No Fraudulent Inducement for Failing to Notify of Intent to Use Outsourced Labor

Metro. Steel Indus., Inc. v. Graphics for Steel Structures, Inc., 2010 WL 5583038 (E.D.N.Y. Dec. 7, 2010)

In Metropolitan Steel Industries, the plaintiff contractor alleged that the defendant subcontractor breached its contract with the plaintiff by failing to completely perform; the defendant counterclaimed for the unpaid balance.  The plaintiff then sought to amend its complaint and assert a claim for fraudulent inducement on the grounds that the defendant failed to disclose its intention to use outsourced labor, but its motion was not timely filed.

The magistrate judge dismissed the fraudulent inducement claim on the grounds that there was no confidential or fiduciary relationship between the parties, as well as because they were duplicative of the primary breach of contract claim, since the terms in question were directly related to the parties’ agreement, rather than being collateral in nature.