THE COMPLAINT IN THIS TRAFFIC ACCIDENT CASE STATED CAUSES OF ACTION (1) FOR FRAUDULENT INDUCEMENT TO SIGN A RELEASE AND (2) FOR RESCISSION OF THE RELEASE BASED UPON UNILATERAL MISTAKE (SECOND DEPT).
The Second Department, reversing Supreme Court, determined plaintiff’s complaint stated causes of action for fraudulent inducement (to sign a release) and for recsission of the release based on a unilateral mistake. Plaintiff in this traffic accident case alleged the defendant insurer fraudulently induced him to sign the release by telling him the release applied only to property damage, not to personal injury. Plaintiff alleged English was his second language, he did not have his reading glasses, and he relied on the insurance agent’s representations:
“To state a [cause of action to recover damages] for fraudulent inducement, there must be a knowing misrepresentation of material present fact, which is intended to deceive another party and induce that party to act on it, resulting in injury'” … . “The plaintiff must also establish that he or she reasonably relied upon the alleged misrepresentation” … . “A party is under an obligation to read a document before signing it, and cannot generally avoid the effect of the document on the ground that he or she did not read it or know its contents” … . However, “there are situations where an instrument will be deemed void because the signer was unaware of the nature of the instrument he or she was signing, such as where the signer is illiterate, or blind, or ignorant of the alien language of the writing, and the contents thereof are misread or misrepresented to him [or her] by the other party, or even by a stranger” … .
Here, the complaint stated a cause of action by Israel to recover damages for fraudulent inducement against Progressive and Roberts by alleging, inter alia, that English is Israel’s second language, his ability to read English is limited, and he justifiably relied on the misrepresentations made by Progressive’s agent, Roberts, as to the effect of the release, which has resulted in financial damages to him … .
Moreover, the complaint stated a cause of action by Israel, in effect, to rescind the release based on a unilateral mistake against Progressive and Roberts, as the complaint alleged that Israel’s mistake was induced by fraudulent misrepresentation … . Israel v Progressive Cas. Ins. Co., 2023 NY Slip Op 06357, Second Dept 12-13-24
Practice Point: Plaintiff alleged English was his second language, he didn’t have his reading glasses, he was told the release pertained only to property damage, not personal injury, and he relied on that representation. The complaint stated causes of action for fraudulent inducement and rescission of the release based on unilateral mistake.
