| Nabatkhorian v Nabatkhorian |
| 2015 NY Slip Op 03335 [127 AD3d 1043] |
| April 22, 2015 |
| Appellate Division, Second Department |
[*1]
| Faramarz Nabatkhorian, Respondent, v KatrinNabatkhorian et al., Defendants, and Eliyahu Ben Chaim,Appellant. |
Lipsius-BenHaim Law, LLP, Kew Gardens, N.Y. (David BenHaim of counsel), forappellant.
Frederick K. Brewington, Hempstead, N.Y., for respondent.
In an action, inter alia, to recover damages for fraud and aiding and abetting fraud,the defendant Rabbi Eliyahu Ben Chaim appeals, as limited by his brief, from so much ofan order of the Supreme Court, Nassau County (Winslow, J.), dated November 15, 2013,as denied that branch of his motion which was pursuant to CPLR 3211 (a) (7) to dismissthe cause of action alleging aiding and abetting fraud insofar as asserted against him.
Ordered that the order is reversed insofar as appealed from, on the law, with costs,and that branch of the appellant's motion which was pursuant to CPLR 3211 (a) (7) todismiss the cause of action alleging aiding and abetting fraud insofar as asserted againsthim is granted.
To plead a cause of action to recover damages for aiding and abetting fraud, acomplaint must allege the existence of an underlying fraud, knowledge of the fraud bythe aider and abettor, and substantial assistance by the aider and abettor in theachievement of the fraud (seeHigh Tides, LLC v DeMichele, 88 AD3d 954, 960 [2011]; Oster v Kirschner, 77 AD3d51, 55 [2010]; StanfieldOffshore Leveraged Assets, Ltd. v Metropolitan Life Ins. Co., 64 AD3d 472,476 [2009]). Here, the complaint failed to adequately allege the existence of anunderlying fraud. A plaintiff asserting a cause of action alleging fraud must plead all ofthe following elements: (1) a material misrepresentation or a material omission of factwhich was false and which the defendant knew to be false, (2) made for the purpose ofinducing the plaintiff to rely upon it, (3) the plaintiff's justifiable reliance on themisrepresentation or material omission, and (4) injury (see Lama Holding Co. vSmith Barney, 88 NY2d 413 [1996]; Northeast Steel Prods., Inc. v John Little Designs, Inc., 80AD3d 585, 585 [2011]; E.B. v Liberation Publs., 7 AD3d 566, 567 [2004];Shao v 39 Coll. Point Corp., 309 AD2d 850, 851 [2003]). In addition, in anyaction based upon fraud, "the circumstances constituting the wrong shall be stated indetail" (P.T. Bank Cent. Asia, N.Y. Branch v ABN AMRO Bank N.V., 301AD2d 373, 376 [2003] [internal quotation marks omitted]; see CPLR 3016 [b])."[A]n essential element of any fraud [claim] is that there must be reasonable reliance, to aparty's detriment, upon the representations made" by the defendant against whom thefraud claimed has been asserted (Water St. Leasehold LLC v Deloitte & Touche LLP, 19AD3d 183, 185 [2005]; seeKNK Enters., Inc. v Harriman Enters., Inc., 33 AD3d 872, 872 [2006];Harris v Camilleri, 77 AD2d 861, 863 [1980]). The plaintiff must show a beliefin the truth of the representation and a change of position in reliance on that belief(see Lama Holding Co. v Smith Barney, 88 NY2d at [*2]421; KNK Enters., Inc. v Harriman Enters., Inc., 33AD3d at 872).
Here, affording the pleadings a liberal construction, and accepting the facts allegedin the complaint as true, with the plaintiff accorded the benefit of every favorableinference (see CPLR 3211 [a] [7]; Leon v Martinez, 84 NY2d 83, 87-88[1994]), the complaint fails to allege any material misrepresentation upon which theplaintiff reasonably relied to his detriment (see Matthews v Schusheim, 42 AD2d217, 221 [1973], affd 35 NY2d 686 [1974]).
As a cause of action for aiding and abetting fraud cannot lie without the underlyingfraud having been sufficiently pleaded, the Supreme Court should have granted thatbranch of the appellant's motion which was pursuant to CPLR 3211 (a) (7) to dismiss thecause of action alleging aiding and abetting fraud insofar as asserted against him (seeSmall v Lorillard Tobacco Co., 94 NY2d 43, 57 [1999]; High Tides, LLC vDeMichele, 88 AD3d at 960-961). Dillon, J.P., Dickerson, Duffy and Barros, JJ.,concur.