On March 15, 2022, Justice Ruchelsman of the Kings County Commercial Division issued a decision in Vashovsky v. Zablocki, 2022 NY Slip Op 30861(U), allowing the addition of a claim for reformation based on allegations of the insured’s inexperience, explaining:
Turning to the motion seeking to add a claim for reformation of the contract, in Snell v. Atlantic Fire and Marine Insurance Company, 98 US 85, 8 Otto 85, 25 L.Ed. 52 [1878] the Supreme Court held that where an insurance contract from which, by mistake, material stipulations have been omitted, whereby the true intent and meaning of the parties are not fully or accurately expressed then reformation of the contract is appropriate. To hold otherwise, the court explained, would allow the insurance company to obtain an unconscionable advantage, through a mistake, for which its agents were chiefly responsible. A mutual mistake exists where both parties share the same erroneous belief and their acts do not in fact accomplish their mutual intent. Thus, to succeed upon a claim for reformation of a written agreement upon the grounds of mutual mistake, the party seeking reformation must establish, by clear and convincing evidence the agreement does not accurately express the parties’ intentions or previous oral agreement.
In this case the amended complaint alleges the defendant’s lack of experience. While that was considered insufficient to allege fraud it surely informs of the intent of the parties and the expectations of the plaintiff. Further, the proposed amendment asserts the defendant failed to provide the requisite capital contributions that were agreed to by the parties undermining the entire basis upon which the agreement was based. Again, while discovery will narrow these issues and either support their veracity or expose their inadequacies, at this juncture the allegation has merit and the motion seeking to amend the complaint to add a claim for contract rescission is granted.
(Internal quotations and citations omitted).