What did the court decide?

The appellate court reversed the lower court and dismissed the plaintiff's fraud claim against the seller, because the contract documents show the buyer could not reasonably rely on the alleged misrepresentations and the complaint failed to plead fraud properly.

Who is affected by this decision?

The immediate effect is on the buyer-plaintiff (ABJ 105 LLC), whose complaint was dismissed; the seller (Martinez) prevailed and will not be held liable on this claim.

Why did the contract wording matter?

The merger clause and "as is" terms incorporated the closing schedule showing actual rents, which contradicted the buyer's allegation and barred a claim based on inconsistent statements.

Can the plaintiff appeal again?

The decision is by the Appellate Division; the plaintiff could seek permission to appeal to the Court of Appeals but would need to show an issue of law appropriate for further review.

ABJ 105 LLC v. Martinez

Docket Index No. 650810/23|Appeal No. 6386|Case No. 2024-05959|

Court of record · Indexed in NoticeRegistry archive · AI-enriched for research

CivilReversed

Filed: Apr 16, 2026 · 2 weeks ago
Jurisdiction: New York
Court: Appellate Division of the Supreme Court of the State of New York
Type: Opinion
Case type: Civil
Disposition: Reversed
Citation: 2026 NY Slip Op 02327
Docket numbers: Index No650810/23Appeal No6386Case No2024-05959

Appeal from denial of defendant's CPLR 3211 motion to dismiss a fraudulent-inducement complaint in a real-property purchase action

Summary

The First Department reversed Supreme Court's denial of defendant's motion to dismiss a fraudulent inducement complaint and granted the motion. Plaintiff claimed defendant lied about tenants and rents when selling Manhattan property, but documentary evidence in the closing binder (schedule 8.1(k)) and the purchase agreement terms (including a merger clause and an "as is" purchase) conclusively refuted reliance. The court also held that, even absent those documents, the complaint failed to plead all elements of fraudulent inducement with sufficient particularity, so dismissal was required.

Issues Decided

Whether documentary evidence in the closing binder and the parties' purchase agreement conclusively refute plaintiff's claim of fraudulent inducement
Whether the merger clause and the buyer's agreement to purchase the property "as is" bar a fraud claim based on alleged misrepresentations about tenants and rents
Whether the complaint adequately pleaded the elements of fraudulent inducement with the required particularity

Court's Reasoning

The court found that schedule 8.1(k), incorporated into the purchase agreement by a merger clause, contradicted plaintiff's allegation that no rent had ever been paid, so the documentary record conclusively refuted reasonable reliance and warranted dismissal under CPLR 3211(a)(1). The agreement's "as is" and merger provisions further barred a claim based on reliance on alleged oral or inconsistent statements. Independently, the pleading failed to allege all elements of fraud with sufficient specificity, so dismissal was also proper under CPLR 3211(a)(7).

Authorities Cited

CPLR 3211CPLR 3211(a)(1), (a)(7)
Eurycleia Partners, LP v Seward & Kissel, LLP12 NY3d 553 (2009)
Suber v Churchill Owners Corp.228 AD3d 414 (1st Dept 2024)
Dille v Zoelle LLC220 AD3d 409 (1st Dept 2023)
Facebook, Inc. v DLA Piper LLP (US)134 AD3d 610 (1st Dept 2015), lv denied 28 NY3d 903 (2016)

Parties

Plaintiff: ABJ 105 LLC
Defendant: Gladys Martinez
Attorney: Oved & Oved LLP (Jonathan A. Lynn, of counsel) for appellant
Judge: Nicholas W. Moyne (Supreme Court)
Judge: Moulton, J.P.
Judge: Scarpulla, J.
Judge: Shulman, J.
Judge: Rodriguez, J.
Judge: Michael, J.

