Opinion
No. 0743–12.
08-22-2016
TORRANCE CONSTRUCTION, INC., Plaintiff, v. Lawrence R. JAQUES and Elizabeth W. Jaques, Defendants.
Law Office of James M. Brooks, Lake Placid (James M. Brooks of counsel), for plaintiff. Briggs Norfolk LLP, Lake Placid (Matthew D. Norfolk of counsel), for defendants.
Law Office of James M. Brooks, Lake Placid (James M. Brooks of counsel), for plaintiff.
Briggs Norfolk LLP, Lake Placid (Matthew D. Norfolk of counsel), for defendants.
ROBERT J. MULLER, J.
The facts of this matter are more fully set forth in the October 23, 2013 Decision and Order of this Court and will be repeated herein only as necessary. Briefly stated, defendant Lawrence R. Jaques (hereinafter defendant) was plaintiff's bookkeeper for approximately 10 years and allegedly stole in excess of $450,000.00 between April 2006 and November 2012, primarily by charging personal purchases to plaintiff's business accounts. Plaintiff subsequently commenced this action against defendant and his wife, defendant Elizabeth W. Jaques (hereinafter Jaques), alleging that the pair jointly participated in the scheme. Specifically, plaintiff alleges five causes of action: (1) that defendants are liable for conversion; (2) that it is entitled to title and possession of the marital residence; (3) that it is entitled to moneys had and received; (4) that it is entitled to a constructive trust on the marital residence based on breach of fiduciary duty; and (5) that it is entitled to an accounting and disclosure of defendants' financial records.
Jaques subsequently filed a pre-answer motion to dismiss the complaint, which motion was granted to the extent that plaintiff's second and fourth causes of action were dismissed in their entirety. Cross appeals ensued and the decision was modified by Memorandum and Order of the Third Department dated April 2, 2015, with the second cause of action being reinstated as against defendant and the fourth cause of action being reinstated as against both defendant and Jaques (see 127 AD3d 1261, 1267 [2015] ). The parties appeared for a conference on July 7, 2015 and a Preliminary Conference Stipulation and Order (hereinafter PCSO) was issued. Presently before the Court is plaintiff's motion to preclude defendant from presenting any evidence at trial as to those items requested in its demand for production of documents for discovery and inspection and defendant's cross motion to dismiss, inter alia, the second cause of action as against him. The motion and cross motion will be addressed in seriatim.
Motion to Preclude
Plaintiff served its demand for production of documents for discovery and inspection on counsel for defendants on September 15, 2015. Counsel for defendants then served a response on behalf of Jaques on October 15, 2015, but served nothing relative to defendant. As a result, plaintiff filed the instant motion to preclude (see CPLR 3126[2] ).
Insofar as motions relating to disclosure are concerned, Uniform Rules for Trial Courts (22 NYCRR) § 202.7(a) provides, in pertinent part:
"[N]o motion shall be filed with the court unless there have been served and filed with the motion papers ... an affirmation that counsel has conferred with counsel for the opposing party in a good faith effort to resolve the issues raised by the motion."
The PCSO then provides as follows:
"Should any discovery disputes arise, prior to making a motion pursuant to CPLR 3042, 3124 and/or 3126, the parties shall (a) comply with the good faith requirements of the Uniform Rules for Trial Courts (22 NYCRR) § 202.7 ; and (b) contact [the] Court's Law Clerk, Jennifer P. Jeram, Esq., and appear at a conference with her in an attempt to resolve the issues."
Finally, the Court's Rules—available online at http://www.nycourts.gov/courts/4jd/mtrules/muller-rules.pdf—state:
"No discovery motion may be filed unless counsel personally confer to resolve the discovery issue in accordance with the Uniform Rules of Trial Courts (22 NYCRR) § 202.7 and, further, the motion papers demonstrate compliance with that section.
"Additionally, if the case is covered by a [PCSO], such Order requires that—prior to motion practice—a conference with the Judge's Law Clerk be held in an attempt to resolve the dispute. That conference shall be requested by letter for a date convenient to all counsel. Prior to the conference, each party shall provide the Court with a short letter outlining their position relative to the discovery dispute."
