1991, he retained Caron over employees with more seniority, over
the objection of others at Travelers. (Tr. 427). At some point,
Simone tried to help Caron find another position within
In December 1991, Travelers advised Caron that his position
would be eliminated; his last day of employment was February 3,
1992. (Tr. 124).
Caron looked for a new job for approximately a year and a half;
he met with some sixty people; and he wrote 150-300 letters. He
was unable, however, to find new employment; as he put it, he
"had absolutely no luck." (Tr. 125).
Caron filed this diversity case on August 16, 1996, alleging
fraudulent inducement and seeking compensatory and punitive
damages. After the close of discovery, Travelers moved for
summary judgment dismissing the complaint and I denied the
motion. Caron v. The Travelers Corp., No. 96 Civ. 6236(DC),
1998 WL 395319 (S.D.N.Y. July 15, 1998).
Caron argues that Travelers defrauded him by making material
misrepresentations and omitting material information.
Specifically, Caron contends that: (1) Travelers misrepresented
to him that it had approved an "appeals project" that involved
the consolidation of all of Travelers's appeals in a separate,
centralized appellate office; (2) Travelers failed to disclose
that it had not made a decision to consolidate and centralize its
appellate litigation in a separate appeals office; (3) Travelers
failed to disclose to Caron that his employment was part of a
test project and that he would have to solicit work from other
SLOs and the Claims Department; (4) Travelers failed to disclose
the role of the Claims Department; and (5) Travelers failed to
disclose that it was experiencing financial difficulties.
The case was tried to a jury on December 14-18, 1998. At the
close of Caron's case, Travelers moved for judgment as a matter
of law. I granted the motion with respect to Caron's claim for
punitive damages and otherwise reserved decision. The jury
returned a verdict on December 18, 1998 in favor of plaintiff.
The jury found that Travelers had "fraudulently induced" Caron to
leave his position with DOJ to accept the position with
Travelers. The jury awarded Caron damages of $250,000 for
economic loss and zero damages for noneconomic loss.
These motions followed.
A. Applicable Legal Standards
1. Rule 50 Motions
A motion pursuant to Fed.R.Civ.P. 50 for judgment as a matter
of law "may be granted only `when[,] "drawing all reasonable
inferences regarding the weight of the evidence and the
credibility of witnesses in favor of [the non-movant], a
reasonable jury could only have found for the [movant]."'" Kim
v. Hurston, 182 F.3d 113, 117 (2d Cir. 1999) (quoting Vermont
Plastics, Inc. v. Brine, Inc., 79 F.3d 272, 277 (2d Cir. 1996)
(quoting In re Joint Eastern & Southern Dist. Asbestos Litig.,
52 F.3d 1124, 1131 (2d Cir. 1995))); see also Stratton v.
Department for the Aging, 132 F.3d 869, 878 (2d Cir. 1997).*fn2
Under New York law, a plaintiff alleging fraud must prove, by
convincing evidence: (1) a material misrepresentation or omission
of fact, (2) made with knowledge of its falsity, (3) with an
intent to defraud, (4) reasonable reliance on the part of the
plaintiff, and (5) injury to plaintiff. Schlaifer Nance & Co. v.
Estate of Andy Warhol, 119 F.3d 91, 98 (2d Cir. 1997); see
generally Stewart v. Jackson & Nash, 976 F.2d 86 (2d Cir. 1992)
(holding that attorney stated a claim for fraud when she was
induced, by alleged misrepresentations of fact, to leave
employment with prior law firm to join defendant law firm).
On this motion, two elements are of principal concern: intent
to defraud and reasonable reliance.
To prove intent to defraud, or scienter, a plaintiff must prove
"`a reckless indifference to error,' `a pretense of exact
knowledge,' or (an) assertion of a false material fact
"susceptible of accurate knowledge" but stated to be true on the
personal knowledge of the representer.'" Slotkin v. Citizens
Casualty Co., 614 F.2d 301, 314 (2d Cir. 1979) (quoting and
citing New York cases). To succeed on a claim for fraudulent
omission, a plaintiff must show by clear and convincing evidence
that the defendant was "more than negligent in [its] failure to
disclose material facts." Allen v. Westpoint-Pepperell, Inc.,
11 F. Supp.2d 277, 288 (S.D.N.Y. 1997); accord Corcoran v. New
York Power Auth., No. 95 Civ. 5357(DLC), 1997 WL 603739, at *8
(S.D.N.Y. Sept. 29, 1997) (to prove fraud, plaintiff had to show
"a willful intent to harm" plaintiff); Board of Educ. v.
Sargent, Webster, Crenshaw & Folley, 146 A.D.2d 190,
539 N.Y.S.2d 814, 820 (3d Dep't 1989) (to establish fraudulent
concealment, there must be clear and convincing evidence of
"deceptive purpose"); Caban v. Gottlieb Iron Works, 147 Misc.2d 583,
558 N.Y.S.2d 810, 813 (N.Y.Sup. 1990) (plaintiff must prove
"intent to deceive or harm" plaintiff).
The issue of reasonable reliance is a "nettlesome" one.
Schlaifer Nance, 119 F.3d at 98. The relative sophistication of
the parties is an important consideration. See id. ("The
parties involved in this litigation are not widows or orphans.").
In addition, if the plaintiff "has the means of knowing, by the
exercise of ordinary intelligence, the truth, or the real quality
of the subject of the representation, he must make use of those
means, or he will not be heard to complain that he was induced to
enter into the transaction by misrepresentations." Mallis v.
Bankers Trust Co.,