Key Dates

Appellate decision date: 2026-04-16
Supreme Court order entered: 2024-08-16
Index filing year: 2023-01-01

What You Should Do Next

1
Consider petition for leave to appeal
Plaintiff may consult counsel about seeking permission to appeal to the New York Court of Appeals and whether any substantial legal issue warrants that petition.
2
Entry of judgment
Clerk to enter judgment reversing the Supreme Court order and granting defendant's motion to dismiss; parties should confirm the judgment is entered as directed.
3
Assess other claims or remedies
Plaintiff should review whether any other independent causes of action survive or whether factual amendments could cure pleading defects before pursuing further litigation.

Frequently Asked Questions

What did the court decide?: The appellate court reversed the lower court and dismissed the plaintiff's fraud claim against the seller, because the contract documents show the buyer could not reasonably rely on the alleged misrepresentations and the complaint failed to plead fraud properly.
Who is affected by this decision?: The immediate effect is on the buyer-plaintiff (ABJ 105 LLC), whose complaint was dismissed; the seller (Martinez) prevailed and will not be held liable on this claim.
Why did the contract wording matter?: The merger clause and "as is" terms incorporated the closing schedule showing actual rents, which contradicted the buyer's allegation and barred a claim based on inconsistent statements.
Can the plaintiff appeal again?: The decision is by the Appellate Division; the plaintiff could seek permission to appeal to the Court of Appeals but would need to show an issue of law appropriate for further review.

The above suggestions and answers are AI-generated for informational purposes only. They may contain errors. NoticeRegistry assumes no responsibility for their accuracy. Consult a qualified attorney before relying on them.

Full Filing Text

ABJ 105 LLC v Martinez - 2026 NY Slip Op 02327

ABJ 105 LLC v Martinez

2026 NY Slip Op 02327

April 16, 2026

Appellate Division, First Department

ABJ 105 LLC, Plaintiff-Respondent,

v

Gladys Martinez, Defendant-Appellant.

Decided and Entered: April 16, 2026

Index No. 650810/23|Appeal No. 6386|Case No. 2024-05959|

Before: Moulton, J.P., Scarpulla, Shulman, Rodriguez, Michael, JJ.

Oved & Oved LLP, New York (Jonathan A. Lynn of counsel), for appellant.

Order, Supreme Court, New York County (Nicholas W. Moyne, J.), entered on or about August 16, 2024, which denied defendant's motion to dismiss the complaint, unanimously reversed, on the law, without costs, and defendant's motion granted. The Clerk is directed to enter judgment accordingly.

Plaintiff seeks to hold defendant liable for allegedly fraudulently inducing it to purchase real property in Manhattan. At the closing, defendant executed a certification concerning six apartments in the property, swearing that "no rent has ever been paid by the occupants" of the apartments, and alleging that the occupants of the apartments "are not tenants." However, schedule 8.1(k) in the closing binder set forth the "actual rents billed by [defendant] to the tenants of the premises."

Supreme Court should have dismissed the complaint, as the documentary evidence conclusively refutes the cause of action for fraudulent inducement (
see
CPLR 3211[a][1]). The parties' purchase and sale agreement contained a merger clause, which incorporated the terms of schedule 8.1(k) into the agreement. Further, plaintiff agreed to purchase the property "as is" and "where is." These terms in the parties' agreement bar plaintiff's claim arising out of reliance on the purported misrepresentations (
see

Suber v Churchill Owners Corp.
, 228 AD3d 414, 415 [1st Dept 2024];
Dille v Zoelle LLC
, 220 AD3d 409, 410 [1st Dept 2023]).

Even if the complaint were not barred by the documentary evidence, it should still have been dismissed, as it fails to sufficiently plead all the elements of a cause of action for fraudulent inducement (
see
CPLR 3211[a][7];
Eurycleia Partners, LP v Seward & Kissel, LLP
, 12 NY3d 553, 559 [2009];
Facebook, Inc. v DLA Piper LLP [US]
, 134 AD3d 610, 615 [1st Dept 2015],
lv denied
28 NY3d 903 [2016]).
THIS CONSTITUTES THE DECISION AND ORDER
OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.

ENTERED: April 16, 2026