| People v Ben |
| 2008 NY Slip Op 07346 [55 AD3d 1306] |
| October 3, 2008 |
| Appellate Division, Fourth Department |
| The People of the State of New York, by Eliot Spitzer, Attorney Generalof the State of New York, on Behalf of The Ultimate Charitable Beneficiaries, Respondent, v Sheila K.Ben, as Executrix of Michael Ristau, Deceased, Appellant, et al.,Defendant. |
—[*1] Andrew M. Cuomo, Attorney General, Albany (Christopher Wiles of counsel), plaintiff-respondentpro se.
Appeal from an order of the Supreme Court, Onondaga County (Donald A. Greenwood, J.),entered May 29, 2007. The order, insofar as appealed from, granted in part plaintiff's motion anddismissed certain affirmative defenses asserted by defendant Sheila K. Ben, as executrix of the estate ofMichael Ristau, deceased, and denied the cross motion of that defendant to dismiss the complaint.
It is hereby ordered that the order so appealed from is unanimously modified on the law by grantingthe cross motion in part and dismissing the third cause of action and as modified the order is affirmedwithout costs.
Memorandum: On May 26, 2005, plaintiff commenced an action against Michael Ristau and Heartto Heart—Living With Addiction, Inc., a not-for-profit corporation formed by him. Ristaumoved to dismiss the complaint (first complaint) against him pursuant to CPLR 3211 (a) (8), for lack ofpersonal jurisdiction based on improper service of process, but he died while the motion was pending.Sheila K. Ben was appointed executrix of Ristau's estate on January 3, 2006, and approximately threemonths later plaintiff moved to substitute her in the action as the executrix of Ristau's estate. SupremeCourt granted Ristau's motion to dismiss the complaint and determined that plaintiff's motion forsubstitution therefore was moot.
On June 20, 2006, plaintiff filed a new complaint (second complaint) with a new index number,naming Ben as a defendant, as the executrix of Ristau's estate. Plaintiff subsequently moved to dismissthe affirmative defenses asserted by Ben alleging, inter alia, that the action was time-barred. In heranswering affidavit, treated as a cross motion by the court, Ben sought dismissal of the secondcomplaint as time-barred. We conclude that the court erred in denying Ben's cross motion in itsentirety.[*2]
We note at the outset that the court erred in determining thatthe six-month recommencement provision set forth in CPLR 205 (a) applies to the secondcomplaint. The order dismissing the first complaint is a nullity because, upon the death ofRistau, the court was divested "of jurisdiction to conduct proceedings in [the] action until a propersubstitution [was] made pursuant to CPLR 1015 (a)" (Giroux v Dunlop Tire Corp., 16 AD3d 1068, 1069 [2005] [internalquotation marks omitted]; see Singer vRiskin, 32 AD3d 839, 839-840 [2006]). Although plaintiff moved for substitution (seeCPLR 1015 [a]; 1021; Giroux, 16 AD3d at 1069), the court granted Ristau's motion todismiss the complaint and expressly stated on the record that plaintiff's motion for substitution wasdeemed moot. As a result, the first complaint remains in effect and, contrary to plaintiff's contention, thesix-month recommencement provision set forth in CPLR 205 (a) does not apply.
With respect to the merits of Ben's cross motion to dismiss the second complaint, we conclude thatthe court properly determined that the causes of action for breach of fiduciary duty and faithless servantliability are not time-barred. Causes of action for breach of fiduciary duty are governed by a three-yearstatute of limitations when only monetary damages are requested, and a six-year statute of limitationswhen equitable relief is sought (see CPLR 213; Bouley v Bouley, 19 AD3d 1049, 1051 [2005]). The statute oflimitations is tolled "until the fiduciary has openly repudiated his or her obligation or the relationship hasbeen otherwise terminated" (Westchester Religious Inst. v Kamerman, 262 AD2d 131, 131[1999]). "The reason for such a tolling rule is that the beneficiary should be entitled to rely upon afiduciary's skill without the necessity of interrupting a continuous relationship of trust and confidence byinstituting suit" (Golden Pac. Bancorp v Federal Deposit Ins. Corp., 273 F3d 509, 519[2001]). We reject Ben's contention that the tolling rule with respect to breach of fiduciary duty doesnot apply to the benefit of the Attorney General (see N-PCL 112, 720). We also reject Ben'scontention that the tolling rule in question applies only to equitable claims (see Transport Workers Union of Am. Local 100AFL-CIO v Schwartz, 17 AD3d 218 [2005]). We note in addition that Ben errs incontending that plaintiff is seeking to invoke the doctrine of equitable estoppel to extend the statute oflimitations. The tolling rule with respect to breach of fiduciary duty does not involve the doctrine ofequitable estoppel. Thus, plaintiff is entitled to the benefit of the tolling rule in question, and the causesof action for breach of fiduciary duty and faithless servant liability were timely interposed when thesecond complaint was filed, regardless of whether the three-year or the six-year statute of limitationsapplies.
We agree with Ben, however, that the cause of action for common-law fraud is time-barred. Therecord before us establishes that plaintiff knew of or reasonably could have discovered the allegedfraud by June 19, 2003 (see Hillman v City of New York, 263 AD2d 529 [1999], lvdenied 94 NY2d 759 [2000]; see also Kaufman v Cohen, 307 AD2d 113, 122 [2003]).Because plaintiff's discovery of the alleged fraud occurred no later than June 2003 and the action wasnot commenced until June 20, 2006, more than two years later, the common-law fraud cause of actionis untimely pursuant to CPLR 213 (8). We therefore modify the order accordingly.Present—Scudder, P.J., Centra, Fahey, Peradotto and Green, JJ.