CBS, Inc. v. Ziff-Davis Publishing Co.

553 N.E.2d 997 (1990)

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CBS, Inc. v. Ziff-Davis Publishing Co.

Court of Appeals of New York
553 N.E.2d 997 (1990)

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Facts

CBS, Inc. (CBS) (plaintiff) agreed to buy several businesses from Ziff-Davis Publishing Co. (Ziff-Davis) (defendant). Ziff-Davis supplied financial information to CBS, which included express warranties regarding the truthfulness of the information. CBS conducted its own investigation of the financial information and found that it was not truthful. CBS informed Ziff-Davis of its findings. Ziff-Davis responded and stated that CBS’s findings were meritless. CBS acknowledged that there was a dispute between the parties, but stated that it decided to go forward with the deal due to the time, effort, and money that had been spent on the transaction. Upon closing the deal, the parties agreed that the decision to close did not constitute a waiver of any rights or defenses either party may have. CBS filed suit, alleging that Ziff-Davis breached warranties regarding the business’s profitability. Ziff-Davis moved to dismiss alleging that CBS had not established reliance upon the warranties. The trial court granted the motion to dismiss. CBS appealed. The appeals court affirmed the trial court decision. CBS appealed to the Court of Appeals of New York.

Rule of Law

Issue

Holding and Reasoning (Hancock, Jr., J.)

Dissent (Bellacosa, J.)

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