Opinion
No. 08683/97.
2012-12-12
F.C., Plaintiff, v. R.B., Defendant.
F. C., Plaintiff–Pro Se. R. B., Defendant–Pro Se.
F. C., Plaintiff–Pro Se. R. B., Defendant–Pro Se.
JOHN P. COLANGELO, J.
History and Background of this Motion
By this motion, the procedural history of which is as convoluted as the motion is superannuated, Plaintiff F.C. (“Plaintiff” or “F. C.”) seeks to vacate a portion of a stipulation entered into by him and Defendant R.B. (“Defendant” or “R. B.”) and so ordered by the Court over 8 years ago, on July 19, 2004 (the “Stipulation”). The genesis of the Stipulation is a custody and access dispute between the parties with respect to their child Q (the “Child” or “Q”); that dispute was resolved by a September 2003 stipulation (the “Custody Agreement”). The Stipulation at issue, entered into in open court before Special Referee James Montagnino (“Referee Montagnino”) after both parties were fully allocuted, pertained, inter alia, to the responsibility for certain expenses incurred during the custody dispute. Pursuant to that portion of the Stipulation, F.C. agreed to waive his right to seek attorney fees incurred with respect to the custody dispute, and waived his right to seek reapportionment of fees charged for the Court-appointed forensic evaluation and for the attorney for the child up to the date of the Stipulation. If the Stipulation is vacated in part as sought by the instant motion, then F.C. seeks the affirmative relief of attorney fees in the amount of $113,628.77, forensic evaluation fees in the sum of $7,700.00 and fees for the attorney for the child in the amount of $3,300.00, all for services purportedly rendered between April 2002 and the date of the Stipulation.
The instant motion arose during the course of a 2008–2009 hearing before Special Referee Reynold Snyder (“Referee Snyder”). That hearing (the “Snyder Hearing”), ordered by the Appellate Division, addressed the relative financial positions of the parties in the context of F. C.'s attempt to reapportion certain of the parties' ongoing financial obligations, including law guardian fees, forensic evaluation fees and attorneys fees. (See Pl. Hearing Exh. 8, Dec. Of Special Referee Synder, dated April 28, 2010 (the “Snyder Dec.”). In March 2009, in the midst of the Snyder Hearing, F.C. made the instant motion to vacate the Stipulation as described above, claiming that his agreement to it was induced by fraud. In August, 2009, the Supreme Court, per Acting Justice Anthony Scarpino, denied F. C.'s motion to vacate. On appeal by F. C., the Second Department reversed Justice Scarpino's decision, and remitted the matter for a hearing on the issues of “whether the father's [F. C.'s] agreement to the subject portions of the stipulation was fraudulently induced and, if so, whether he is entitled to an award of attorney's fee and/or reapportionment of the parties' responsibility for the fees incurred in connection with the litigation that was resolved by the stipulation.” (Decision and Order of the Appellate Division, Second Dept, dated June 14, 2011, No.2009–09271, p. 4 (hereinafter the “Second Dept. Dec.”).
In holding that F. C.'s allegations of fraud were sufficient to warrant a hearing, the Appellate Court principally relied upon evidence adduced at the Synder Hearing, particularly R. B.'s May 2004 Net Worth Statement—“the sole document provided by her at the time of the stipulation” (2nd Dept. Dec., p. 3). The body of that statement (Pl. Hearing Exh. 1, p. 5) showed, as the Second Department noted, income of her husband in 2004 of $105,000.00 and joint income of both she and her husband of approximately $142,000.00 as opposed to the $306,361.00 in joint income from wages of both Defendant and her husband as listed on the couple's 2004 tax return.
The Second Department also noted that other 2004 statements of R.B. also adduced at the Snyder hearing showed joint deposits totaling approximately $450,000.00 for that year, where the 2004 Statement of Net Worth was blank for “Total Cash Accounts.” ( Id.). Thus, according to the Second Department analysis and as F.C. contends herein, the fraud as alleged by F.C. revolved around misstatements or omissions contained in R. B.'s 2004 Net Worth Statement, particularly the alleged discrepancy between the line item of joint income reflected in the body of that statement and the joint income shown on the Bs' tax return.