Here, plaintiff's counsel has not complied with the good faith requirements of the Uniform Rules for Trial Courts (22 NYCRR) § 202.7, having made no effort whatsoever to contact defense counsel before filing the instant motion. Plaintiff's counsel further failed to request a conference, as required in both the PCSO and the Court's Rules. Had plaintiff's counsel complied with these requirements, the issues raised in the motion—which apparently arose from defense counsel's mistaken belief that he represented only Jaques—would likely have been resolved. Specifically, defense counsel would have engaged in a more thorough review of his file and discovered that he did in fact appear on behalf of both defendants.
In his affirmation in opposition to the motion, Matthew Norfolk, Esq. explains that his law partner—Ronald Briggs, Esq.—initially handled the case, filing an answer on behalf of defendant in January 2013 and a pre-answer motion to dismiss on behalf of Jaques in February 2013. Mr. Briggs continued handling the case until the beginning of 2014, at which time Mr. Norfolk took over. Upon receiving the discovery demands directed to defendant, Mr. Norfolk searched the file and did not see an answer filed on defendant's behalf, as it had apparently been placed in a folder of draft documents rather than the pleadings folder. He then spoke with Mr. Briggs, who did not recall filing an answer on behalf of defendant. As a result, he advised counsel for plaintiff that he did not represent defendant. He then heard nothing further from counsel for plaintiff until the instant motion was filed.
Based upon the foregoing, plaintiff's motion to preclude is denied in its entirety.
Cross Motion to Dismiss
Defendant cross-moves to (1) dismiss the second cause of action as against him; (2) bar recovery on any conversions that occurred more than three years prior to the date of filing of the action; (3) bar recovery on any breaches of fiduciary duty that occurred more than three years prior to the date of filing of the action; and (4) bar recovery on any claims of moneys had and received which occurred more than six years prior to the date of filing of the action (see CPLR 3211[a][7] ).
Initially, plaintiff consents to dismissal of the second cause of action, as the Memorandum and Order issued by the Third Department expressly states that "New York does not recognize a cause of action for title, use and exclusive possession' of someone else's residence" (127 AD3d at 1263 ). The cross motion is therefore granted insofar as the first item of relief is concerned.
Turning now to the second item of relief, a three-year statute of limitations applies to a conversion cause of action and "runs from the date that the conversion took place, not from discovery of the theft" (id.; see CPLR 214[3] ; Vigilant Ins. Co. of Am. v. Housing Auth. of City of El Paso, Tex., 87 N.Y.2d 36, 44 [1995] ; Berman v. Goldsmith, 141 A.D.2d 487, 487 [1988] ). Further, "[t]he statute of limitations runs separately from each separate act of conversion; a series of conversions against the same person or entity is not considered a single transaction for such purpose" (127 AD3d at 1265 ; see Stanley v. Morgan Guar. Trust Co. of NY, 173 A.D.2d 390, 391 [1991] ).
In considering the conversion claims against Jaques, the Third Department found as follows: "As this action was commenced on December 21, 2012, the applicable statute of limitations bars recovery for any conversions ... alleged to have occurred more than three years prior to that date" (127 AD3d at 1266 ). This finding is equally applicable to the conversion claims against defendant. The cross motion is therefore granted to the extent that plaintiff is barred from recovering for any conversions that occurred more than three years prior to December 21, 2012.
With respect to the third item of relief, "[t]he statute of limitations for breach of fiduciary duty differs depending on whether the substantive remedy sought is purely monetary—giving rise to the three-year period applicable to injuries to property—or is equitable in nature—giving rise to a six-year period pursuant to CPLR 213(1)" (127 AD3d at 1265–1266 ; see CPLR 214 [4 ]; IDT Corp. v. Morgan Stanley Dean Witter & Co., 12 NY3d 132, 139 [2009] ).
