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Fraudulent Concealment / Fraudulent Misrepresentation Claims Dismissed as Equivalent to Spoliation Claim Prohibited in New York

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From IDT Corp. v. Morgan Stanley Dean Witter & Co., 2008 N.Y. Misc. LEXIS 2721 (Sup. Ct. New York County, April 4, 2008):

This Court is constrained to follow Ortega v. City of New York, and find that these causes of action for fraud and fraudulent concealment are essentially third party spoliation claims. Spoliation has been defined as "the intentional destruction, mutilation, alteration, or concealment of evidence, [usually] a document" (MetLife Auto & Home v. Joe Basil Chevrolet, Inc., 303 AD2d 30, 33-34, 753 N.Y.S.2d 272 [4th Dept 2002], affd 1 NY3d 478, 807 N.E.2d 865, 775 N.Y.S.2d 754 [2004] [quoting Black's Law Dictionary 1409 [7th ed 1999]]). Here, IDT's claims revolve around Morgan Stanley's concealment of documents responsive to a subpoena served in the underlying arbitration. These allegations fall within that definition of spoliation (id.). Contrary to IDT's argument, spoliation is not just alteration and destruction of evidence. The definition includes concealment. The fact that IDT has framed the claim that Morgan Stanley's concealment of and failure to produce documents as a fraudulent misrepresentation does not take it out of the rules regarding spoliation of evidence claims. Otherwise, a party could easily circumvent the rule against independent spoliation claims by simply asserting fraud or fraudulent concealment. The claims relate to an abuse of discovery, the concealment or withholding of evidence, which occurred in a previous proceeding, and are barred (see Ortega, 9 NY3d at 83, 876 N.E.2d 1189, 845 N.Y.S.2d 773; see also Temple Cmty. Hosp. v. Superior Court, 20 Cal 4th 464, 472-73, 84 Cal. Rptr. 2d 852, 976 P2d 223, 226-229 [Cal 1999] [no tort claim for concealment or withholding evidence]).

Claims dismissed. Compare our post of April 26, 2008 (Conversion as Potential Substitute for Spoliation Claim in New York).

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New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.
New York Attorneys JHA handles range the gamut of complex financial and commercial litigation and arbitration, including securities, RICO, corporate and contract disputes, credit default swaps, derivatives, and class, mass, and derivative actions. The firm also represents law firms in major disputes.

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