The Second Department mistakenly refers to the $306,301 figure as “her husband's [Mr. B's] gross income as reported on their joint tax returns for 2004.” As the first page of the couple's 2004 joint return reflects, that amount actually represented the “wages, saleries, tips etc.” received by both Mr. and Mrs. B. jointly in 2004, not Mr. B's total gross 2004 income. (See page 1 of the B's 2004 Form 1040, annexed as Exhibit L to F. C's Affidavit in support of the instant motion, Pl. Hearing Exh. 3).
The Hearing.
In accordance with the Second Department's Decision, a hearing was held by this Court over several days, beginning in December 2011 and concluding in July 2012 (the “Hearing”). Both parties appeared pro se throughout. F.C. called as witnesses R. B.'s former attorney, William Martin, as well as Defendant R.B. and her husband Alan B. (“Alan B.” or “Mr. B.”). F.C. testified on his own behalf. F.C. also adduced a number of documents that were admitted into evidence including, most notably, R. B.'s May 2004 Net Worth Statement (the “Net Worth Statement” or the “Statement”, Pl. Hearing Exh. 1), the sole document provided to F.C. by R.B. at the time he entered into the Stipulation at issue and on which F.C. claims he relied in agreeing to the Stipulation. (2d Dept. Dec., p. 3; see also F.C. Affidavit in Support of the instant motion, Pl. Hearing Exh. 3, ¶ 27). R.B. testified on her own behalf.
Discussion
During the course of the Hearing, Plaintiff adduced documents and elicited testimony from R.B. indicating that several of the entries on her Net Worth Statement did not include certain assets or deposits, the source of which was Alan B. For example, R.B. did not list certain jewelry—including her wedding ring—on the Statement, and listed but did not assign specific values to other items given to her by her husband and/or jointly used, such as one of the family cars or deposits into joint bank accounts. R.B. also failed to detail certain other assets and liabilities, including credit card expenses for which her husband or his company paid. R.B. sought to explain these lapses by stating, in essence, that based at least in part on the advise she received from counsel, she did not believe she was required to list “gifts” that were made to her, or assets that were her husband's; she testified that in view of the context in which the Statement was submitted—a hearing stemming from a child support and custody proceeding relating to the Child Q—her husband's gifts and assets were “not important” since he bore no responsibility for the support of Q. Indeed, the Net Worth Statement itself contains what amounts to a disclaimer by R.B. to that effect.
As Paragraph X of the Statement recites,
“Other data concerning financial circumstances of the parties that should be brought to the attention of the Court are:
R. B's income alone is insufficient to provide the support for Q. Alan B. has no legal obligation to provide support for Q and in addition has significant expenses providing for the support of his own children including the costs of college for a second child starting Fall Semester 2004.”
(Pl. Hearing Ex. 1, p. 14; emphasis added).
F.C. was thus aware of R. B's perspective—technically correct or not—in completing her Net Worth Statement at the time he claims to have relied upon it. Be that as it may, the above mentioned discrepancies are not dispositive in view of a more significant item in the Net Worth Statement, the provisions in the Net Worth Statement with respect to Alan B's income and the Bs' joint 2004 income—items on which F.C. and, in turn, the Appellate Division, focused their attention. Even assuming arguendo that the statements by R.B. regarding her jewelry, joint and separate bank accounts and other assets and liabilities are deemed material, F.C. had no right to rely on them in making his decision to agree to the Stipulation since other contents of the Net Worth Statement indicated that the Bs' joint income—contrary to F. C's contention herein—was substantially higher that the entry listed in the body of it alone states. Such a significant deviation triggered a duty to investigate that and other statements made for R.B. in the Net Worth Statement—a duty F.C. apparently ignored at the time.
