New York has no applicable statute of limitations longer than 6 years, and this case was brought too late.  That is the holding in Epiphany Community Nursery Sch. v Levey  August 7, 2017
Supreme Court, New York County  Docket Number: 654655/2016  Judge: Shirley Werner Kornreich.  This shocking story of monies siphoned off by an unfaithful husband from the wife’s New York school is one where a discovery statute of limitations in fraud does not work.

“The Gruppo Levey Defendants are currently before this court in an unrelated action, styled Pensmore Investments, LLC v Gruppo, Levey & Co., Index No. 650002/2014 (the Pensmore Action), concerning their default on a settlement agreement. The underlying case and settlement resulted in protracted litigation over their alleged financial improprieties. See Pensmore Action, Dkt. 495 (granting summary judgment on claim to pierce corporate veils of GLC, GLH and another related entity).3 An externality of the Pensmore Action was the public revelation that Hugh and Claire, longtime business partners, were having an affair. Predictably, the aftermath was an acrimonious divorce proceeding between Hugh and his now ex-wife, nonparty Wendy Levey (Wendy),4 which recently settled. Part of the fallout is the instant dispute over Hugh’s involvement with the School, a New York not-for-profit corporation that operates a kindergarten and nursery school on Manhattan’s Upper East Side.

The School’s complaint contains well pleaded allegations of serious financial improprieties committed by Hugh. Nonetheless, while this case would have survived a motion to dismiss had it been commenced years ago, at this juncture, the claims in this action are dismissed because they are time-barred. ”

“The first scheme occurred in 2002 and 2003, more than a decade before this action was commenced in 2016. There is no applicable New York statute of limitations longer than 6 years. See CPLR 213 (claims with 6-year statute of limitations, including breach of contract, fraud, and accounting) & 214 (claims with 3-year statute of limitations, including conversion and malpractice). 11 The School recognizes this, but relies on CPLR 213(8), which provides that in “an action based upon fraud[,] the time within which the action must be commenced shall be the greater of six years from the date the cause of action accrued or two years from the time the plaintiff or the_ person under whom the plaintiff claims discovered the fraud, or could with reasonable diligence have discovered it” (emphasis added). It is well settled that “[t]he inquiry as to whether a plaintiff could, with reasonable diligence, have discovered the fraud turns on whether the plaintiff was possessed of knowledge of facts from which [the fraud] could be reasonably inferred.” Sargiss v Magarelli, 12 NY3d 527, 532 (2009) (emphasis added; quotation marks omitted); see Aozora Bank. Ltd. v Deutsche Bank Secs. Inc., 13 7 AD3d 685, 689 (1st Dept 2016) (“Where the circumstances are such as to suggest to a person of ordinary intelligence the probabi,Iity that he has been defrauded, a duty of inquiry arises, and if he omits that inquiry when it would have developed the truth, and shuts his eyes to the facts which call for investigation, knowledge of the fraud will be imputed to him.”) (emphasis added), quoting CIFG Assurance N. Am., Inc. v Credit Suisse Secs. (USA) LLC, 128 AD3d 607, 608 (!st Dept 2015), and citing Gutkin v Siegal, 85 AD3d 687, 688 (I st Dept 2011) (“The test as to when fraud should with reasonable diligence have been discovered is an objective one.”) (emphasis added).”

 

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Andrew Lavoott Bluestone

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened…

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened his private law office and took his first legal malpractice case.

Since 1989, Bluestone has become a leader in the New York Plaintiff’s Legal Malpractice bar, handling a wide array of plaintiff’s legal malpractice cases arising from catastrophic personal injury, contracts, patents, commercial litigation, securities, matrimonial and custody issues, medical malpractice, insurance, product liability, real estate, landlord-tenant, foreclosures and has defended attorneys in a limited number of legal malpractice cases.

Bluestone also took an academic role in field, publishing the New York Attorney Malpractice Report from 2002-2004.  He started the “New York Attorney Malpractice Blog” in 2004, where he has published more than 4500 entries.

Mr. Bluestone has written 38 scholarly peer-reviewed articles concerning legal malpractice, many in the Outside Counsel column of the New York Law Journal. He has appeared as an Expert witness in multiple legal malpractice litigations.

Mr. Bluestone is an adjunct professor of law at St. John’s University College of Law, teaching Legal Malpractice.  Mr. Bluestone has argued legal malpractice cases in the Second Circuit, in the New York State Court of Appeals, each of the four New York Appellate Divisions, in all four of  the U.S. District Courts of New York and in Supreme Courts all over the state.  He has also been admitted pro haec vice in the states of Connecticut, New Jersey and Florida and was formally admitted to the US District Court of Connecticut and to its Bankruptcy Court all for legal malpractice matters. He has been retained by U.S. Trustees in legal malpractice cases from Bankruptcy Courts, and has represented municipalities, insurance companies, hedge funds, communications companies and international manufacturing firms. Mr. Bluestone regularly lectures in CLEs on legal malpractice.

Based upon his professional experience Bluestone was named a Diplomate and was Board Certified by the American Board of Professional Liability Attorneys in 2008 in Legal Malpractice. He remains Board Certified.  He was admitted to The Best Lawyers in America from 2012-2019.  He has been featured in Who’s Who in Law since 1993.

In the last years, Mr. Bluestone has been featured for two particularly noteworthy legal malpractice cases.  The first was a settlement of an $11.9 million dollar default legal malpractice case of Yeo v. Kasowitz, Benson, Torres & Friedman which was reported in the NYLJ on August 15, 2016. Most recently, Mr. Bluestone obtained a rare plaintiff’s verdict in a legal malpractice case on behalf of the City of White Plains v. Joseph Maria, reported in the NYLJ on February 14, 2017. It was the sole legal malpractice jury verdict in the State of New York for 2017.

Bluestone has been at the forefront of the development of legal malpractice principles and has contributed case law decisions, writing and lecturing which have been recognized by his peers.  He is regularly mentioned in academic writing, and his past cases are often cited in current legal malpractice decisions. He is recognized for his ample writings on Judiciary Law § 487, a 850 year old statute deriving from England which relates to attorney deceit.