State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: August 6, 2015 519663 

________________________________

JO ANN SOGHANALIAN, Formerly 

Known as JO ANN COLETTI,

RespondentAppellant,

v MEMORANDUM AND ORDER

JOHN W. YOUNG et al.,

AppellantsRespondents,

et al., 

Defendant.

________________________________

Calendar Date: June 1, 2015

Before: Lahtinen, J.P., Lynch, Devine and Clark, JJ.

__________

McDonough & Artz, PC, Binghamton (Philip L. Artz of

counsel), for appellants-respondents.

Schlather, Stumbar, Parks & Salk, LLP, Ithaca (Raymond M.

Schlather of counsel), for respondent-appellant.

__________

Clark, J.

Cross appeals from an order of the Supreme Court (Lebous,

J.), entered December 18, 2013 in Broome County, which, among

other things, partially granted certain defendants' motion for

summary judgment dismissing the complaint against them.

Defendant John W. Young served as legal counsel to

plaintiff and defendant Zaven Soghanalian, plaintiff's spouse,

who were involved in domestic and international business and real

estate transactions. In 1985, Young formed defendant Stuart
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Realty Enterprises, Inc. (hereinafter SRE) at Soghanalian's

request to protect the assets of plaintiff and Soghanalian from

creditors. Young has been the majority shareholder of SRE since

its inception even though SRE's assets were acquired with funds

provided by plaintiff and Soghanalian. It appears that plaintiff

did not know that Young was a shareholder and believed for many

years that she and Soghanalian were the only shareholders. Over

time, the business and legal relationship between Young,

Soghanalian and plaintiff grew complex and tumultuous until Young

formally terminated their attorney-client relationship in 2008. 

In May 2012, plaintiff commenced this action seeking

damages for fraud (first five causes of action) and an

involuntary dissolution of SRE (sixth cause of action). As

relevant here, all of the defendants named in the complaint

except Soghanalian moved for summary judgment dismissing the

complaint against them, based upon, among other things, the

statute of limitations. Supreme Court partially granted the

motion by dismissing the five causes of action based upon fraud. 

Young and SRE (hereinafter collectively referred to as

defendants)1 appeal and plaintiff cross-appeals.2

An action based upon fraud must be commenced within "the

greater of six years from the date the cause of action accrued or

two years from the time the plaintiff . . . discovered the fraud,

or could with reasonable diligence have discovered it" (CPLR 213

[8]). The latter part of this rule is called the discovery

exception, and its application is generally "a mixed question of

law and fact which should not be resolved summarily unless it

conclusively appears that the plaintiff had knowledge of facts

which should have caused him or her to inquire and discover the

1 Supreme Court noted in its decision that plaintiff

discontinued her claims against the other three defendants who

had also moved for summary judgment.

2 Although defendants appealed from the order, they have

abandoned that appeal by failing to address it in their brief

(see Matter of Neroni v Granis, 121 AD3d 1312, 1314 n 2 [2014],

appeal dismissed sub nom. Martens v Neroni, 25 NY3d 957 [2015]).
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alleged fraud" (Hoffman v Cannone, 206 AD2d 740, 741 [1994]; see

Trepuk v Frank, 44 NY2d 723, 724-725 [1978]). Additionally,

where, as here, a fiduciary relationship is involved, the

doctrine of equitable estoppel may be invoked to defeat a statute

of limitations defense so long as the plaintiff establishes that

he or she commenced the action within a reasonable amount of time

(see Doe v Holy See [State of Vatican City], 17 AD3d 793, 794-796

[2005], lv denied 6 NY3d 707 [2006]). 

Here, plaintiff contends that her fraud claims are timely

because Young concealed the alleged fraud from her until October

2008, when, after terminating his legal representation of

plaintiff, Young sent a letter to plaintiff's counsel asserting

that he was the majority shareholder of SRE. While plaintiff

admits that this alerted her to the alleged fraud, she waited

until May 2012 – nearly four years later – to commence the

instant action. Although we do not discredit plaintiff's

assertion that she did not know of the alleged fraud before 2008,

her fraud claims are time-barred because the discovery exception

allowed plaintiff only two years from the date that she should

have reasonably discovered the alleged fraud to commence the

action (see Durazinski v Chandler, 41 AD3d 918, 919-920 [2007];

Hoffman v Cannone, 206 AD2d at 741). Moreover, plaintiff is not

saved by the doctrine of equitable estoppel because she failed to

commence the action within a reasonable amount of time after

discovering the alleged fraud (see Doe v Holy See [State of

Vatican City], 17 AD3d at 796). Thus, although we find Young's

conduct disturbing, we must affirm the dismissal of plaintiff's

fraud claims.

To the extent not discussed herein, we have considered

plaintiff's remaining arguments and have found them to be without

merit.

Lahtinen, J.P., Lynch and Devine, JJ., concur.
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ORDERED that the order is affirmed, without costs.

ENTER:

Robert D. Mayberger

Clerk of the Court