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Deerfield Communications Corp. v. Chesebrough-Ponds

Court of Appeals of the State of New York
Nov 13, 1986
68 N.Y.2d 954 (N.Y. 1986)

Summary

holding that a false promise to not resell goods outside a specific geographical area "constitute[d] a misrepresentation" for purposes of fraud where geographical restrictions were not contained in the written agreement for the purchase of those goods

Summary of this case from Spinelli v. Nat'l Football League

Opinion

Decided November 13, 1986

Appeal from the Appellate Division of the Supreme Court in the First Judicial Department, Burton S. Sherman, J.

James J. Higgins for appellant. Alan E. Golomb for respondents.


MEMORANDUM.

The order of the Appellate Division should be affirmed, with costs.

Defendant stated three counterclaims: (1) for breach of contract in failing to pay the balance due of the purchase price, (2) for breach of contract in violating geographic restrictions on resale allegedly agreed to orally, and (3) for fraud in the inducement in that plaintiff had no intention of abiding by the geographical restrictions orally agreed to. The second counterclaim was dismissed because the restrictions were not contained in the written contract and the jury returned a verdict of $170,000 on the first counterclaim and $130,000 on the third. The Appellate Division affirmed, without opinion.

The trial court properly denied plaintiff's motion to dismiss the third counterclaim. As we stated in Sabo v Delman ( 3 N.Y.2d 155, 160) "a promise * * * made with a preconceived and undisclosed intention of not performing it, * * * constitutes a misrepresentation". Involved in defendant's third counterclaim, therefore, is not a mere promissory statement as to what will be done in the future (see, Channel Master Corp. v Aluminum Ltd. Sales, 4 N.Y.2d 403; Sabo v Delman, supra). It alleged rather "a representation of present fact, not of future intent" (Citibank v Plapinger, 66 N.Y.2d 90, 94) collateral to, but which was the inducement for the contract, and thus was neither duplicative of the second counterclaim (see, Sager v Friedman, 270 N.Y. 472, 479) nor barred by the general merger clause contained in the contract (Danann Realty Corp. v Harris, 5 N.Y.2d 317; see, Citibank v Plapinger, supra).

Moreover, review of the jury charge makes clear that there was no duplication of damages in the jury's awards on the first and third counterclaims. The measure of damages recoverable for being fraudulently induced to enter into a contract which otherwise would not have been made is "indemnity for [the] loss suffered through that inducement" (see, Sager v Friedman, 270 N.Y., at p 481, supra). Here the jury was properly allowed to award damages to defendant on the third counterclaim for the costs to locate the goods, the costs to repurchase the goods, storage fees and disposal costs, and under the first counterclaim for the balance remaining due on the purchase price for the goods sold and delivered.

The court concludes that plaintiff's remaining allegations of error are without merit.

Chief Judge WACHTLER and Judges MEYER, SIMONS, KAYE, ALEXANDER, TITONE and HANCOCK, JR., concur.

On review of submissions pursuant to section 500.4 of the Rules of the Court of Appeals (22 N.Y.CRR 500.4), order affirmed, with costs, in a memorandum.


Summaries of

Deerfield Communications Corp. v. Chesebrough-Ponds

Court of Appeals of the State of New York
Nov 13, 1986
68 N.Y.2d 954 (N.Y. 1986)

holding that a false promise to not resell goods outside a specific geographical area "constitute[d] a misrepresentation" for purposes of fraud where geographical restrictions were not contained in the written agreement for the purchase of those goods

Summary of this case from Spinelli v. Nat'l Football League

holding oral representation formed proper basis for contract and fraud charge

Summary of this case from Merrill Lynch v. Allegheny Energy

holding that "a promise [not contained in the written agreement] made with a preconceived and undisclosed intention of not performing it . . . constitutes a misrepresentation" for purposes of a fraud in the inducement cause of action (quoting Sabo v. Delman, 3 N.Y.2d 155, 160, 143 N.E.2d 906, 908, 164 N.Y.S.2d 714, 716 (1957))

Summary of this case from Wall v. CSX Transportation, Inc.

holding that fraud claim was not duplicative of breach of contract claim where buyer made misrepresentations that it would abide by certain geographical restrictions in order to induce seller to enter into the contract

Summary of this case from Airport Mart Inc. v. Dunkin' Donuts Franchising LLC

holding that a fraudulent misrepresentation "which was the inducement for the contract ... was neither duplicative" of a contract claim, "nor barred by the general merger clause contained in the contract."

Summary of this case from Capax Discovery, Inc. v. AEP RSD Investors, LLC

holding that a representation of present fact which was "the inducement for the contract" and which was "collateral to" that contract, could support a claim of fraud

Summary of this case from International Cabletel Inc. v. Le Groupe Videotron Ltee

holding that the claim for fraud in the inducement was "a representation of present fact, not of future intent . . . collateral to, but which was the inducement for the contract, and thus was neither duplicative of the [contract claim] . . . nor barred by the general merger clause contained in the contract."

