| Soghanalian v Young |
| 2015 NY Slip Op 06459 [131 AD3d 744] |
| August 6, 2015 |
| Appellate Division, Third Department |
[*1]
| Jo Ann Soghanalian, Formerly Known as Jo Ann Coletti, Respondent-Appellant, v John W. Young et al., Appellants-Respondents, et al., Defendents. |
McDonough & Artz, PC, Binghamton (Philip L. Artz of counsel), forappellants-respondents.
Schlather, Stumbar, Parks & Salk, LLP, Ithaca (Raymond M. Schlather ofcounsel), for respondent-appellant.
Clark, J. Cross appeals from an order of the Supreme Court (Lebous, J.), enteredDecember 18, 2013 in Broome County, which, among other things, partially grantedcertain defendants' motion for summary judgment dismissing the complaint againstthem.
Defendant John W. Young served as legal counsel to plaintiff and defendant ZavenSoghanalian, plaintiff's spouse, who were involved in domestic and internationalbusiness and real estate transactions. In 1985, Young formed defendant Stuart RealtyEnterprises, Inc. (hereinafter SRE) at Soghanalian's request to protect the assets ofplaintiff and Soghanalian from creditors. Young has been the majority shareholder ofSRE since its inception even though SRE's assets were acquired with funds provided byplaintiff and Soghanalian. It appears that plaintiff did not know that Young was ashareholder and believed for many years that she and Soghanalian were the onlyshareholders. Over time, the business and legal relationship between Young, Soghanalianand plaintiff grew complex and tumultuous until Young formally terminated theirattorney-client relationship in 2008.
In May 2012, plaintiff commenced this action seeking damages for fraud (first five[*2]causes of action) and an involuntary dissolution ofSRE (sixth cause of action). As relevant here, all of the defendants named in thecomplaint except Soghanalian moved for summary judgment dismissing the complaintagainst them, based upon, among other things, the statute of limitations. Supreme Courtpartially granted the motion by dismissing the five causes of action based upon fraud.Young and SRE (hereinafter collectively referred to as defendants)[FN1] appeal and plaintiffcross-appeals.[FN2]
An action based upon fraud must be commenced within "the greater of six yearsfrom the date the cause of action accrued or two years from the time the plaintiff. . . discovered the fraud, or could with reasonable diligence havediscovered it" (CPLR 213 [8]). The latter part of this rule is called the discoveryexception, and its application is generally "a mixed question of law and fact whichshould not be resolved summarily unless it conclusively appears that the plaintiff hadknowledge of facts which should have caused him or her to inquire and discover thealleged fraud" (Hoffman v Cannone, 206 AD2d 740, 741 [1994]; see Trepukv Frank, 44 NY2d 723, 724-725 [1978]). Additionally, where, as here, a fiduciaryrelationship is involved, the doctrine of equitable estoppel may be invoked to defeat astatute of limitations defense so long as the plaintiff establishes that he or shecommenced the action within a reasonable amount of time (see Doe v Holy See [State ofVatican City], 17 AD3d 793, 794-796 [2005], lv denied 6 NY3d 707[2006]).
Here, plaintiff contends that her fraud claims are timely because Young concealedthe alleged fraud from her until October 2008, when, after terminating his legalrepresentation of plaintiff, Young sent a letter to plaintiff's counsel asserting that he wasthe majority shareholder of SRE. While plaintiff admits that this alerted her to the allegedfraud, she waited until May 2012—nearly four years later—to commencethe instant action. Although we do not discredit plaintiff's assertion that she did not knowof the alleged fraud before 2008, her fraud claims are time-barred because the discoveryexception allowed plaintiff only two years from the date that she should have reasonablydiscovered the alleged fraud to commence the action (see Durazinski v Chandler, 41 AD3d 918, 919-920 [2007];Hoffman v Cannone, 206 AD2d at 741). Moreover, plaintiff is not saved by thedoctrine of equitable estoppel because she failed to commence the action within areasonable amount of time after discovering the alleged fraud (see Doe v Holy See[State of Vatican City], 17 AD3d at 796). Thus, although we find Young's conductdisturbing, we must affirm the dismissal of plaintiff's fraud claims.
To the extent not discussed herein, we have considered plaintiff's remainingarguments and have found them to be without merit.
Lahtinen, J.P., Lynch and Devine, JJ., concur. Ordered that the order is affirmed,without costs.
Footnote 1:Supreme Court noted inits decision that plaintiff discontinued her claims against the other three defendants whohad also moved for summary judgment.
Footnote 2:Although defendantsappealed from the order, they have abandoned that appeal by failing to address it in theirbrief (see Matter of Neroni vGranis, 121 AD3d 1312, 1314 n 2 [2014], appeal dismissed sub nom.Martens v Neroni, 25 NY3d 957 [2015]).