The body of the Net Worth Statement (Pl. Hearing Exh. 1, p. 5) on which F.C. claimed to rely ascribes an annual income to R.B. of approximately $37,000.00 and to Alan B. of $105,000.00 for a total 2004 joint income of approximately $142,000; the Bs' joint tax return for 2004 showed a substantially higher joint wage income—over $306,000.00, as the Second Department recognized (2d Dept., Dec., p. 3; see also Exh. L. to F.C. Affid. In Support of the instant motion, contained in Pl. Hearing Exh. 3, first page of the Bs' 2004 joint federal tax return). However, this line item of income is not the sole mention of Mr. B's income contained in the Statement. Attached to the Net Worth Statement are two documents: a pay stub showing R. B's then annual salary income and a document entitled “Compensation Report” from her husband's employer, G.S. I ., with respect to Alan B's monthly wage income in 2004 of approximately $21,600.00. (collectively the “Attachment” or the “Attachments”). The Attachments, when examined, indicate that the Bs' joint income was significantly higher than listed on page 5 of the Statement, and was consistent with the “true” annual income in excess of $306,000.00 mentioned in the Second Department's Decision and reflected on the couple's 2004 tax return.
Indeed, Alan B's monthly income in 2004 as shown on the last page of the Attachments—his salary from his business/employer—when annualized and added to R. B.'s annual income as set forth on the previous page of the Attachment, approximates the wage income reported by both on their 2004 joint tax return—thus impugning F. C .'s contention, cited by the Appellate Decision, that the discrepancy between the two and particularly the much smaller amount reflected in the body of the Statement, is evidence of fraud. Moreover, that total 2004 Bs' joint income in excess of $306,000.00 was in the same range as the income F.C. believed the Bs had enjoyed in prior years—in 2002 and 2003 respectively, as reflected in a prior F.C. submission to this Court. In March 2004, F.C. conceded—indeed, proclaimed—his belief that the Bs had 2002 and 2003 income in the $400,000.00 range in documents he submitted to this Court, prior to his agreement to the Stipulation. The Court takes judicial notice of an affidavit submitted to this Court by F.C. and his then counsel, Phillips Nizer, in connection with his motion for counsel fees, law guardian and other fees that were ultimately resolved by the 2004 Stipulation at issue here As F.C. stated in his affidavit,
“2. Defendant's [R. B.'s] moving papers do not include a statement of networth
* * * *
4. I can only assume that she omits a current net worth statement because she does not want to show her 2003 income which, I infer, exceeds the over $400,000.00 she reported in 2002”.
* * * *
16. Defendant's income tax return for 2002 shows a gross income of $426,951.00.”
(Affd. of F. C., sworn to March 15, 2004, annexed to R. B.'s Post Hearing Submission dated Sept. 7, 2012: see also Exh. G to Pl. Hearing Exh. 3, F.C. Affid. in Support of the instant motion, showing the cover page of the March 2004 motion for counsel fees; Richardson on Evidence, Section 2–209 at p. 45 (“In New York, a court may take judicial notice of a record in the same court either of the pending action or of another action.”).
In light of these facts, F.C. cannot now credibly claim that he had a right to rely on the income figure set forth in the body of the Statement of Net Worth with respect to the central issue of the Bs' joint income and assets—in particular, the 2004 income of Mr. B. and the Bs jointly. Rather, he was clearly aware—as reflected in his own assertion in his March 2004 affidavit—or placed on notice—as reflected in the Attachments to the Net Worth Statement on which he claims to rely—that the Statement's entry of joint income in the amount $141,794.31 was significantly understated, and that he should be guided accordingly.
It is undisputed that the income line item in the body of the Statement showed an annual joint income of approximately $142,000.00, whereas the amount reflected in the Attachments revealed an income over twice as great—approximately $306,000.00. Such a disparity in as rudimentary a component of net worth as income should have given F.C. pause, and thereby prompted him to investigate not only the income entry, but the other entries set forth in R. B.'s Net Worth Statement as well.
At the very least F.C. could have—and as discussed below, as a matter of law should have—either inquired further, or declined to enter into the Stipulation until he could resolve the purported discrepancies to his satisfaction. The fact that he chose not to do so but instead elected to proceed with the Stipulation speaks volumes as to whether F.C. actually did rightly rely on the income and asset figures set forth in the body of the Net Worth Statement. The ineluctable conclusion is that he did not, or for purposes here, cannot sustain his burden of proving that he did. As discussed below, this inability to prove an essential element of his fraud claim—justifiable reliance—alone compels the denial of Plaintiff's motion.
