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THE FRAUD CAUSES OF ACTION SHOULD HAVE BEEN DISMISSED BECAUSE “OUT OF POCKET” DAMAGES WERE NOT DEMONSTRATED (FIRST DEPT).

The First Department, reversing Supreme Court, determined the fraud causes of action should have been dismissed because plaintiffs failed to demonstrate “out of pocket” damages:

Defendants are entitled to summary judgment because plaintiffs failed to show the “out of pocket” damages required for a fraud claim (see e.g. Kumiva Group, LLC v Garda USA Inc., 146 AD3d 504, 506 [1st Dept 2017]). Plaintiffs failed to submit evidence of the value of the … stock they received … . Danco Enters., LLC v Livexlive Media, Inc., 2022 NY Slip Op 05589, First Dept 10-5-22

Practice Point: Here the fraud causes of action were dismissed because plaintiffs did not demonstrate “out of pocket” damages. Decisions relied upon by the plaintiffs concerning exceptions to the “out-of-pocket” damages rule were deemed inapplicable.

 

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