel, decided to proceed with the transaction, despite knowing that it had not received full information concerning the transaction; thus its reliance cannot be considered reasonable or justifiable.

In light of our determination, we need not address the parties’ remaining contentions. Miller, J.P., Goldstein, Mastro and Dillon, JJ., concur.