On April 23, 2025, the Second Department issued a decision in Central Ins. Agency, Inc. v. Estate of Marshal R. Korman, 2025 NY Slip Op 02313, holding that a fraudulent inducement claim failed for failure adequately to allege that a misrepresentation was material, explaining:
A contract induced by fraud is subject to rescission, rendering it unenforceable by the culpable party. To demonstrate entitlement to the remedy of rescission on the basis of fraud, the plaintiff must establish the elements of fraud, namely a material misrepresentation of a fact, made with knowledge of the falsity, an intent to induce reliance thereon, justifiable reliance on the misrepresentation, and damages.
Here, contrary to the Supreme Court’s conclusion, the plaintiffs failed to demonstrate, prima facie, the elements of fraud as a matter of law. While the defendants admitted that the agreement, originally written as between Marshal R. Korman, a licensed insurance broker, and Bures, could be read to incorrectly represent that Allison Korman was a licensed insurance broker, the plaintiffs failed to establish, prima facie, that this misrepresentation was material because it affected Allison Korman’s capacity as executor of Marshal R. Korman’s estate to sell the assets of his insurance agency or for some other reason.
(Internal quotations and citations omitted).