| Delaware County v Leatherstocking Healthcare, LLC |
| 2013 NY Slip Op 06763 [110 AD3d 1211] |
| October 17, 2013 |
| Appellate Division, Third Department |
| Delaware County,Appellant-Respondent, v Leatherstocking Healthcare, LLC,Respondent-Appellant, and Leatherstocking Realty Holdings, LLC,Respondent. |
—[*1] Bond, Schoeneck & King, PLLC, Garden City (Justin C. Tan of counsel), forrespondent-appellant and respondent.
Rose, J.P. Cross appeals from an order of the Supreme Court (Lambert, J.), enteredSeptember 17, 2012 in Delaware County, which, among other things, partially granteddefendants' motion to dismiss the complaint.
Plaintiff and defendant Leatherstocking Healthcare, LLC (hereinafter Healthcare)entered into a contract of sale in May 2005 whereby plaintiff agreed to sell its residentialhealth facility to Healthcare. Under the terms of the contract, plaintiff's accountsreceivable were not included in the sale and Healthcare was obligated to engage inongoing collection efforts and to pay plaintiff the amounts collected. The sale closed inDecember 2006 and, at Healthcare's request, the real property on which the facility waslocated was deeded to defendant Leatherstocking Realty Holdings, LLC (hereinafterRealty). Healthcare then operated the facility under a long-term lease from Realty. InMarch 2009, when a dispute arose over the amounts collected and owed by Healthcarefor plaintiff's accounts receivable, plaintiff and Healthcare [*2]entered into an agreement whereby Healthcare agreed topay plaintiff $818,846.69 in monthly installments. After Healthcare allegedly failed tomake 18 of the required monthly payments, plaintiff commenced this action in January2012 asserting causes of action for breach of contract, unjust enrichment and fraudagainst both Healthcare and Realty. Defendants then moved pursuant to CPLR 3211 (a)(1), (5) and (7) to dismiss the complaint against Realty in its entirety and dismiss allcauses of action against Healthcare except for so much of the breach of contract cause ofaction as is based upon the March 2009 agreement. Supreme Court granted the motion asto Realty and partially granted the motion as to Healthcare by dismissing the claimagainst it for unjust enrichment. Plaintiff appeals and Healthcare cross-appeals.
There is no merit to Healthcare's contention that the cause of action alleging itsbreach of the contract of sale is time-barred. A cause of action for breach of contractaccrues at the time of the breach (see Ely-Cruikshank Co. v Bank of Montreal, 81NY2d 399, 402 [1993]; John J. Kassner & Co. v City of New York, 46 NY2d544, 550 [1979]). Here, the money allegedly owed by Healthcare for the accountsreceivable did not become due and, thus, the breach did not occur until after the closing,which occurred in December 2006. As this action was commenced less than six yearslater, in January 2012, the cause of action for breach of contract is timely and the motionto dismiss that claim against Healthcare was properly denied (see CPLR 213 [2];Glynos v Dorizas, 106AD3d 480, 481 [2013]; Meadowbrook Farms Homeowners Assn., Inc. v JZG Resources,Inc., 105 AD3d 820, 822 [2013], lv dismissed 21 NY3d 1024 [2013]).
We agree, however, with defendants' argument that the motion to dismiss the breachof contract action against Realty was properly granted as Realty was not a party to eitherthe 2005 contract of sale or the 2009 agreement (see Birch v McGhee, 79 AD3d 1296, 1297 [2010];Won's Cards v Samsondale/Haverstraw Equities, 165 AD2d 157, 162 [1991]; see also Pacific Carlton Dev. Corp.v 752 Pac., LLC, 62 AD3d 677, 678 [2009]). The documentary evidence in therecord refutes plaintiff's allegation that Healthcare assigned the contract of sale to Realtyand conclusively establishes that plaintiff and Healthcare were the only parties to eitheragreement (see Kopelowitz &Co., Inc. v Mann, 83 AD3d 793, 797 [2011]).
As for the unjust enrichment cause of action, plaintiff does not challenge itsdismissal against Healthcare, arguing only that sufficient facts have been alleged tosustain the claim against Realty. We agree. The elements of an unjust enrichment claimare "that (1) the other party was enriched, (2) at that party's expense, and (3) that it isagainst equity and good conscience to permit [the other party] to retain what is sought tobe recovered" (MandarinTrading Ltd. v Wildenstein, 16 NY3d 173, 182 [2011] [internal quotation marksand citation omitted]; seeGeorgia Malone & Co., Inc. v Rieder, 19 NY3d 511, 516 [2012]). Indetermining a motion to dismiss pursuant to CPLR 3211 (a) (7), we will liberallyconstrue the pleadings, deem the allegations to be true and grant the plaintiff the benefitof every possible inference (seeEBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005]; Leon vMartinez, 84 NY2d 83, 87-88 [1994]). Accepting plaintiff's allegation that Realty isso enmeshed and intertwined with Healthcare that the two should be treated as a singleentity, the complaint adequately states a claim to hold Realty liable for unjustlywithholding the payments due for the accounts receivable (see ARB Upstate CommunicationsLLC v R.J. Reuter, L.L.C., 93 AD3d 929, 933-934 [2012]). Nor is the unjustenrichment claim time-barred. It accrued at the time the accounts receivable were due,just as the breach of contract cause of action did, less than six years before thecommencement of this action (see Maya NY, LLC v Hagler, 106 AD3d 583, 585 [2013];Davis v CornerStone Tel. Co.,LLC, 61 AD3d 1315, 1316 [2009]).[*3]
We reach a different conclusion, however, withrespect to the timeliness of the fraud cause of action. Plaintiff alleges that it was inducedto enter into the 2005 contract of sale by defendants' knowing misrepresentations andtheir concealed intention to withhold the accounts receivable. The statute of limitationsfor a fraud claim is the greater of six years after accrual or two years from when it couldhave been discovered with reasonable diligence (see CPLR 213 [8]; US Bank N.A. v Gestetner,103 AD3d 962, 963 [2013]; McCormick v Favreau, 82 AD3d 1537, 1539 [2011], lvdenied 17 NY3d 712 [2011]). Inasmuch as plaintiff's fraud cause of action relatessolely to the execution of the contract of sale in 2005, it is barred by the six-year statuteof limitations. Even assuming that the alleged fraud could not have been detected withreasonable diligence until the 2009 agreement, it is also barred by the two-year statute oflimitations for discovery-based claims (see Giarratano v Silver, 46 AD3d 1053, 1056 [2007]; County of Ulster v Highland FireDist., 29 AD3d 1112, 1115 [2006], lv denied 7 NY3d 710 [2006]).
Stein, McCarthy and Garry, JJ., concur. Ordered that the order is modified, on thelaw, without costs, by (1) reversing so much thereof as granted defendants' motion todismiss the unjust enrichment cause of action against defendant Leatherstocking RealtyHoldings, LLC and (2) reversing so much thereof as denied defendants' motion todismiss the fraud cause of action against defendant Leatherstocking Healthcare, LLC;motion denied as to the unjust enrichment cause of action against Leatherstocking RealtyHoldings and motion granted as to the fraud cause of action and that cause of actiondismissed against Leatherstocking Healthcare; and, as so modified, affirmed.