Analysis and Conclusions.
As a preliminary matter, the Court notes that stipulations, particularly in the context of matrimonial actions, are a favorite of the courts and are not lightly cast aside. The law is clear that stipulations in a matrimonial action are freely negotiated agreements to which the parties are bound, absent compelling circumstances to the contrary. See, e.g., Colucci v. Colucci, 54 AD3d 710 (2d Dept.2008); Gravlin v. Ruppert, 98 N.Y.2d 1 (2002); Herzfeld v. Herzfeld, 50 AD3d 851 (2d Dept.2008); Monahan v. Monahan, 2 Misc.3d 1011 A, 784 N.Y.S.2d 921, 2004 WL 869592 (Sup.Ct., Nassau Co.2004) [“The law is well settled that open court stipulations are judicially favored and will be enforced unless there is proof of fraud, duress, overreaching or unconscionability”]; Van Wie v. Van Wie, 124 A.D.2d 353 (3d Dept.1986). Here, F.C. maintains that the Stipulation should be vacated because he was fraudulently induced to enter into it.
It is axiomatic that in order to prevail on a fraud claim, the moving party—here, F. C.—must prove each of the following elements: that the other party intentionally made a misstatement or omission of a material fact, upon which the moving party justifiably relied, to his detriment. See, e.g., Shultis v. Reichel–Shultis, 1 AD3d 876, 877 (3d Dept.2003) (“As with any fraud claim, the proponent must establish (1) misrepresentation of a material fact, (2) scienter, (3) justifiable reliance and (4) injury or damages.”). The party asserting a claim of fraud bears the burden of proof on each of these elements. Id.; see also, Sweeny v. Sweeny, 71 AD3d 989, 992 (2d Dept.2010).
In the instant case, F.C. claims that R.B. fraudently induced him to enter into the Stipulation, and bases his claim primarily upon R. B.'s alleged intentional concealment from F.C. of her husband's income and assets at the time. F. C.'s claim of concealment is predicated in turn upon the purported understatement of R. B.s' income and assets in the body of the Net Worth Statement prepared by R.B. in 2004 in the context of the proceeding before Referee Montagnino that ultimately resulted in the Stipulation at issue.
However, as both the testimony and documentary evidence adduced at the instant Hearing revealed, F.C. clearly failed to sustain his burden of proof with respect to two essential elements of the alleged fraud: namely, that R.B. possessed the requisite intent to deceive him, or that under the circumstances that then obtained, F.C. had a right to rely upon any misstatements or omissions that R.B. may have made in the body of the Net Worth Statement with respect to the Bs' 2004 income and assets. Indeed, F. C.'s fraud claim is belied by the very document on which he relies and upon which his entire case is predicted: the Net Worth Statement itself. As the Statement, including its Attachments shows, it revealed, rather then hid, Mr. B.'s and the Bs' salary income at the time for all—including F. C.—to see. F.C. then he had a duty to investigate the accuracy of the income and asset items listed in the body of the Statement—a duty which he either failed or refused to properly discharge. This alone dooms F. C.'s claim of fraud; the law will not protect those who purport to be so blind to facts presented to them that they refuse to see what has been faithfully revealed, or to investigate when so prompted.
The Net Worth Statement figures prominently in F. C.'s instant motion, in the Second Department's Decision, and in the underlying proceeding before Referee Montagnino. The Statement was produced to and made available to F.C. before he made his decision to agree to the Stipulation at issue. (See 2nd Dept. Dec., p. 3 and discussion infra, pp. 2–4). Indeed, the Statement is the document upon which F.C. principally relies herein; he maintains that R. B.'s alleged failure to accurately specify her husband's income and assets in the Statement was part and parcel of an attempt by her to deceive him as to sources of income and assets available to her. However, F.C. seeks to have the Court ignore the portion of the Statement that sows the seeds of the defeat of his motion: the Attachments to the Statement, which plainly reveals the income of both Mr. and Mrs. B. The page of the Attachment pertaining to Alan B. was part of the Statement, and according to Mr. B.'s undisputed testimony, the document was generated by his employer at the time and shows a substantial 2004 monthly salary—approximately $21,600.00—for Mr. B. Since F.C. had been provided the Statement and Attachments before he made his decision to accept the proffered Stipulation, he was on notice as to what R.B. maintained was Mr. B.'s as well as the couple's joint income and had, at the very least, a duty to inquire as to any discrepancies between the statements contained in the body of the Net Worth Statement and that Attachment before allegedly relying upon the former, to his purported detriment.
