| Ingrami v Rovner |
| 2007 NY Slip Op 09362 [45 AD3d 806] |
| November 27, 2007 |
| Appellate Division, Second Department |
| Oliviero Ingrami, Respondent, v Brett Rovner, Defendant,and Marc Rovner, Appellant. |
—[*1] Thelen Reid Brown Raysman & Steiner, LLP, New York, N.Y. (Peter Brown and Rachel E.Kramer of counsel), for respondent.
In an action, inter alia, to recover damages for fraud, conversion, and unjust enrichment, thedefendant Marc Rovner appeals from so much of (1) an order of the Supreme Court, NassauCounty (McCarty, J.), entered January 12, 2007, as denied his cross motion pursuant to CPLR3025 (b) for leave to amend the answer to add the defense of statute of limitations, and (2) anorder of the same court entered March 22, 2007, as, upon reargument, adhered to its priordetermination.
Ordered that the appeal from the order entered January 12, 2007, is dismissed, as the orderwas superseded by the order entered March 22, 2007, made upon reargument; and it is further,
Ordered that the order entered March 22, 2007, is modified, on the law, by deleting theprovision thereof, which, upon reargument, adhered to so much of the original determination inthe order entered January 12, 2007, as denied that branch of the cross motion which was for leaveto amend the answer to add the defense of statute of limitations with respect to the cause ofaction for unjust enrichment and substituting therefor a provision, upon reargument, granting thatbranch of the cross motion; as so modified, the order is affirmed, without costs or disbursements.
In February 2001, at the behest of the appellant, Marc Rovner, and his brother, the [*2]defendant Brett Rovner (hereinafter collectively the Rovners), theplaintiff, Oliviero Ingrami, allegedly transferred the sum of approximately $150,000 to theRovners as an investment in a new business venture called Sterling Management Industries, LLC(hereinafter Sterling), which would act as a holding company for EMR Realty, Inc. (hereinafterEMR), a commercial real estate firm. According to the plaintiff, the Rovners misled and inducedhim to turn over the money by promising him an ownership interest in Sterling and otherperquisites. The plaintiff alleged that to his detriment, he relied upon the Rovners'representations, which they knew to be false and had no intention of fulfilling. The plaintifffurther alleged that unbeknownst to him, in or around July 2002, the Rovners sold or transferredthe assets of EMR, effectively ending Sterling's operations. According to the plaintiff, he did notlearn of the sale until the fall of 2003 and did not receive any portion of the sale proceeds. Uponlearning of the Rovners' alleged misdeeds, the plaintiff demanded the return of his investment, aswell as a share of the sale proceeds; the Rovners refused the demands. In June 2004, the plaintiffcommenced this action against the Rovners alleging fraud, conversion, breach of contract, breachof fiduciary duty, and unjust enrichment, and seeking an accounting. In early 2006, the SupremeCourt granted that branch of the defendants' motion pursuant to CPLR 3211 (a) (7) which was todismiss the breach of contract, breach of fiduciary duty, and accounting causes of action. In late2006, the appellant cross-moved for leave to amend the answer to add the defense of statute oflimitations with respect to the remaining causes of action alleging fraud, conversion, and unjustenrichment. The Supreme Court denied the cross motion, thereafter granted reargument, andupon reargument, adhered to its original determination.
Upon reargument, the Supreme Court providently exercised its discretion in adhering to itsoriginal determination denying those branches of the appellant's cross motion which werepursuant to CPLR 3025 (b) for leave to amend the answer to add the defense of statute oflimitations with respect to the fraud and conversion causes of action. However, the SupremeCourt should have granted that branch of the cross motion which was for leave to amend theanswer to add the defense of statute of limitations with respect to the unjust enrichment cause ofaction.
Pursuant to CPLR 3025 (b), leave to amend a pleading should be freely given. Adetermination whether to grant such leave is within the trial court's broad discretion, and theexercise of that discretion will not be lightly disturbed (see Sayers v Albicocco, 298AD2d 572, 573 [2002]; Henderson v Gulati, 270 AD2d 308 [2000]). As a general rule,leave to amend a pleading should be granted where there is no significant prejudice or surprise tothe opposing party and where the evidence submitted in support of the motion indicates that theamendment may have merit (see Edenwald Contr. Co. v City of New York, 60 NY2d957, 959 [1983]). The court must examine the merits of a proposed amendment, as leave toamend should not be granted where the proposed amendment is totally without merit or palpablyinsufficient as a matter of law (see Hill v2016 Realty Assoc., 42 AD3d 432, 433 [2007]). Where a defendant has failed to assertthe statute of limitations defense in both a motion to dismiss and in the answer, he or she maynonetheless seek leave to amend the answer to assert such defense (see CPLR 3211[e]; Fahey v County of Ontario, 44 NY2d 934, 935 [1978]; Lipman v Vebeliunas, 39 AD3d488, 490 [2007]; Hickey v Hutton, 182 AD2d 801, 802 [1992]).
Here, the appellant's proposed amendment adding the statute of limitations defense withrespect to the fraud and conversion causes of action is totally without merit. Contrary to theappellant's claim, the fraud and conversion causes of action are governed by the six-year statuteof limitations contained in CPLR 213 (8) (see Petrou v Ehmer Intl. Foods, 167 AD2d338, 339 [1990]; see also Klein vGutman, 12 AD3d 417 [2004]). Since the causes of action accrued in February 2001when the plaintiff transferred the money in reliance upon the defendants' allegedly falserepresentations, the [*3]action was timely commenced in June2004.
The Supreme Court improvidently exercised its discretion in denying that branch of theappellant's cross motion which was for leave to amend the answer to add the statute oflimitations defense with respect to the unjust enrichment cause of action. Contrary to theplaintiff's contention, the three-year statute of limitations of CPLR 214 (3) governs here, sincethe plaintiff is seeking monetary, as opposed to equitable, relief (see Lambert v Sklar, 30 AD3d 564[2006]; cf. Congregation Yetev Lev D'Satmar v 26 Adar N.B. Corp., 192 AD2d 501, 503[1993]). The statute of limitations on an unjust enrichment claim begins to run upon theoccurrence of the wrongful act giving rise to the duty of restitution (id.). Thus, the actioncommenced in June 2004 is arguably untimely as the appellant's alleged wrongful acts occurredin February 2001. Since the appellant's proposed amendment to assert the statute of limitationsdefense with respect to the unjust enrichment cause of action may have merit, the Supreme Courtshould have granted that branch of the appellant's cross motion which was for leave to amend theanswer with respect to that cause of action.
The parties' remaining contentions either are without merit or have been rendered academicby our determination. Miller, J.P., Ritter, Santucci and Balkin, JJ., concur.