On January 27, 2026, Justice d’Auguste of the New York County Commercial Division issued a decision in Ace Group 11, Inc. v. All State Constr. R Us, Inc., 2026 NY Slip Op. 30337(U), dismissing a fraud claim for lack of sufficient factual allegations, explaining:
Defendants contend that Ace’s fifth and sixth causes of action for fraud and conspiracy to commit fraud, respectively, are insufficiently pled under CPLR 3016(b).
In connection with the fraud claims, the complaint alleges: “Upon information and belief, Defendant JETON SODOLI, shortly after receiving funds from Plaintiffs, made statements to the Plaintiff and others that he began transferring personal and business assets to Defendant HIKE SODOLI with the intent to hinder, delay, and defraud creditors, including Plaintiffs….” The complaint also alleges: “Jeton Sodoli admitted to Plaintiffs and/or third parties that he deliberately concealed assets and had no intention of repaying the sums advanced….” The complaint further alleges: “Upon information and belief, at the time of execution of each MCA Agreement, Defendants had no present intention of fulfilling their contractual obligations and instead used the agreements as a vehicle to obtain funds under false pretenses. Defendant Jeton Sodoli openly admitted that he concealed assets to prevent Plaintiffs from recovery, thereby confirming his fraudulent intent from the inception of the agreements.” The complaint further alleges: “Defendants JETON and HIKE SODOLI knowingly and intentionally made material misrepresentations regarding the ongoing operation and financial condition of ALL STATE … in order to induce Plaintiffs to enter into the MCA Agreements.”
As an initial matter, the bulk of Ace’s allegations in support of its fraud claims are made upon information and belief. However, as the First Department held in Facebook; Inc. v. DLAPiper LLP (US), 134 A.D.3d 610, 615 (1st Dept 2015), statements made in pleadings upon information and belief are not sufficient to establish the necessary quantum of proof to sustain allegations of fraud.
In addition, CPLR 3016(b) provides that when pleading fraud, the circumstances constituting the wrong shall be stated in detail. Such details should logically include allegations pertinent to the alleged fraud that would ordinarily be within the knowledge of the pleader. Accordingly, Ace should be able to apprise the defendants regarding the specifics of their alleged misrepresentations to Ace. For example, the complaint alleges that the Sodolis made material misrepresentations regarding the ongoing operation and financial condition of All State, but conveys no details as to what was actually said to Ace, when or where it was said, how it was false, or how it was relied upon by Ace.
For these reasons, the motion to dismiss the fifth and sixth causes of action for fraud are granted. However, Ace will be given the opportunity to replead its fraud claims and thereby supply the details required by CPLR 3016(b).
(Internal quotations and citations omitted).