fraudulent conveyance statute of limitations

As the Second Department explained in Metzger Jr. The six-year constructive fraud statute of limitations also applies to a host of causes of action under the New York Debtor and Creditor Law (DCL) alleging various permutations of fraud without actual intent. Constructive fraud claims generally eliminate the element of “intent to defraud” applicable to actual fraud claims, and replace that with requiring some form of special relationship between the parties, such a fiduciary duty. Thus, the straight six-year statute of limitations applies to constructive fraud claims, accruing on the date of the alleged fraud - without regard to when the fraud was discovered or could have been discovered. The alleged fraud occurred, at the latest, on January 22, 2004, but plaintiffs did not sue until July 13, 2015. Ctr., 213 AD2d 167, 168, lv dismissed in part and denied in part 86 NY2d 882 ). does not apply to constructive fraud” ( Monaco v New York Univ. The court properly dismissed the second cause of action (constructive fraud) as time-barred. As to the statute of limitations pertaining to constructive fraud claims, the Court stated: The First Department in Berman was not particularly informative in laying out the relevant facts, but it did set out the law fairly succinctly.

The cases reveal that the generous statute of limitations in CPLR 213(8), allowing for an extended period of two years from the actual or with reasonable diligence discovery of the fraud, does not apply to these other fraud claims that do not require actual intent to defraud.Ī new Appellate Division First Department decision notes this distinction and analyzes the issues under CPLR 213(8) as to whether the plaintiff could have discovered the alleged actual fraud within two years of bringing the case – Berman v Holland & Knight, LLP, 2017 NY Slip Op 08489 (1 st Dep’t Decided on December 5, 2017).Ĭonstructive Fraud Statute of Limitations These are generally known as constructive fraud or negligent misrepresentation. There are various causes of action in the nature of fraud that do not require actual intent to defraud. I explain below.ĬPLR 213(8) provides that for “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.” Thus, the CPLR cannot be taken literally on its face. The New York CPLR has a fairly straightforward provision setting forth the statute of limitations for “fraud.” The case law, however, adds significant embellishments. AUTHOR’S UPDATE: Please see my December 2019 Post: “ New York’s New Voidable Transactions Act Entirely Replaces its Fraudulent Conveyance Law.”

Fraudulent conveyance statute of limitations