Deerfield Communications Corp. v. Chesebrough-Ponds, Inc.

• Decision Date: 13 November 1986
• Docket Number: INC,CHESEBROUGH-POND
• Citation: 68 N.Y.2d 954,502 N.E.2d 1003,510 N.Y.S.2d 88
• Parties: , 502 N.E.2d 1003 DEERFIELD COMMUNICATIONS CORPORATION, Appellant, v., et al., Respondents, et al., Defendants.
• Court: New York Court of Appeals Court of Appeals

Page 88

510 N.Y.S.2d 88

68 N.Y.2d 954, 502 N.E.2d 1003

DEERFIELD COMMUNICATIONS CORPORATION, Appellant, v. CHESEBROUGH-PONDS, INC., et al., Respondents, et al., Defendants.

Court of Appeals of New York.

Nov. 13, 1986.

[502 N.E.2d 1004] James J. Higgins, New York City, for appellant.

[68 N.Y.2d 956] Alan E. Golomb, Mineola, for respondents.

OPINION OF THE COURT MEMORANDUM.

The order of the Appellate Division, 115 A.D.2d 1016, 496 N.Y.S.2d 885, should be affirmed, with costs.

Defendant stated three counterclaims: (1) for breach of contract in failing to pay the balance due of the purchase price, (2) for breach of contract in violating geographic restrictions on resale allegedly agreed to orally, and (3) for fraud in the inducement in that plaintiff had no intention of abiding by the geographical restrictions orally agreed to. The second counterclaim was dismissed because the restrictions were not contained in the written contract and the jury returned a verdict of $170,000 on the first counterclaim and $130,000 on the third. The Appellate Division affirmed, without opinion.

The trial court properly denied plaintiff's motion to dismiss the third counterclaim. As we stated in Sabo v. Delman, 3 N.Y.2d 155, 160, 164 N.Y.S.2d 714, 143 N.E.2d 906, "a promise * * * made with a preconceived and undisclosed intention of not performing it, * * * constitutes a misrepresentation". Involved in defendant's third counterclaim, therefore, is not a mere promissory statement as to what will be done in the future (see, Channel Master Corp. v. Aluminum Ltd. Sales, 4 N.Y.2d 403, 176 N.Y.S.2d 259, 151 N.E.2d 833; Sabo v. Delman, supra ). It alleged rather "a representation of present fact, not of future intent" (Citibank v. Plapinger, 66 N.Y.2d 90, 94, 495 N.Y.S.2d 309, 485 N.E.2d 974) collateral to, but which was the inducement for the contract, and thus was neither duplicative of the second counterclaim (see, Sager v. Friedman, 270 N.Y. 472, 479, 1 N.E.2d 971) nor barred by the general merger clause contained in the contract (Danann Realty Corp. v. Harris, 5 N.Y.2d 317, 184 N.Y.S.2d 599, 157 N.E.2d 597; see, Citibank v Plapinger, supra ).

Moreover, review of the jury charge makes clear that there was no duplication of damages in the jury's awards on the first and third counterclaims. The measure of damages recoverable for being fraudulently induced to enter into a contract which otherwise would not have been made is "indemnity for [the] loss suffered through that...