Civil Procedure I, Pages 403–405

Stradford v. Zurich Insurance Co.

United States District Court for the Southern District of New York, 2002

Facts:

Plaintiff was a dentist whose insurance lapsed. He got his policy reinstated by certifying that he had no claims while he was without insurance. Eight days after getting insurance, he filed a claim for $151,000 of water damage from a broken pipe. After being paid this, he revised his claim to $1,385,000 for lost business. The insurance company's investigation determined that the claim happened while plaintiff was without insurance and did not pay the remaining amount, for which plaintiff here sues. Defendants counterclaim for the initial $151,000, claiming fraud. Plaintiff claims they did not state their claims with sufficient "particularity" under Rule 9(b).

Issue:

Does defendants' counterclaim state a claim with sufficient particularity?

Rule:

Rule 9(b)

Reasoning:

Defendants' claim states sufficient facts that "give rise to a strong inference of fraudulent intent" but does not which of plaintiff's statements they claim to be false.

Holding:

No, defendants' claim does not have sufficient particularity. Leave to amend counterclaims granted.

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