Opinion
October 8, 1987
Appeal from the Supreme Court, Ulster County (Connor, J.).
The underlying action seeks recovery of the balance due on promissory notes given by defendants to plaintiff as part payment of the purchase price for plaintiff's machine shop business. Defendants William M. Saponaro and Daniel O'Connor have defaulted. Following a nonjury trial, Supreme Court dismissed the complaint based upon the defense by defendant Louis M. Klein (hereinafter defendant) of fraud in the inducement.
On this appeal, plaintiff contends that defendant failed to prove the elements constituting fraud. To prevail, defendant has the burden of demonstrating by clear and convincing evidence (see, Mix v. Neff, 99 A.D.2d 180, 183) five elements of fraud, consisting of "a representation of fact, which is either untrue and known to be untrue or recklessly made, and which is offered to deceive the other party and to induce [him] to act upon it, causing injury" (Jo Ann Homes at Bellmore v. Dworetz, 25 N.Y.2d 112, 119; accord, Chase Manhattan Bank v. Perla, 65 A.D.2d 207, 209-210; 24 N.Y. Jur, Fraud and Deceit, § 14, at 47-48 [1962]). Put in other words, the elements are representation of a material existing fact, falsity, scienter, deception and injury (Channel Master Corp. v. Aluminium Ltd. Sales, 4 N.Y.2d 403, 407). Review of Supreme Court's findings of fact must be in a light most favorable to sustain the judgment, which we will not disturb unless it is against the weight of the evidence or contrary to law (see, Merrill Transp. Co. v. State of New York, 97 A.D.2d 921).
The testimony offered by defendant showed that plaintiff represented that Numerich Arms Corporation was his largest customer and that defendants would have no problem securing ample work from Numerich after the purchase. Plaintiff took O'Connor to the Numerich plant several times where he showed O'Connor which jobs were profitable. Defendants relied upon these representations. However, at this time, as testified to by Ira Trast, an officer of Numerich, plaintiff's business with Numerich was "almost nonexistent" due to several factors including the inferior quality of plaintiff's workmanship. In addition, plaintiff was indebted to Numerich and stated that he would be able to pay his debt out of the proceeds of the sale to defendants. Plaintiff offered no proof to counter or oppose the testimony of defendants' witnesses.
We find defendant's proof to be clear and convincing and sufficient to support Supreme Court's determination that plaintiff knowingly misrepresented the true value of the business in order to induce defendants to purchase the business, and that such misrepresentation of a material fact, relied upon by defendants, negated the consideration for which the promissory notes were given. Contrary to plaintiff's contention, the representations were neither merely expressions of opinion which proved to be false at a future time (see, Chase Manhattan Bank v Perla, supra, at 210), nor prophecy and prediction of something hoped or expected to occur in the future (Channel Master Corp. v. Aluminium Ltd. Sales, supra, at 408).
Having so found, it is unnecessary to consider the parties' remaining contentions.
Judgment affirmed, with costs. Kane, J.P., Main, Weiss, Yesawich, Jr., and Levine, JJ., concur.