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THE COMPLAINT DID NOT STATE A CAUSE OF ACTION FOR FRAUD IN THE INDUCEMENT, AS OPPOSED TO AN INSINCERE PROMISE OF FUTURE PERFORMANCE; ALTHOUGH THE ISSUE WAS RAISED IN REPLY AND WAS NOT RAISED BELOW, IT WAS CONSIDERED ON APPEAL BECAUSE IT WAS DETERMINATIVE, DID NOT ALLEGE NEW FACTS, AND COULD NOT HAVE BEEN AVOIDED IF RAISED BELOW (FIRST DEPT). ​

The First Department, reversing (modifying) Supreme Court, determined the complaint did not support a cause of action for fraud in the inducement. Plaintiff ordered an artistic silk floral display but rejected it when delivered on the ground the display did not match what plaintiff ordered. Defendants refused to refund the money. Although the inadequacy of the fraud in the inducement allegations was first raised in reply, the First Department considered it because it was determinative, did not allege new facts and could not have been avoided if raised below:

As for the fraud in the inducement claim, defendants challenged this claim in their reply brief in Supreme Court. While, normally, arguments set forth for the first time in reply should not be considered … , this Court will consider this argument as it is determinative, does not allege new facts, and is a legal argument on the face of the record that would not have been avoidable if raised in defendants’ moving brief below, and because the record is sufficient to resolve the issue … . Here, plaintiff merely alleged that defendants “grossly misrepresented the quality and nature of the Decorations” to induce plaintiff into retaining them and compensating them, and the representations were false when made. This simply alleges “an insincere promise of future performance under the contract, which is insufficient to plead fraud” … . As such, the fraud in the inducement claim is dismissed. Newport E. Inc. v Sviba Floral Decorators, Inc., 2022 NY Slip Op 00819, First Dept 2-8-22

 

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