The law is clear that a party may not permissibly maintain that he or she relied on an allegedly false document when, at once, other information—including, here, another portion of that same document—contradicts or calls into question the purportedly false term, thereby putting that party on notice and placing upon him the burden to investigate and inquire into the discrepancies. As numerous courts have held, a party with information at his disposal which calls into question the accuracy of an opposing party's representations may not sit idly by and then scream fraud. Rather, that party is charged with the responsibility of using his ordinary skill and intelligence to investigate such representations; his failure to do so will relegate to dismissal any fraud claim based on such representations on that ground that he could not establish that he justifiably relied on them.
For example, in the First Department case of Stuart Silver Associates, Inc. v. Baco Development Corp., 245 A.D.2d 96 (1st Dept.1997), the Court affirmed the lower court's order granting summary judgment to defendants on plaintiffs' claim of fraudulent inducement. In Silver, plaintiffs alleged that defendants had misrepresented certain facts with respect to a real estate development project—including documents containing allegedly misleading financial information regarding defendants' projection of an 8% return on their investment—which induced defendants to invest in plaintiffs' venture. When the project faltered, plaintiffs brought suit, maintaining that they had been misled by such misrepresentations into entering into the agreement and sought damages for fraud.
The First Department rejected plaintiffs' fraud claim on the ground that even assuming that the projections were false, plaintiffs had the means and information at their disposal to investigate the bona fides of defendants' assertions. Since plaintiffs apparently chose not to conduct such an investigation, they “failed to state a fraud claim because they cannot show that their alleged reliance was justified.” ( Id. at 417–418). As the Court reasoned,
“The elements of a cause of action for fraud are a representation concerning a material fact, falsity of that representation, scienter, reliance and damages. Plaintiff must show not only that he actually relied on the misrepresentations, but also that such reliance was reasonable. Where a party has the means to discover the true nature of the transaction by the exercise of ordinary intelligence, and fails to make use of the those means, he cannot claim justifiable reliance of defendant's misrepresentations.
The parties here disagree as to whether Politis ever promised an 8% return.Moreover, Politis argues that plaintiffs knew or should have known that the figures in the offering materials were merely future projections subject to change as the details of the project changed, not guaranteed figures. Yet, even if we assume that Politis made all of the disputed statements and intended to induce reliance thereupon, plaintiffs have failed to state a fraud claim because they cannot show that their alleged reliance was justified. Plaintiffs were relatively sophisticated investors who should have understood the risks of investing in a real estate venture without conducting a “due diligence” investigation or consulting their lawyers and accountants.” ( Id. At 417–418; emphasis added and citations omitted).
Similarly, in Global Minerals and Metals Corp. v. James W. Holme, 35 AD3d 93 (1st Dept.2006), the First Department affirmed the dismissal of plaintiff's fraudulent inducement claim. The Court held that since plaintiff had information at its disposal before entering into the agreement at issue which provided plaintiff “with more than a hint of the falsity of [defendant's] representation” ( id. at 100), no issue of fact was present “with respect to Global's claim of fraudulent inducement since the evidence establishes that its reliance on such alleged misrepresentations was unreasonable, and that Global failed to fulfill its duty to investigate.” ( Id. at 99). As the Court stated,
“[W]hen the party to whom a misrepresentation is made has hints of its falsity, a heightened degree of diligence is required of it. It cannot reasonably rely on such representations without making additional inquiry to determine their accuracy. When a party fails to make further inquiry or insert appropriate language in the agreement for its protection, it has willingly assumed the business risk that the facts may not be as represented.” ( Id. at 100; citations omitted).
