On August 13, 2025, Justice Patel of the New York County Commercial Division issued a decision in Sotheby’s Intl. Realty, Inc. v. Waterbury, 2025 NY Slip Op. 33109(U), dismissing a fraud counterclaim for failure adequately to allege reasonable reliance, explaining:
The fraud counterclaim and cause of action in the third-party action requires that a party plead with particularity the elements of a material misrepresentation of fact, knowledge of its falsity, an intent to induce reliance, justifiable reliance by Defendant/Third-Party Plaintiff, and damages. Here, Defendant/Third-Party Plaintiff does not adequately plead how they justifiably relied on Plaintiff/Third-Party Defendant’s alleged conduct. The counterclaim merely states that Third-Party Defendant knowingly misrepresented the purpose of the visit by customers on or about July 2, 2024 and the value of [the Property to be significantly less that its actual value for her own benefit to the detriment of the Third-Party Plaintiff, and Third-Party Plaintiff reasonably relied upon the misrepresentations which caused damages.
The Court affords Defendants/Third-Party Plaintiff the benefit of the most favorable inferences and finds that allegations do not state a claim for fraud. Defendants do not adequately allege reasonable reliance when they plead that Waterbury relied solely on Boyer-Stump’s alleged misrepresentations without mentioning his own inquiry into the basis for her estimations or into the possibility of higher selling prices. As such, the vague allegations of fraud do not give proper notice of the transactions and occurrences intended to be proved and therefore the Court dismisses the counterclaim/third-party cause of action.
(Internal quotations and citations omitted).