| Elhannon, LLC v Brenda J. DeLuca Trust |
| 2013 NY Slip Op 05273 [108 AD3d 911] |
| July 11, 2013 |
| Appellate Division, Third Department |
| Elhannon, LLC, Appellant, v Brenda J. DeLucaTrust et al., Respondents. |
—[*1] Couch Dale Marshall, PC, Latham (Mark W. Couch of counsel), forrespondents.
Stein, J. Appeal from an order of the Supreme Court (McDonough, J.), enteredOctober 10, 2012 in Albany County, which granted defendants' motion to dismiss thecomplaint.
Plaintiff entered into a contract with defendant Brenda J. DeLuca Trust in September2005 to perform landscaping services in conjunction with the construction of a customhome in the Town of Guilderland, Albany County. After disputes arose between theparties regarding payment and other issues, the parties exchanged writtencommunications which, among other things, alleged that each was in breach of thecontract. As pertinent here, plaintiff commenced the instant action in October 2011,alleging that defendants had fraudulently induced it into entering into the contract byfalsely representing that Land Design Studio, LLC would serve as project architect tooversee plaintiff's work. Defendants moved to dismiss the complaint pursuant to CPLR3211 on several grounds, including that it was time-barred and that a defense wasfounded on documentary evidence. Supreme Court treated the motion as one forsummary judgment and dismissed the action as barred by the statute of limitations. Onplaintiff's appeal, we now affirm.
Initially, we agree with plaintiff that Supreme Court erred in treating defendants'motion as one for summary judgment. To properly do so, the court must give prior noticeto the parties or, through their submissions, the parties themselves must demonstrate anintent to "deliberately chart[ ] a summary judgment course" (Pilatich v Town of NewBaltimore, 100 AD3d 1248, 1250 [2012] [internal quotation marks and citationsomitted]; see Yule v New York Chiropractic Coll., [*2]43 AD3d 540, 541-542 [2007]). Here, the record does notdemonstrate, and neither party contends, that the court provided notice of its intent totreat defendants' motion as one for summary judgment and, inasmuch as plaintiff was notafforded discovery in this action, we agree that plaintiff did not evince an intent to havethe motion treated as such (see Henbest & Morrisey v W.H. Ins. Agency, 259AD2d 829, 830 [1999]).
Nonetheless, upon examination of the record, we conclude that defendants areentitled to dismissal of plaintiff's action as untimely. An action alleging fraud must becommenced within six years of the date the fraud occurred or within two years from thetime that the plaintiff discovered the fraud or could have done so with reasonablediligence (see CPLR 213 [8]; Sargiss v Magarelli, 12 NY3d 527, 532 [2009]; US Bank N.A. v Gestetner,103 AD3d 962, 963 [2013]). The question as to whether a plaintiff could havediscovered the fraud turns on whether he or she was " 'possessed of knowledge of factsfrom which [the fraud] could be reasonably inferred' " (Sargiss v Magarelli, 12NY3d at 532, quoting Erbe v Lincoln Rochester Trust Co., 3 NY2d 321, 326[1957]; see Vilsack vMeyer, 96 AD3d 827, 828 [2012]).
Here, plaintiff concedes that the six-year limitations period had lapsed, but contendsthat the action was commenced within the alternative two-year period because it did notdiscover, and could not have discovered, that defendants never intended to use LandDesign to administer the parties' agreement until defendants allegedly admitted as muchin depositions taken in August 2011 in connection with a separate proceeding.[FN*]However, plaintiff's contention is flatly contradicted by two letters it sent to defendants inNovember 2005. In the first letter, plaintiff noted that "[a]bsent an architect, [the projectmanager] has been playing that role." In the second letter, plaintiff asserted that "[theTrust] induced us into signing the contract under the false pretense that [the Trust] hiredan Architect to perform the critical contractual role in our contract." Regardless ofwhether plaintiff's allegations could ultimately have been proven, these lettersunequivocally establish that plaintiff was possessed of facts in November 2005 that put iton notice of a potential fraud claim and, consequently, the commencement of this actionin October 2011 was untimely (see Fitzgerald v Fitzgerald, 301 AD2d 851, 852[2003], lv denied 2 NY3d 707 [2004]; Watts v Exxon Corp., 188 AD2d74, 76 [1993]).
Peters, P.J., Lahtinen and Egan Jr., JJ., concur. Ordered that the order is affirmed,with costs.
Footnote *: Prior to thecommencement of the instant action, plaintiff filed a demand for arbitration of its claimsagainst defendants, prompting defendants to commence a proceeding pursuant to CPLR7503 seeking a permanent stay. Supreme Court's order and judgment grantingdefendants' application in that proceeding is the subject of a separate appeal before thisCourt (Matter of Brenda DeLuca Trust [Elhannon, LLC], 108 AD3d 902 [2013][decided herewith]).