On August 5, 2022, Justice Boddie of the Kings County Commercial Division issued a decision in Barnard v. Eichler, 2022 NY Slip Op. 32811(U), dismissing a fraud claim as duplicative of a breach of contract claim, explaining:
Turning to plaintiffs’ fraud claim in the tenth cause of action. Defendants alleged plaintiff may not maintain a cause of action for fraud and it is not plead with specificity. The elements of fraud are a misrepresentation or a material omission of fact which was false and known to be false by defendant. made for the purpose of inducing the other party to rely upon it, justifiable reliance of the other party on the misrepresentation or material omission, and injury. Further, 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.
Noteworthy here, it has long been the rule that parties may not assert fraud claims seeking damages that are duplicative of those recoverable on a cause of action for breach of contract. To survive a motion to dismiss for failure to state a cause of action for fraud, the complaint must allege a breach of a duty separate from a breach of contract. Where the plaintiff pleads that it was
induced to enter into a contract based on the defendant’s promise to perform and that the defendant, at the time it made the promise, had a preconceived and undisclosed intention of not performing the contract, such a promise constitutes a representation of present fact collateral to the terms of the contract and is actionable in fraud. However, no such
claims were made here.Further, fraud damages are meant to redress a different harm than damages on a cause of action for breach of contract. Contract damages are meant to restore the nonbreaching party to as good a position as it would have been in had the contract been performed. Fraud damages are meant to indemnify losses suffered as a result of the fraudulent inducement such as damages for foregone opportunities, that would not be recoverable under a contract measure of damages. Where all of the damages are remedied through the contract claim, the fraud claim is duplicative and must be dismissed, even where plaintiff adequately alleged the breach of an duty independent of the contract. The breach of contract claim here encompasses plaintiffs’ entire harm and resulting damages. Therefore, plaintiffs’ tenth cause of action alleging fraud is dismissed, as duplicative of the contract claim.
(Internal quotations and citations omitted).