See also, e.g., Rodas v. Manitaras, 159 A.D.2d 341, 343 (1st Dept.1990) ( “[W]here, as here, a party has been put on notice of the existence of material facts which have not been documented and he nevertheless proceeds with a transaction without securing the available documentation ... he may truly be said to assume the business risk that the facts may not be as represented. Succinctly put, a party will not be heard to complain that he has been defrauded when it is his own evident lack of due care which is responsible for his predicament.”); New York City School Construction Auth. v. Koren–DiResta Construction Co., Inc. 249 A.D.2d 205 (1st Dept.1998); Travelers Indemity Company v. Flushing National Bank, 90 Misc.2d 964, 973 (Sup.Ct. Queens Co.1977) (Plaintiff's fraud claim held meritless since it “ignores the duty defendant had to make inquiry” when plaintiff had knowledge of facts that should had led it to investigate before entering into the transaction at issue).
The Supreme Court matrimonial case of Monahan v. Monahan, 2 Misc.3d 1011(A), 2004 WL 869592, 2004 N.Y. Slip op. 50296(U) (Sup. Ct ., Nassau Co.2004) is also instructive. In Monahan, the parties placed a stipulation of settlement on the record in open court before Justice Dunn in August, 2003 which settled a plenary action brought by Plaintiff to set aside the original April 2001 stipulation of settlement between the parties. Plaintiff then brought a plenary action in September 2003 to set aside the August 2003 stipulation, claiming that it was “the product of the defendant's material misrepresentation of the value of his annuity and the amount of income he was receiving in social security disability benefits.” As a result of the August 2003 stipulation, plaintiff had agreed to a reduction of defendant former husband's maintenance payments to her and to accept a lump sum distribution for defendant's labor union annuity of $180,000.00. Plaintiff alleged that defendant's counsel represented to her counsel during settlement negotiations that he believed that defendant's union annuity was worth $280,000.00 and that his disability payments were approximately $1,400.00 per month. In fact, Plaintiff learned that defendant's annuity was worth over $290,000.00 and his disability payments were $1,800.00 per month. Plaintiff alleged that defendant thus misrepresented the value of the annuity and disability payments and had she known their actual value, she would have refused to enter into he stipulation. The Court granted defendant's motion to dismiss, holding that plaintiff did not allege and could not prove at least one essential element of a claim of fraud or misrepresentation: that she had or could justifiably rely on the allegedly false statements made to her.
In dismissing the complaint, the Court first noted that the “law is well settled that open-court stipulations are judicially favored” and will be enforced according to their terms “unless there is proof of fraud, duress, overreaching or unconscionability.” The Court first dismissed plaintiff's allegations of duress, overreaching and unconscionability as a matter of law. The Court then proceeded to analyze plaintiff's fraud claim. After listing the well-settled elements that the proponent of any fraud claim must prove: “misrepresentation of a material fact; 2)scienter; 3) justifiable reliance, and 4) damages”, the Court focused on the third element—justifiable reliance—and found plaintiff's claim wanting. The Court held that even if the statements by defendant's attorney to plaintiff's counsel could be deemed to have misrepresented certain facts, plaintiff was not justified in relying upon them since she had manifest opportunity to ascertain their veracity, or lack thereof, but nonetheless close to proceed with the stipulation. As the Court held:
“[T]he Court finds as a matter of law, that even if the defendant's attorney made misrepresentations to plaintiff's attorney during the course of courthouse negotiations, concerning the value of the annuity or the amount of the disability benefits, the plaintiff was not justified in relying on said representations. The defendant did not conceal the annuity or his disability income, The plaintiff contends only that their values were misrepresented. If the plaintiff believed said misrepresentations were so material such that she would not have entered into the stipulation but for said representations, she had the option of seeking an adjournment to afford her the opportunity to confirm said values, or she could have required a representation on the record with regard to same.” (Emphasis added).
