| Prichard v 164 Ludlow Corp. |
| 2008 NY Slip Op 02488 [49 AD3d 408] |
| March 18, 2008 |
| Appellate Division, First Department |
| Robert Prichard et al., Appellants, v 164 Ludlow Corp. etal., Defendants, and Alexandra Wolcott, Also Known as Sandra Wolcott, et al.,Respondents. |
—[*1] Law Offices of G. Oliver Koppell & Associates, New York City (G. Oliver Koppell ofcounsel), for respondents.
Order, Supreme Court, New York County (Bernard J. Fried, J.), entered December 14, 2006,which, to the extent appealed from as limited by the briefs, granted defendants-respondents'motion to dismiss the causes of action for breach of contract, fraudulent inducement, and lullingfraud as against them, unanimously affirmed, without costs.
The cause of action for fraudulent inducement with respect to plaintiffs' initial investment indefendant 164 Ludlow Corp. was properly dismissed as barred by the statute of limitations(CPLR 213 [8]; see Siler v LutheranSocial Servs. of Metro. N.Y., 10 AD3d 646, 648 [2004]). Plaintiffs entered into thecontract to purchase shares in the corporation, i.e., they completed the act that the allegedfraudulent statements had induced, on September 9, 1997. Accordingly, they had six years fromthat date, i.e., until September 9, 2003, to commence their action. The action was not commenceduntil May 13, 2005. Even assuming the fraud was not discovered until "late 1999," as alleged inthe complaint, the claim was time-barred because the action was commenced more than twoyears from "late 1999."
The cause of action for lulling fraud was properly dismissed, not because it was untimely, asthe motion court concluded, but because it failed to state a cause of action. The statute oflimitations for fraud applies to causes of action alleging that one party lulled another into sittingon its rights until after the statute of limitations expired (see Brick v Cohn-Hall-MarxCo., 276 NY 259, 264 [1937]; De Vito v New York Cent. Sys., 22 AD2d 600, 603[1965]). Thus, according plaintiffs the benefit of every possible inference, to wit, that the falserepresentations made by defendants-respondents that lulled plaintiffs into sitting on their rightsbegan in March 2001 and continued through May 2002, plaintiffs' action was timely, since it wascommenced within six years of the alleged fraud (CPLR 213 [8]). However, the complaintcontains no allegation of false statements made by defendants-respondents. All the allegedfraudulent representations were made by counsel for the corporation, and plaintiffs havesubmitted no evidence that would[*2]support the conclusion that the corporation's counsel, whichwas representing the corporation with respect to its alleged breach of a buy-out agreemententered into with plaintiffs, was also representing defendants-respondents personally.
The cause of action for breach of contract was properly dismissed for failure to allegesufficient facts to justify piercing the corporate veil. Moreover, further discovery will not cure thedefects. Only in conclusory terms have plaintiffs alleged how defendants-respondents controlledthe corporation with respect to its failure to pay under the buyout agreement (see Sheridan Broadcasting Corp. vSmall, 19 AD3d 331 [2005]). They simply speculate that defendants-respondents mayhave received monies from the corporation that plaintiffs believe should have been used to paythem. The fact that defendants-respondents maintained control over the corporation as membersof the board of directors and thus directed the payment of its debt is not sufficient to support afinding that they had the requisite control to use the corporation for their own personal benefit orthat they abused the corporate form to injure plaintiffs (see Forum Ins. Co. v TexarkomaTransp. Co., 229 AD2d 341, 342 [1996]).
We have considered plaintiffs' remaining contentions and find them without merit.Concur—Mazzarelli, J.P., Andrias, Williams, Buckley and Acosta, JJ. [See 14Misc 3d 1202(A), 2006 NY Slip Op 52381(U).]