Second Department Allows Plaintiff Born With Birth Defects to Bring Fraud Claim Against Her Mother's Employer
September, 2003
The Appellate Division – Second Department has recently held as a matter of first impression that a person born with birth defects alleged to have been caused by her mother’s on-the-job exposure to chemicals while pregnant may sue her mother’s employer for fraud. In a split three-two decision, the majority in Ruffing v. Union Carbide Corp., et al., 2003 WL 22232736 found that this result was consistent with the general and long-standing rule in fraud cases that “fraud may exist where a false representation is made to a third party, resulting in injury to the plaintiff.”
Facts
In Ruffing, plaintiff’s mother, while pregnant, continued to work at a semiconductor manufacturing plant in East Fishkill, New York in reliance upon the assurances made to her by her employer, International Business Machines Corporation (“IBM”) to the effect that her working environment was harmless to the fetus (plaintiff) she was then carrying. Plaintiff’s mother alleged that IBM repeatedly gave her such assurances even though it knew that her work environment did, in fact, pose a danger to the health of her fetus. Plaintiff was born with severe birth defects that she alleges to have been caused by her mother’s on-the-job chemical exposure. Plaintiff filed suit based on negligence, and later moved to amend her complaint to assert a cause of action based on fraud. The trial court denied the motion, and this appeal ensued.
The Majority Opinion
The majority reversed, holding that the trial court should have allowed plaintiff to amend her complaint to assert a cause of action for fraud. The majority reached this conclusion first through application of the “relatively well settled” rule in New York that “fraud may exist where a false representation is made to a third party, resulting in injury to the plaintiff.” “The rule. . .is all the more forceful in a case involving prenatal injuries suffered by entity whose well being is so intimately intertwined with the well being of the ‘third person’ to whom the fraudulent misrepresentation is made, that is, an expectant mother,” the majority wrote. “Application of the rule. . .is also consistent with precedent from this court holding that where the ‘third person’ in question is an expectant mother, a tort committed against that ‘third person’ may, under certain circumstances, give rise to a cause of action on behalf of the fetus who actually suffers the personal injuries.” In so holding, the majority specifically rejected IBM’s argument that it was not plaintiff, but rather her mother, to whom the alleged misrepresentations were made.
The majority also looked to In Re Gergely, 110 F.3d 1448 (9th Cir. 1997), as support for its conclusion. In Gergely, the U.S. Court of Appeals for the Ninth Circuit predicted that California law would recognize a fraud cause of action asserted on behalf of an infant who lost one of his eyes while in utero as the result of his mother’s fraudulently-induced consent to submit to an amniocentesis and as a result of the physician’s negligence in performing that procedure. Quoting Gergely, the majority stated that “in the preconception or fetal stage, as in childhood, it is parents who nearly always make medical choices to protect their children’s interests. . . .this reasoning applies at least as well to fraud as to negligence.”
The Dissent
The two-justice dissent opined that “there is no cognizable cause of action in this State to recover damages for fraud, whether intentional, constructive, or negligent, perpetrated against an unborn child.” Although the dissent did not address or distinguish the New York law regarding fraud and third parties upon which the majority relied, it stated that “[t]he proposed fraud claims require proof that a misrepresentations was made to the plaintiff and that the plaintiff reasonably relied upon such misrepresentation. Here, there was no misrepresentation made to the infant plaintiff, nor could she have relied on any representation made by IBM, because she was not born yet.”
Learning Point:
The impact of Ruffing will be most keenly felt in two areas – the statute of limitations and damages. First, under CPLR 213(8) the statute of limitations for fraud is six years; under CPLR 214(5), the statute of limitations for a personal injury claim based on negligence is only three years. As to damages, punitive damages are available to a plaintiff who prevails in a fraud claim.
Because there was a two-justice written dissent on a question of law in Ruffing, plaintiff may seek review by the Court of Appeals as a matter of right. (See CPLR 5601(a)) We will continue to monitor this case and update our readers as new developments occur.•
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