Carter v. Urban Serv. Sys. Corp.

RANDOLPH D. MOSS, United States District Judge

This case raises the question whether a party to a stock purchase agreement and corresponding promissory note and security agreement may decline to make payments due under those agreements based on a defense of fraudulent inducement, while simultaneously affirming the stock purchase agreement and treating the acquired stock as his own. As explained below, the Court concludes that, at least in the circumstances of this case, he may not do so, and that his remedy for fraudulent inducement lies, if at all, in an action for damages.

The parties to this…