Appellate Practice Attorney serving New York, NY
I'm assuming that the owner did not sign a contract with you which specifically laid out terms which he breached , such as representing that he would hire x number of staff. You might be able to cobble together some sort of fraud claim if you can demonstrate that the owner misrepresented facts to you on which you reasonably relied in taking the job, and that you wouldn't have taken the job otherwise. For example, did the owner lie to you about the number of staff that would be on hand? If so, were you reasonable in relying on that statement or should you have checked it out? Would you have turned down the job if you had known the true facts?
If the owner didn't misrepresent any facts to you on which you relied, I don't see how he had any duty to you. If a New York lawyer runs off with $10 million in clients funds, she will cause much distrust of lawyers, and may cause me to lose business, but I don't have a claim against her - she had no duty to me, and anyway my damages are too remote to give me a valid claim against her.
Even if you could prove a fraud, you're still going to have a hard time proving damages. It will be difficult, and expensive in terms of expert's fees, to prove, beyond mere speculation, the money you will lose because of the damage to your brand. Also, fraud damages are generally calculated based on the money you lay out because of the fraud, not lost profits, although there are ways to get around this rule.
In short, I don't think you have a great case.
Answered on Jan 02nd, 2014 at 12:37 PM