Similarly, in the Appellate Division case of McGovern v. T.J. Best Building and Remodeling, Inc. 245 A.D.2d 925, 927–928 (3d Dept.1997), the Third Department affirmed the lower court's grant of summary judgment dismissing plaintiff's complaint for fraud in the inducement in the context of a real estate purchase and construction contract. The Court held that plaintiff could not show that he justifiably relied upon defendant's alleged misrepresentations since plaintiff could have, and should have, investigated and determined for himself whether statements by defendant were accurate or not. As the Court stated,
“[A]s for plaintiffs' claim that Furey misrepresented the projected taxes on the parcels and, with respect to the McGoverns, misrepresented whether a particular item was included in the price of the contract, we need note only that plaintiffs cannot justifiably rely upon representations made with respect to these or any other matters that, through the exercise of ordinary intelligence, they could have ascertained the veracity of on their own. (Emphasis added).
And in Cohen v. Colistra, 233 A.D.2d 542, 543 (3d Dept.1996), the Third Department reversed the lower court and granted summary judgment dismissing defendants' claims of fraud in the context of plaintiff's action on a mortgage note relating to the purchase of residential property. The Court held that defendants had an adequate opportunity to investigate the accuracy of the alleged misrepresentations and therefore could not be said to have reasonably relied upon them. As the Court reasoned,
“[E]ven accepting as true defendants' allegations as to the representations made by plaintiffs—namely, that there was an adequate water supply available, as well as another viable well site if needed, that the roof and residence itself were in good repair and that the tax assessment on the property would not increase following the sale— all of the deficiencies that defendants have alleged in this regard could have been discovered by routine investigation. More specifically, a water flow test could have been performed, as well as a structural inspection of the residence, and a telephone call to the county assessor could have verified the tax assessment. Finally, there is nothing in the record, save defendants' conclusory and unsubstantiated assertion, to suggest that defendants had an inadequate amount of time to undertake such efforts or that plaintiffs in any manner prevented them from doing so ... Accordingly, plaintiffs' motion for summary judgment on their complaint should have been granted.” (Emphasis added; citations omitted).
Applying the principles articulated in cases such as Silver, Global, Monahan and Cohen to the instant case, it is clear that F. C.'s claim of fraudulent inducement does not pass muster. As the facts adduced at the Hearing show, F.C. has not sustained his burden of proving that he “justifiably relied” on R. B.'s alleged misrepresentations regarding her and her husband's income and assets. Here, as in Monahan, Global, and Cohen, even assuming arguendo that R. B.'s statements contained in the body of the Net Worth Statement concerning the income and assets of the Bs were false—even intentionally so—F.C. had a more than sufficient opportunity to investigate the accuracy of those figures and evaluate for himself whether or not they were true. Moreover, similar to the plaintiffs in Global and Silver, in the instant case F.C. was even given a document before he entered into the Stipulation—part of the very Net Worth Statement on which he purports to rely—which could be read to contradict the statements of assets and income contained in the body of the Statement itself. That document—the Attachment to the Net Worth Statement—at the very least, could have, and indeed should have, prompted him “through the exercise of ordinary intelligence” ( Stuart Silver, 245 A.D.2d at 417) to independently question and investigate the items in the body of the Statement that appeared to be at odds with the Attachment. The fact that F.C. nonetheless chose to proceed and enter into the Stipulation while armed with this information undermines any claim of justifiable reliance and dooms his motion to dismissal.
Indeed, the additional fact that F.C. knew—apparently from the Bs prior years' tax returns—before he agreed to the Stipulation, that the Bs had 2002 and most likely 2003 income substantially greater than the 2004 statement of income reflected in the body of the Net Worth Statement, and despite such knowledge, F.C. nonetheless proceeded with the Stipulation, lends an air of disingenuousness to his assertion of fraud (See discussion infra, pp. 6–7). In any event, even absent knowledge of the Bs' 2002 or 2003 income, in light of the Attachment to the Net Worth Statement with which he was admittedly provided by R. B., F.C. clearly failed to establish an essential element of his claim that he was fraudulently induced to enter into the Stipulation—the element of justifiable reliance. Accordingly, his effort to vacate the Stipulation proves unavailing.