Summary of this case from In re Marketxt Holdings Corp.

finding that "a promise [not contained in the written agreement] made with a preconceived and undisclosed intention of not performing it . . . constitutes a misrepresentation" for purposes of a fraud in the inducement cause of action

Summary of this case from Estrada v. Dugow

finding that a misrepresentation regarding a present fact may give rise to a claim for fraudulent inducement separate and apart from a breach of contract claim

Summary of this case from CSI Investment Partners II, L.P. v. Cendant Corp.

finding a fraudulent inducement claim when analyzing a contract for sale of goods

Summary of this case from Brady v. Calyon Securities

concluding that fraudulent inducement counterclaim was not duplicative of breach of contract counterclaim where "[i]t alleged . . . a representation of present fact, not of future intent collateral to, but which was the inducement for the contract"

Summary of this case from RABIN v. MONY LIFE INS. CO

upholding damage award on claims of breach of contract and fraudulent inducement of that contract

Summary of this case from Spinelli v. Nat'l Football League

upholding fraud claim concerning promise to restrict sales to certain geographic area where contract included no such restrictions

Summary of this case from Spinelli v. Nat'l Football League

upholding a fraudulent inducement claim brought alongside a breach of contract claim where damages sought were not duplicative

Summary of this case from Lam v. American Express Co.

affirming denial of motion to dismiss counterclaim for "fraud in the inducement in that plaintiff had no intention of abiding by the geographical restrictions orally agreed to"

Summary of this case from Wall v. CSX Transportation, Inc.

affirming a lower court's denial of a motion to dismiss the plaintiff's fraudulent concealment counterclaim where another counterclaim sounded in contract and the only alleged damages were purely economic

Summary of this case from In re Gen. Motors LLC

affirming denial of motion to dismiss, where allegation was "'a representation of present fact, not of future intent' . . . collateral to, but which was the inducement for the contract, and thus was neither duplicative of the [breach-of-contract claim] nor barred by the general merger clause contained in the contract."

Summary of this case from Intelligen Power Sys., LLC v. dVentus Techs. LLC

affirming plaintiff's right to recover special damages resulting from fraud in the inducement that are otherwise not unrecoverable under the contract

Summary of this case from Lichtenstein v. Reassure America Life Insurance Co.

affirming lower court's denial of motion to dismiss fraudulent concealment counterclaim where another counterclaim sounded in contract and the only alleged damages were purely economic

Summary of this case from EED Holdings v. Palmer Johnson Acquisition Corp.

rejecting contention that separate awards in same action for breach of contract and for the tort of fraudulent inducement were duplicative and clarifying that "measure of damages recoverable for being fraudulently induced to enter into a contract which otherwise would not have been made is indemnity for the loss suffered through that inducement"

Summary of this case from LNV Corp. v. Outsource Serv. Mgmt., LLC

refusing to dismiss fraud claim alleging "a misrepresentation of present fact, not of future intent" which misrepresentation was "collateral to, but which was the inducement for the contract" and thus not duplicative of contract claim

Summary of this case from TVT Records v. The Island Def Jam Music Group

refusing to dismiss fraud claim alleging "a misrepresentation of present fact, not of future intent" which misrepresentation was "collateral to, but which was the inducement for the contract" and thus not duplicative of contract claim

Summary of this case from Bridgestone/Firestone, Inc. v. Recovery Credit Services., Inc.

permitting fraudulent inducement claim premised on representations "not contained in the written contract"

Summary of this case from Horowitz v. Nat'l Gas & Elec., LLC

refusing to dismiss a fraud claim alleging "a misrepresentation of present fact, not of future intent" which misrepresentation was "collateral to, but which was the inducement for the contract" and thus not duplicative of contract claim

Summary of this case from Commercial Lubricants, LLC v. Safety-Kleen Sys., Inc.

Distinguishing between “promissory statements as to what will be done in the future,” which permit only a breach of contract claim, and “false representations of fact,” which give rise to a fraudulent inducement cause of action.

Summary of this case from Cato Capital LLC v. Hemispherx Biopharma, Inc.
Case details for

Deerfield Communications Corp. v. Chesebrough-Ponds

Case Details

Full title:DEERFIELD COMMUNICATIONS CORPORATION, Appellant, v. CHESEBROUGH-PONDS…

Court:Court of Appeals of the State of New York

Date published: Nov 13, 1986

Citations

68 N.Y.2d 954 (N.Y. 1986)
510 N.Y.S.2d 88
502 N.E.2d 1003

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