Court Rejects Fraud Claim—Plaintiffs Were Obligated to Conduct Due Diligence—Reliance Was Not Reasonable—No Evidence That Defendant Impeded Plaintiffs’ Ability to Investigate the Truth
The plaintiffs had alleged that the defendant had committed fraud in connection with the purchase of a building. The defendant had arranged for the purchase through an entity which was owned 60 percent by the plaintiffs and 40 percent by the defendant. The plaintiffs alleged that the defendant had understated the cost of necessary renovations and had failed to disclose structural and foundational defects reflected in engineering reports and building code violations (violations). The parties had previously entered into a general release (release) as part of a “Governance Agreement” (agreement). The court found that the fraud claim was barred by the release.
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