Appellate Division, 2d Department, Unanimously Affirms Dismissal of Fraud Claims Against BPS Client

April 2014

By unanimous Decision and Order dated March 19, 2014, the Appellate Division affirmed the Order of the Supreme Court, Westchester County (Loehr, .J) entered on June 5, 2012, which granted the oral motion of the defendant Marlene Magarelli, executor of the estate of Isaac G. Sargiss, and the separate oral motion of the defendants Julius Sargiss, brother of Isaac, and Panrad Automotive Industries, Inc. pursuant to CPLR 4401, made at the close of the plaintiff’s case after a nonjury trial, for judgment as a matter of law dismissing the complaint against them as a matter of law.

The plaintiff, Frieda Sargiss, was the divorced widow of Isaac Sargiss who passed away in California in 2004. The couple had entered into a divorce agreement in New York in 1996.  Following Isaac’s death, his widow claimed that a variety of financial documents found in her late ex-husband’s residence showed that he had made fraudulent misrepresentations concerning his assets at the time of the divorce, thus preventing the plaintiff from receiving her fair equitable distribution.  She filed an action seeking damages for the alleged fraud.   Following the presentation of her case, the defendants made their motions for dismissal as a matter of law.  The trial court agreed with the defendants finding that plaintiff had produced nothing more than “circumstantial evidence” and utterly failed to prove her case under the required standard of “clear and convincing” evidence to establish fraud.

The Appellate Division concurred, affirming the dismissal, noting that “A trial court’s grant of a CPLR 4401 motion for judgment as a matter of law is appropriate where the trial court finds that, upon the evidence presented, there is no rational process by which the fact trier could base a finding in favor of the nonmoving party.”  In this case the Appellate court found that indeed there was no rational process by which the trial judge could have concluded that the plaintiff reasonably or justifiably relied on the misrepresentations her now deceased former husband allegedly made during the divorce action, in particular as regarding the sale of a share of one of his business entities to his brother, which occurred six years before the divorce action.

William Hughes Mulligan, Jr., a member of Bleakley Platt & Schmidt LLP since 1985, tried the case and argued the appeal on behalf of the executor defendant, Marlene Magarelli. Click here for the full decision.