Fingerhut v. Kralyn Enterprises, Inc.

337 N.Y.S.2d 394 (1971)

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Fingerhut v. Kralyn Enterprises, Inc.

Supreme Court, New York County, New York
337 N.Y.S.2d 394 (1971)

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Facts

Stanley Fingerhut (plaintiff) was a wealthy and successful stock broker who owned a hedge fund, but also had a history of manic-depressive mental illness. Fingerhut, in the presence of his lawyer, entered into a contract with Kralyn Enterprises, Inc. (Kralyn) (defendant) to purchase the Bel Aire Golf & Country Club. Fingerhut made two payments for what amounted to a down payment in the amount of $225,000. Subsequently, Fingerhut sent a letter to Kralyn stating that he was manic at the time he entered into the contract and attempting to rescind the contract. Kralyn did not agree to rescind the contract. Fingerhut brought suit to recover his down payment and to have the contract rescinded on the grounds that he lacked the mental capacity to contract with Kralyn. Kralyn filed a motion to dismiss, claiming that Fingerhut had the requisite mental capacity to enter into the contract. At trial, Fingerhut presented psychiatrists as expert witnesses who testified that he was psychotic at the time of the execution of the contract. Kralyn presented psychiatrists as expert witnesses who testified the opposite. Similarly, Fingerhut presented witnesses who testified that his behavior was irrational and “bizarre” around the time of the contract’s execution, but Kralyn’s witnesses stated that Fingerhut’s behavior was rational. Fingerhut did not testify.

Rule of Law

Issue

Holding and Reasoning (Lupiano, J.)

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