Parenthetically, the Court notes that, as mentioned above, at the Hearing and in his post-hearing submission, F.C. cataloged several other ways—some trivial, some more substantial than others—in which R.B. allegedly understated her and her husband's assets as set forth in the body of the Net Worth statement. However, this exercise proves futile and merely represents an attempt by F.C. to evade the salient and determinative fact: that he was provided, at the same time, with facts that at once contradicted the alleged bare bones statements of assets and income on which he purportedly relied, and was consistent with his prior understanding of R. B.'s financial position. These facts—including R. B.'s pay stub and Alan B.'s Compensation Report attached to the Net Worth Statement—revealed substantial 2004 income of the Bs. Such a large discrepancy between the amount set forth in the body of the Statement and the Attachments in so vital an aspect of Defendant's financial condition as income would, in the mind of a “person of ordinary intelligence,” call into question the accuracy of other statements of assets and income, and thereby trigger a duty to investigate with respect to those entries as well. The fact that F.C. apparently failed to do vitiates his fraud claim in its entirety. Cases such as Global and Silver so hold. (See discussion infra, pp 11–14). As the evidence adduced plainly shows, F.C. has simply failed to sustain his burden of proof on the critical element of justifiable reliance.
By the same token, the evidence adduced at the Hearing failed to support another essential element of F. C.'s fraud claim: R. B.'s intent to deceive. Any such intent by R.B. is contradicted by her voluntary inclusion with her Net Worth Statement of documents—the Attachments to it—which, upon even a cursory examination, provide more than adequate information concerning her husband's and the couple's joint income. This Attachment, together with R. B.'s uncontradicted testimony that she was confused regarding whether the questions in the body of the Statement required her to reveal combined assets or hers alone, effectively vitiates the intent element necessary to sustain F. C.'s claim.
Finally, the Court notes that F. C.'s belated attempt toward the conclusion of the Hearing to evade the consequences of his failure to inquire and R. B.'s lack of intent to deceive by claiming that the Attachment was not part of the original Net Worth Statement submitted to him in 2004 is of little moment and is belied by F. C.'s own statements at the Hearing, in documents that he previously submitted to this Court, and by his evident position before Referee Synder during the Synder Hearing. At the Hearing in this case, F.C. identified a copy of the Net Worth Statement, which included the Attachments, as “Plaintiff's Exhibit 4(sic) which is a copy of Mrs. B.'s May 3rd 2004 statement of net worth ... the original exhibit from the original hearing.” (Dec. 20, 2011 Hearing Tr., p. 13). F.C. also noted at the time that “this exhibit was admitted into evidence before court attorney referee Rennie Snyder without objection.” ( Id.).
In addition, in his 2009 decision, Referee Synder describes the “Compensation Report” page of the Attachments and F. C.'s position with respect to it, and nothing in the Snyder Decision reflects any claim by F.C. that the Attachments were missing from the Net Worth Statement at the time it was provided to him in 2004. To the contrary, before Referee Synder, F.C. evidently referred to the Attachments as further purported evidence of fraud since they reflected a much greater R.B. income than that set forth in the body of the Statement. (See Snyder Dec., Pl. Hearing Exh. 8, p. 42). F.C. thus effectively conceded that the Attachments were indeed part of the Net Worth Statement. Moreover, the Net Worth Statement that F.C. attached to his 2009 affidavit in support of the instant motion has the Attachments annexed to and included in it (See Exh. H to F.C. Affid. in support of the instant motion, Pl. Hearing Exh. 3). And, the testimony of both R.B. and William Martin (her attorney at the Snyder Hearing) during the instant Hearing indicates that the Net Worth Statement as originally presented to F.C. contained the Attachments. In any event, F.C. manifestly failed to sustain his burden of proving the absence of the Attachments from the Net Worth Statement, a failure that mandates dismissal of his claim of fraud for the reasons discussed above.
Conclusion
Thus, F.C. failed to sustain his burden of proving two of the four essential elements to his fraud claim: his justifiable reliance and R. B.'s intent to deceive. Accordingly, F. C.'s attempt to vacate the Stipulation proves unavailing. In light of the Court's decision on this issue, F. C.'s application for the affirmative relief of attorney fees, forensic evaluation fees and fees for the attorney for the child falls of its own weight.
By reason of the foregoing, Plaintiff's motion is denied in all respects.
The foregoing constitutes the Decision and Order of this Court.