Worthy of reading is a new, thorough and instructive decision addressing a number of aspects on the law of civil fraud rendered by the United States Court of Appeals for the Second Circuit in Meyer v. Seidel, Docket No. 21-221, decided December 21, 2023.
While relevant New York State court decisions have fleshed out the law quite well, if the case is pending in federal court, it is always preferable to rely on and cite federal decisions interpreting the applicable New York substantive law. And, of course, the Second Circuit is the best, most authoritative source in New York. So the Meyer decision is worth reviewing and saving for future use if the relevant issues arise in a federal case.
In Meyer, the Second Circuit confirmed that the “discovery” rule for extending the statute of limitations does not apply to claims of negligent misrepresentation, breach of warranty or rescission based upon alleged mutual mistake of fact. The Second Circuit clarified, however, that for claims of actual fraud, for which the discovery rule does apply, the duty of the fraud claimant to investigate and use diligence to uncover fraud is triggered when the circumstances “suggest to a person of ordinary intelligence that it is probable—i.e., more likely than not—and not merely possible that (a) he has been defrauded and (b) by the defendant.” (Emphasis added.)
Read the full blog here.