SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
138
CA 12-01116
PRESENT: SMITH, J.P., PERADOTTO, LINDLEY, WHALEN, AND MARTOCHE, JJ.
LLORD BYRON BROOKS, III, FRANK FLAY,
RICHARD S. LAING, JR. AND FRANK WICKINS,
PLAINTIFFS-APPELLANTS,
V MEMORANDUM AND ORDER
AXA ADVISORS, LLC AND RICHARD JEFFREY JEROME,
DEFENDANTS-RESPONDENTS.
(APPEAL NO. 2.)
THE PEARL LAW FIRM, P.A., PITTSFORD (JASON J. KANE OF COUNSEL), FOR
PLAINTIFFS-APPELLANTS.
WINGET, SPADAFORA & SCHWARTZBERG, LLP, NEW YORK CITY (STEVEN E. MELLEN
OF COUNSEL), AND HODGSON RUSS LLP, BUFFALO, FOR
DEFENDANTS-RESPONDENTS.
Appeal from an order of the Supreme Court, Erie County (Patrick
H. NeMoyer, J.), dated December 6, 2011. The order denied that part
of plaintiffs’ motion seeking leave to renew, granted that part of
plaintiffs’ motion seeking leave to reargue, and upon reargument,
adhered to the court’s prior determination.
It is hereby ORDERED that the order so appealed from is
unanimously modified on the law by granting the motion of defendants
in its entirety and dismissing the complaint and as modified the order
is affirmed without costs.
Memorandum: Plaintiffs, former employees of Niagara Mohawk Power
Corporation, commenced this action seeking damages allegedly resulting
from their purchases of a variable annuity upon the recommendation of
defendant Richard Jeffrey Jerome, a financial consultant employed by
defendant AXA Advisors, LLC. Those purchases were made between 1999
and 2003, and the instant action was commenced on April 4, 2011. The
complaint asserted causes of action for fraud, negligence, breach of
contract and breach of fiduciary duty. In lieu of serving an answer,
defendants moved to dismiss the complaint contending, inter alia, that
it was time-barred (see CPLR 3211 [a] [5]). Supreme Court granted the
motion in part by dismissing as time-barred the fraud and breach of
contract causes of action as asserted by all four plaintiffs, and by
dismissing as time-barred the remaining two causes of action, for
negligence and breach of fiduciary duty, only as asserted by two of
the four plaintiffs. Plaintiffs moved for leave to renew and reargue
defendants’ motion, and the court granted reargument but denied
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CA 12-01116
renewal. Upon reargument, the court adhered to its prior
determination. We note at the outset that plaintiffs appealed from
both the initial order in appeal No. 1 and the order issued upon
reargument in appeal No. 2, while defendants cross-appealed only from
the order in appeal No. 1. We exercise our discretion, however, to
treat defendants’ notice of cross appeal as one taken from the order
in appeal No. 2 (see e.g. Kanter v Pieri, 11 AD3d 912, 912), and we
dismiss plaintiffs’ appeal from the order in appeal No. 1 (see Loafin’
Tree Rest. v Pardi [appeal No. 1], 162 AD2d 985, 985).
We conclude that the court properly granted that part of
defendants’ motion with respect to the fraud cause of action. The
statute of limitations for fraud is “the greater of six years from the
date the cause of action accrued or two years from the time the
plaintiff[s] . . . discovered the fraud, or could with reasonable
diligence have discovered it” (CPLR 213 [8]; see CPLR 203 [g]; Sargiss
v Magarelli, 12 NY3d 527, 532). Although the accrual dates differ for
each plaintiff, defendants established that the action was commenced
more than six years from the dates of the alleged acts of fraud, thus
shifting the burden to plaintiffs to show that the two-year discovery
exception applies (see Vilsack v Meyer, 96 AD3d 827, 828; Siegel v
Wank, 183 AD2d 158, 159). The record supports the court’s
determination that plaintiffs possessed knowledge of facts from which
they reasonably could have discovered the alleged fraud soon after it
occurred, and in any event more than two years prior to the
commencement of the action (see Giarratano v Silver, 46 AD3d 1053,
1056; Prestrandrea v Stein, 262 AD2d 621, 622-623).
We further conclude that the court properly granted that part of
defendants’ motion with respect to the breach of contract cause of
action (see CPLR 213 [2]). That cause of action accrued upon the
alleged breach of contract by defendants, which occurred more than six
years prior to the commencement of the action, regardless of whether
the damage to plaintiffs was sustained later and plaintiffs were
unaware of the breach at the time it occurred (see Ely-Cruikshank Co.
v Bank of Montreal, 81 NY2d 399, 402-403).
The court also properly granted those parts of defendants’ motion
with respect to the negligence and breach of fiduciary duty causes of
action insofar as they are asserted by plaintiffs Llord Byron Brooks,
III and Frank Wickins, but the court should have granted those parts
of defendants’ motion with respect to the remaining two plaintiffs as
well. We therefore modify the order in appeal No. 2 by granting
defendants’ motion in its entirety. Contrary to the court’s
determination, the negligence cause of action is not one alleging
professional malpractice, inasmuch as defendants are not professionals
for purposes of malpractice liability and the continuous
representation toll of the three-year statute of limitations (see CPLR
214 [6]; see generally Chase Scientific Research v NIA Group, 96 NY2d
20, 28-29). Rather, the three-year limitations period for injury to
property applies (see CPLR 214 [4]; Chase Scientific Research, 96 NY2d
at 30). The negligence cause of action accrued on the dates of injury
to plaintiffs (see Kronos, Inc. v AVX Corp., 81 NY2d 90, 94), which in
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CA 12-01116
the case of each plaintiff occurred more than three years prior to the
commencement of the action. Finally, the breach of fiduciary duty
cause of action is time-barred as asserted by each plaintiff under
both the three-year statute of limitations for injury to property (see
CPLR 214 [4]; Yatter v Morris Agency, 256 AD2d 260, 261) and the six-
year statute of limitations for fraud (see CPLR 213 [8]; Kaufman v
Cohen, 307 AD2d 113, 119).
Entered: March 15, 2013 Frances E. Cafarell
Clerk of the Court