On March 21, 2026, Justice Masley of the New York County Commercial Division issued a decision in Enterprise v. Shvo, 2026 NY Slip Op. 31129(U), holding that a fraud claim cannot be based on a statement of intention to act in the future, explaining:
In the amended complaint, plaintiffs allege that defendants, through Shvo, made material misrepresentations to Plaintiffs regarding their intent and ability to provide approximately $100 million in funding for the expansion of the CORE: brand and to deliver three turnkey CORE: club locations. Plaintiffs reasonably relied on Defendants’ misrepresentations and would not have entered into the Option Agreement, the Note, and the LOIs had they known the truth about Shvo’s intentions and the financial realities of Shvo Entities. Defendants move to dismiss plaintiffs’ fraud claim because (i) it is contradicted by the parties’ written agreements, (ii) plaintiffs have not alleged justifiable reliance, (iii) the claim has not been pled with sufficient particularity, and (iv) there is no allegation of a present intent on the part of Shvo to break his promise.
The elements of a fraud cause of action consist of a misrepresentation or a material omission of fact which was false and known to be false by the 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. Moreover, “CPLR 3016 (b) provides that where a cause of action or defense is based upon fraud, the circumstances constituting the wrong shall be stated in detail.
Plaintiffs’ fraud claim fails because defendant’s promise to provide funding in the amount of $100 million is not an actionable statement of present fact..
Moreover, plaintiffs fail to allege reasonable reliance on defendants’ promise. Though plaintiffs allege that they had no reason to doubt Shvo’s assertions, given his confident pronouncements about his financial resources and commitment to the projects, plaintiffs also describe Shvo as a real estate developer with a checkered past, including a felony conviction for tax evasion. These conflicting characterizations defeat plaintiffs’ allegations of reasonable reliance.
(Internal quotations and citations omitted).