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Yablon v. Stern
Citation: 2018 NY Slip Op 3650Docket: 6637 157327/16
Court: Appellate Division of the Supreme Court of the State of New York; May 22, 2018; New York; State Appellate Court
Original Court Document: View Document
Paul Yablon and others (plaintiffs) filed a lawsuit against Nicholas S. G. Stern (defendant), the principal of a company hired for apartment renovations. The Supreme Court, New York County, initially dismissed the first and second causes of action but denied dismissal of the third. The Appellate Division modified this decision on May 22, 2018, allowing the second cause of action for conversion to proceed while affirming the dismissal of the fraud claim. Plaintiffs alleged that Stern engaged in fraudulent conduct by soliciting downpayments for subcontractors and suppliers, failing to make the promised payments, and falsely recording transactions in corporate documents. They claimed reliance on Stern's misrepresentations, leading to additional deposits and ultimately resulting in injury when they terminated the contract. Upon termination, they sought the return of $400,000 but received only $84,622.65, with claims that Stern diverted the remaining funds for personal use. The court found that the allegations supported a conversion claim. However, the fraud claim was dismissed as it relied on unactionable future promises and opinions regarding Stern's capabilities rather than present facts. The decision reaffirmed the plaintiffs' right to pursue the conversion claim while upholding the dismissal of the fraud in the inducement claim.