Reich v. Venzon (In re Reich)

207 A.D.3d 1116

172 N.Y.S.3d 289

In the MATTER OF the ESTATE OF William Z. REICH, Deceased.

Eric Reich and Justin Reich, Petitioners-Respondents;

v.Catharine M. Venzon, Executor of the Estate of William Z. Reich, Deceased, Respondent-Appellant.

312

CA 21-01022

Supreme Court, Appellate Division, Fourth Department, New York.

Entered: July 8, 2022

RICHARD T. SULLIVAN, PLLC, BUFFALO (RICHARD T. SULLIVAN OF COUNSEL), FOR RESPONDENT-APPELLANT.

LIPPES MATHIAS LLP, BUFFALO (THOMAS J. GAFFNEY OF COUNSEL), FOR PETITIONERS-RESPONDENTS.

PRESENT: CENTRA, J.P., PERADOTTO, LINDLEY, CURRAN, AND BANNISTER, JJ.

MEMORANDUM AND ORDER

It is hereby ORDERED that the order so appealed from is unanimously reversed on the law without costs, the first affirmative defense in each answer is reinstated, the motions of respondent are granted and the claims of petitioners are dismissed.

Memorandum: William Z. Reich (decedent) and his sons, petitioners, formed a corporate entity together. In 2011, decedent removed funds from the corporate entity, and he later acknowledged that some of those funds belonged to petitioners. Decedent died in 2018 without returning the funds owed to petitioners. Decedent's Last Will and Testament was admitted to probate and provided that his entire estate was to be distributed to his wife, Catharine M. Venzon (respondent), who was named as executor of the estate. In 2019, petitioners each filed a claim against the estate seeking to recover his share of the funds that decedent had removed from the corporate entity. According to petitioners, they stated claims for unjust enrichment and money had and received. Respondent filed answers raising various affirmative defenses, including that the claims were barred by the statute of limitations, and later moved to dismiss the claims pursuant to CPLR 3211 (a) (5) on that basis. Surrogate's Court denied respondent's motions and dismissed the statute of limitations defenses. The Surrogate determined that, while petitioners’ claims were subject to a six-year statute of limitations, decedent had acknowledged in sworn deposition testimony in 2014 that he owed petitioners the funds and that this acknowledgment restarted the running of the statute of limitations. The Surrogate concluded that because the claims were filed within the statute of limitations, measured from decedent's acknowledgment in 2014, the claims were timely. Respondent appeals, and we reverse.

Initially, respondent contends that the allegations in petitioners’ claims do not state a claim for unjust enrichment. We reject that contention (see generally Van Scoter v. Porter , 193 A.D.3d 1401, 1402, 147 N.Y.S.3d 801 [4th Dept. 2021] ). We agree with respondent, however, that the Surrogate erred in denying the motions. Respondent had the initial burden of establishing that petitioners’ claims were barred by the statute of limitations (see SCPA 102 ; CPLR 3211 [a] [5] ; see also U.S. Bank N.A. v. Brown , 186 A.D.3d 1038, 1039, 130 N.Y.S.3d 146 [4th Dept. 2020] ). "The time within which an action must be commenced, except as otherwise expressly prescribed, shall be computed from the time the cause of action accrued to the time the claim is interposed" ( CPLR 203 [a] ). Thus, respondent was required to establish, inter alia, when petitioners’ claims accrued (see generally U.S. Bank N.A. , 186 A.D.3d at 1039, 130 N.Y.S.3d 146 ).

Regarding the claims for unjust enrichment, we conclude that, even assuming, arguendo, that those claims were each subject to a six-year statute of limitations (see CPLR 213 [1] ; Matter of Trombley , 137 A.D.3d 1641, 1642-1643, 29 N.Y.S.3d 712 [4th Dept. 2016] ; Boardman v. Kennedy , 105 A.D.3d 1375, 1376, 964 N.Y.S.2d 337 [4th Dept. 2013] ), respondent established that the claims were not commenced within six years from the accrual date. The statute of limitations for an unjust enrichment claim "starts to run upon the occurrence of the wrongful act giving rise to a duty of restitution" ( Congregation Yetev Lev D'Satmar, Inc. v. 26 Adar N.B. Corp. , 192 A.D.2d 501, 503, 596 N.Y.S.2d 435 [2d Dept. 1993] ; see Boardman , 105 A.D.3d at 1376-1377, 964 N.Y.S.2d 337 ). Here, that claim accrued when decedent removed the funds in 2011. Similarly, the claim for money had and received has a six-year statute of limitations, which also accrued on the date decedent withdrew the money in 2011 (see County of Niagara v. Town of Royalton , 48 A.D.3d 1072, 1072, 849 N.Y.S.2d 822 [4th Dept. 2008] ). Thus, the unjust enrichment and money had and received claims were time-barred by the time petitioners filed their claims in 2019.

Inasmuch as respondent met her initial burden, the burden shifted to petitioners to raise a question of fact whether the statute of limitations was tolled or otherwise inapplicable, or whether they actually commenced this proceeding within the applicable limitations period (see U.S. Bank N.A. , 186 A.D.3d at 1039, 130 N.Y.S.3d 146 ; Barry v. Cadman Towers, Inc. , 136 A.D.3d 951, 952, 25 N.Y.S.3d 342 [2d Dept. 2016], lv denied 28 N.Y.3d 913, 2017 WL 524495 [2017] ). Petitioners did not dispute that they failed to commence the claims within six years from the relevant accrual date,...