Here, the fourth cause of action—and only cause of action alleging a breach of fiduciary duty—seeks a constructive trust on the marital residence, which relief is equitable in nature (see 127 AD3d at 1265 ). While the Third Department declined to dismiss the fourth cause of action as against Jaques—finding that it "contain[ed] allegations that fit within the cognizable legal theory of breach of fiduciary duty by [defendant] as aided and abetted by [Jaques]" (127 AD3d at 1264 )—it further found that "[t]he complaint does not sufficiently allege that plaintiff is entitled to a constructive trust against [Jaques]" (id. ). This finding was based upon the absence of any "allegations that [Jaques] was in a confidential or fiduciary relationship with plaintiff, that she made a promise or that a transfer was made in reliance on any such promise" (id. ). In contrast, the complaint clearly alleges that plaintiff is entitled to a constructive trust against defendant, who was found by the Third Department to be "in a confidential and fiduciary relationship of trust with plaintiff" (id.; see Rafferty Sand & Gravel, LLC v. Kalvaitis, 116 AD3d 1290, 1291 [2014] ). The Court therefore finds that the six-year statute of limitations is applicable and, as such, declines to grant that aspect of the cross motion which seeks to bar recovery on any breaches of fiduciary duty that occurred more than three years prior to the date of filing of the action (see Matter of Argondizza, 137 AD3d 670, 670 [2016] ).
The Court notes that plaintiff is barred from recovering for any breaches of fiduciary duty that occurred more than six years prior to December 21, 2012.
Insofar as the fourth item of relief is concerned, "[a] six-year statute of limitations applies to a cause of action for moneys had and received" (127 AD3d at 1266 ; see Bias Limud Torah v. County of Sullivan, 290 A.D.2d 856, 857 [2002], lv denied 98 N.Y.2d 610 [2002] ).
In considering the claims for moneys had and received against Jaques, the Third Department found as follows: "As this action was commenced on December 21, 2012, the applicable statute of limitations bars recovery for ... moneys had and received more than six years prior to that date" (127 AD3d at 1266 ). This finding is equally applicable to the claims for moneys had and received against defendant. The cross motion is therefore granted to the extent that plaintiff is barred from recovering for moneys had and received more than six years prior to December 21, 2012.
While plaintiff contends that defendant is barred from asserting a statute of limitations defense under the doctrine of equitable estoppel, the Court finds this contention to be without merit. Although the doctrine of equitable estoppel precludes a defendant from relying on a statute of limitations defense when plaintiff was prevented from commencing a timely action by reasonable reliance on defendant's fraud, misrepresentation or other affirmative misconduct, the doctrine "does not apply where the misrepresentation or act of concealment underlying the estoppel claim is the same act which forms the basis of [the] plaintiff's underlying substantive cause[s] of action" ' (127 AD3d at 1265, quoting Kosowsky v. Willard Mtn., Inc., 90 AD3d 1127, 1130–1131 [2011] ). Here, to support its estoppel argument, plaintiff relies on the same underlying conduct that forms the basis of the substantive causes of action—namely, defendant's deception of plaintiff. The doctrine of equitable estoppel is therefore inapplicable (see 127 AD3d at 1265 ).
Based upon the foregoing, defendant's cross motion is granted to the extent that (1) the second cause of action is dismissed as against him; (2) plaintiff is barred from recovering for any conversions that occurred more than three years prior to December 21, 2012; and (3) plaintiff is barred from recovering for moneys had and received more than six years prior to December 21, 2012. The cross motion is otherwise denied.
Therefore, having considered the Affirmation of James M. Brooks, Esq. with exhibits attached thereto, dated November 17, 2015, submitted in support of the motion; Affirmation of Matthew D. Norfolk, Esq. with exhibits attached thereto, dated November 24, 2015, submitted in opposition to the motion and in support of the cross motion; and Affidavit of James M. Brooks, Esq. with exhibits attached thereto, sworn to December 9, 2015, submitted in further support of the motion and in opposition to the cross motion, and oral argument having been heard on June 3, 2016 with Allison M. McGahay, Esq. appearing on behalf of plaintiff and Matthew D. Norfolk, Esq. appearing on behalf of defendants, it is hereby
ORDERED that plaintiff's motion to preclude is denied in its entirety; and it is further
ORDERED that defendant's cross motion is granted to the extent that (1) the second cause of action is dismissed as against him; (2) plaintiff is barred from recovering for any conversions that occurred more than three years prior to December 21, 2012; and (3) plaintiff is barred from recovering for moneys had and received more than six years prior to December 21, 2012; and it is further
ORDERED that defendant's cross motion is otherwise denied.
The original of this Decision and Order has been filed by the Court together with the Notice of Motion dated November 17, 2015, the Notice of Cross Motion dated November 24, 2015 and the submissions enumerated above. Counsel for defendants is hereby directed to promptly obtain a filed copy of the Decision and Order for service with notice of entry upon plaintiff in accordance with CPLR 5513.