Go to navigation Go to content
Toll-Free: (888) 497-3410
Phone: 516.791.5700
Law Offices of Jonathan M. Cooper

Without Proof of Loss Caused by Fraud, NY Federal Court Dismisses Claim

Blog Category:
Comments (0)


In a decision that was handed down on the eve of Labor Day weekend in the case of Sansal v. Paschal, one of New York's Federal Courts dismissed the fraud and negligent misrepresentation claims of an investor, who claimed he was misled by one of his partners to the deal, and as a result, he received a lesser share of the equity in the venture than he otherwise would have had.


To that end, it bears mention that in order to prevail on a claim of misrepresentation, "[P]laintiff must show both that defendant's misrepresentation induced plaintiff to engage in the transaction in question (transaction causation) and that the misrepresentations directly caused the loss about which plaintiff complains (loss causation)." Laub v. Faessel, 297 A.D.2d 28, 31, 745 N.Y.S.2d 534 (1st Dept. 2002). (For additional information on this topic, please see "How to Prove a Successful Business Fraud Claim Under New York Law").


In dismissing the plaintiff's fraud and negligent misrepresentation claims, however, the court stated as follows:


"Ultimately, there is no evidence to suggest that Paschal's alleged misrepresentation to Sansal caused Sansal to receive any less equity in OTJ than he otherwise would have. There being no genuine dispute of material fact on the issue of loss causation, Paschal is entitled to summary judgment as to Sansal's fraud claim."

Category: General