CHONGQING HUANSONG INDUSTRIES GROUP CO LTD v. KINDERHOOK INDUSTRIES LLC (2024)

Order, Supreme Court, New York County (Jennifer G. Schecter, J.), entered October 2, 2023, which, insofar as appealed from as limited by the briefs, granted defendants’ motions to dismiss the claims for intentional misrepresentation with prejudice, unanimously affirmed, with costs.

Supreme Court correctly found that plaintiffs failed to allege the intentional misrepresentation causes of action against defendants with the requisite particularity (CPLR 3016[b]).  Specifically, the complaint does not plead facts sufficient to permit a reasonable inference that the alleged misrepresentations by defendants were made with knowing falsity (see Cronos Group Ltd. v. XComIP, LLC, 156 A.D.3d 54, 72, 64 N.Y.S.3d 180 [1st Dept. 2017];  FNF Touring LLC v. Transform Am. Corp., 111 A.D.3d 401, 402, 974 N.Y.S.2d 367 [1st Dept. 2013]).  The allegations of defendants’ attempts to perform on their assurances that all past and future debts of the distributor would be paid by offering payment proposals and making substantial partial payments, including approximately $18 million between October 20, 2021, and November 23, 2021, and $22 million between December 1, 2021, and January 12, 2022, do not permit a reasonable inference that defendants knowingly made false representations.  Given the failure to adequately plead scienter, these claims were properly dismissed.

Plaintiffs did not make a timely amendment as of right under CPLR 3025(a) by filing an amended complaint.  Dismissal with prejudice was properly granted in the absence of any indication of what plaintiffs would have included in an amendment to meet the relevant pleading standards with respect to scienter (see Izhaky v. Izhaky, 215 A.D.3d 588, 589, 189 N.Y.S.3d 62 [1st Dept. 2023]).

Motion for judicial notice, denied.