KNK ENTERPRISES INC v. HARRIMAN ENTERPRISES INC (2006)

In an action to recover damages for fraud, the defendants appeal from a judgment of the Supreme Court, Nassau County (Peck, J.), entered December 3, 2004, which, after a nonjury trial, is in favor of the plaintiff and against them in the principal sum of $77,500.

ORDERED that the judgment is reversed, on the law, with costs, and the complaint is dismissed.

 To prevail on a claim of fraud, a plaintiff must show that it actually relied on the purported fraudulent statements and that its reliance was reasonable or justifiable (see Harris v. Camilleri, 77 A.D.2d 861, 863, 431 N.Y.S.2d 65).   A party cannot claim reliance on a misrepresentation when he or she could have discovered the truth with due diligence (see East 15360 Corp. v. Provident Loan Socy. of N.Y., 177 A.D.2d 280, 575 N.Y.S.2d 856).   Here, the plaintiff, who was represented by counsel, decided to proceed with the transaction, despite knowing that it had not received full information concerning the transaction;  thus its reliance cannot be considered reasonable or justifiable.

In light of our determination, we need not address the parties' remaining contentions.