Opinion
Index No. 526725/2021 Mot. Seq. No. 1
05-10-2024
EDWARD WYDRA et al, Plaintiff, v. SARAH BRACH et al, Defendants,
Unpublished Opinion
DECISION AND ORDER
RICHARD VELASQUEZ JUSTICE.
The following papers/NYSCEF Doc #'s 85 to 99 read on this motion:
| Papers | NYSCEF DOC NO.'s |
| Notice of Motion/Order to Show Cause | |
| Affidavits (Affirmations) Annexed | 85-91 |
| Opposing Affidavits (Affirmations). | 92-97 |
| Reply Affidavits | 99 |
After having come before the Court on November 29, 2023 and the court having heard oral argument the court finds as follows:
Defendants move for an order for an Order (i) dismissing the Verified Complaint pursuant to CPLR § 3211, (ii) pursuant to CPLR § 2304, quashing, fixing conditions, and/or modifying third-party subpoenas issued by Plaintiffs to Signature Bank and Apple Bank for documents related to Sarah Brach and the Trusts, (iii) pursuant to CPLR § 3103, issuing a protective order denying, limiting, conditioning, and/or regulating the third-party subpoenas issued by Plaintiffs to Signature Bank and Apple Bank for documents related
to Sarah Brach and the Trusts so as to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice (iv) along with such other and further relief as the Court deems just and proper. (MS#1) Plaintiff's oppose the same.
For the sake of brevity this court adopts and incorporates herein the background of facts recited in Justice Marber's Order dated October 4, 2021 and entered on October 6, 2021. See NYSCEF Doc #76 under index number 614526/2020 pp. 2-6.
In the present case, Justice Marber's findings on the Plaintiffs motion for a preliminary injunction are law of the case. Justice Marber found that (i) the Plaintiffs' made misstatements and omissions to the court when they sought an ex parte TRO, (ii) engaged in forum shopping because it was dissatisfied with this Court, and (iii) had demonstrated no likelihood of success on its claims that Sarah Brach and the Trusts were the alter egos of Mendel Brach or any of the other judgment debtors. Most notably, Judge Marber held that "none of the documents submitted in support of their application support that the pu rported transfers, some of which predate the original arbitration award by over ten years, were fraudulent." Moreover, Judge Marber found that "[i]t appears that after Plaintiffs' attempt to obtain financial records from the non-debtor spouse, Sarah Brach, in the Kings County Action were unsuccessful, the Plaintiffs commenced the within in this venue as essentially an end-run around prior disfavored rulings from the Kings County Court" and that "the purported fraudulent transfers do not demonstrate a likelihood of success on the merits."Id. at 11.
ANALYSIS
Claims alleging fraudulent conveyances based on constructive fraud under the DCL are governed by a six-year statute of limitations. Pursuant to CPLR 213(1), and a claim accrues at the time of the transfer. See Island Holding, LLC v. O'Brien, 6 A.D.3d 498, 499-500 (2d Dep't 2004): Avalon LLC v. Coronet Properties Co., 306 A.D.2d 62. 62-63 (1st Dep't 2003). An action for fraudulent conveyance under Section 276 of the DCL alleging actual fraud must be commenced within six years of the date of the conveyance or within two years of the date that the fraud or conveyance is discovered or should have been discovered. Avalon LLC v. Coronet Properties Co, 306 A.D.2d at 63. "The burden of proving that the fraud could not have been discovered rests on the party who seeks the benefit of the exception." Lefkowitz v. Appelbaum, 258 A.D.2d 563, 563 (2d Dep't 1999). 21.
In the present case, Plaintiffs filed their complaint on December 15, 2020. Therefore, as a matter of law, any alleged fraudulent transfers under the DCL are time barred for the period prior to December 15, 2014. All of the transfers defendants rely on in this matter occurred before December 15, 2014 and years before any judgment was entered in the Kings County Action, and in some instances, more than a decade before the entry of the judgment. The first judgment in the Kings County Action was entered in August 2017. The Amended Judgment, which is the operative judgment from which the Plaintiffs are proceeding, was not entered until April 2018.
Additionally, the two year from discovery exception under DCL 276, is not available to the plaintiffs because they have failed to plead they could not have discovered any of the alleged conveyances. Moreover, Sarah Brach was questioned about the Trusts and these alleged fraudulent transactions at her deposition, which deposition took place on November 20, 2018, i.e., more than two years before the complaint in this action was filed.
Accordingly, defendants' motion to dismiss this action in its entirety is hereby granted, this action is hereby dismissed the clerk of the court shall mark this action dismissed. All other reliefs requested in this motion are rendered academic by the granting of the dismissal of this action. (MS#1).
This constitutes the Decision/Order of the court.