Tolling of Statute of Limitations Against Fiduciary Based on Fiduciary's Concealment of Facts Cannot Be Based on Same Conduct That is the Basis for the Cause of Action

On May 7, 2021, Justice Emerson of the Suffolk County Commercial Division issued a decision in F.W. Sims, Inc. v. Simonelli, 2021 NY Slip Op. 50410(U), holding that the tolling of the statute of limitations against a fiduciary based on the fiduciary's concealment of information cannot be based on the same conduct that forms the basis of the cause of action, explaining:

A defendant may be estopped from pleading the statute of limitations when it was induced by fraud, misrepresentations, or deception to refrain from filing a timely action. The doctrine requires proof that the defendant made an actual misrepresentation or, if a fiduciary, concealed facts that he was required to disclose; that the plaintiff relied on the misrepresentation; and that the reliance caused the plaintiff to delay bringing a timely action. Equitable estoppel does not apply when the misrepresentation or act of concealment underlying the estoppel claim is the same act that forms the basis of the plaintiff's underlying substantive cause of action. The plaintiffs rely on the same acts that underlie their fraud claim to support their fraudulent concealment argument. Accordingly, equitable estoppel does not apply.

(Internal quotations and citations omitted) (emphasis added).

It is not unusual for the statute of limitations to be an issue in complex commercial litigation. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding whether claims are barred by the statute of limitations.