Title: Arfa, et al. v. Zamir, et al.

State: new-york

Issuer: New York Appellate Court

Document:

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This memorandum is uncorrected and subject to revision before
publication in the New York Reports.
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No. 92  
Rachel L. Arfa, et al.,
            Appellants,
        v.
Gadi Zamir, et al.,
            Respondents,
Eli Mor, et al.,
            Defendants.
(And Other Actions.)
David J. Katz, for appellants.
Eric B. Levine, for respondents.
MEMORANDUM:
The order of the Appellate Division should be affirmed,
with costs, and the certified question answered in the
affirmative.
In June 2005, plaintiffs Rachel Arfa and Alexander
Shpigel executed a general agreement with defendant Gadi Zamir
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No. 92
regarding management of their real estate business.  The
agreement contained a provision in which each party released the
others and their related entities from, "any and all claims,
demands, actions, rights, suits, liabilities, interests and
causes of action, known and unknown, which they have ever had,
have or may now have, which in any way pertain to or arise from
any matters, facts, occurrences, actions or omissions which
occurred prior to" the date of the contract.  This general
release, which plaintiffs allege was part of a negotiated
agreement meant to ease an antagonistic relationship and keep
Zamir "from destroying the value of the real estate portfolio,"
prevents plaintiffs from now bringing an action for fraud based
on misrepresentations predating it.
Plaintiffs have failed to allege that the release was
induced by a separate fraud (see Centro Empresarial Cempresa
S.A., et. al. v América Móvil, S.A.B. de C.V., et al., ___ NY3d
___ [decided ____ ]).  Additionally, they have failed to allege
that they justifiably relied on Zamir's fraudulent misstatements
in executing the release.  By their own admission, plaintiffs,
who are sophisticated parties, had ample indication prior to June
2005 that defendant was not trustworthy, yet they elected to
release him from the very claims they now bring without
investigating the extent of his alleged misconduct (see Centro,
____ NY3d at ___; DDJ Mgt., LLC v Rhone Group L.L.C., 15 NY3d
147, 153-154 [2010]).  Dismissal of plaintiffs' fraud cause of
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No. 92
action is therefore appropriate.
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Order affirmed, with costs, and certified question answered in
the affirmative, in a memorandum.  Chief Judge Lippman and Judges
Ciparick, Graffeo, Read, Smith, Pigott and Jones concur.
Decided June 7, 2011
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