DiGennaro, Belous and Biscone Win Appeal on Novel Issue of Law

November 14, 2017 | Janice J. DiGennaro | Todd Belous | Merril S. Biscone | Professional Liability

Janice DiGennaro, Todd Belous and Merrill Biscone received a victory in the Appellate Division, First Department, dismissing third-party claims for contribution in a mass fraud and Judiciary Law action involving hundreds of phen-phen plaintiffs against their mass tort lawyer.  The basis for the dismissal is an issue of first impression in the state court in which the Appellate Division concluded that where a defendant alleges, as an affirmative defense, the knowledge of a third-party agent of the fraud alleged (in this case the third-party defendant lawyer), such affirmative defense bars the same claim in a third-party complaint.  The theory of the dismissal is that since the agent’s knowledge is imputed to the principal (under agency principals), there can never be justifiable reliance to sustain the main claim of fraud.

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