Opinion
12115/03.
Decided April 7, 2006.
Upon the foregoing papers, the motion of the sole remaining defendant, The College of Staten Island Foundation, Inc. ("CSI"), for dismissal of the complaint is granted, and the complaint is dismissed.
This pre-answer motion arises out of a dispute between plaintiff and CSI, wherein plaintiff seeks reimbursement for an endowment in the amount of $150,000.00 which, it is claimed, was not used for the purposes for which it was given. As a result, plaintiff wishes to transfer the donation to his alma mater, Baruch College. In his complaint, plaintiff alleges two causes of action, the first for breach of contract, and the second for fraud and misrepresentation. CSI moves for dismissal of both causes of action on the grounds that (1) the complaint fails to state a cause of action and is defective on its face (see CPLR 3211[a][7], (2) documentary evidence provides a complete defense to the action ( see CPLR 3211 [a][1]), (3) the allegations of fraud are not pleaded with the particularity required by CPLR 3013, and (4) the claim is barred by the six year statute of limitations set forth in CPLR 213(2).
The time frame during which the dispute developed, as evidenced by correspondence between the respective parties, is summarized as follows:
On September 14, 1992, CSI acknowledged, in writing, plaintiff's pledge of $100,000.00 (later increased by plaintiff to $150,000.00) to its "Illuminating the Future" campaign. As is applicable, this letter included the observation that plaintiff's "pledge of unrestricted monies [would] allow the college to pursue new initiatives and invigorate the intellectual life on campus" ( see Defendant's Exhibit C). Thereafter, on December 7, 1992, plaintiff donated the sum of $15,000.00 to CSI with a notation to " please use these funds for the acquisition of new books and periodicals" ( id.). CSI thanked plaintiff for this donation in a letter dated December 23, 1992, wherein it was also stated that the gift would enable CSI to update its nursing collection ( id.).
Approximately one year later, i.e., in October of 1993, CSI acknowledged, in writing, plaintiff's gift of stock in partial fulfillment of his $150,000.00 pledge, stating that the donation would be added to the Jerome S. Berg Library Endowment ( id.). On October 27, 1994, CSI advised plaintiff by letter that its auditors needed written confirmation of plaintiff's pledge balance of $67,493.00, and included on the return document a space for plaintiff to "indicate if the amount [indicated] is in agreement with [plaintiff's] records." In the event of a difference, plaintiff was asked to "provide any information that will assist [the] auditors in reconciling the differences." It is uncontroverted that Plaintiff signed and returned this instrument without making any changes ( see Affidavit in Reply, Exhibit D).
Some two and a half years later, i.e., in April of 1995, CSI wrote to plaintiff thanking him for the final payment on his $150,000.00 pledge for the Library Endowment Fund ( see Defendant's Exhibit C). However, on December 9, 1996, plaintiff's agent (Robert Diaz) requested the return of plaintiff's donation for essentially the same reasons stated in the underlying complaint ( id.). Thus, plaintiff seeks (in his first cause of action) $150,000.00 to compensate him for defendant's alleged "misuse of [the] donation and restricted earnings without obtaining a written agreement with Donor as called for by the statutes and By-Laws of the College of Staten Island," and a like amount (in his second cause of action) for deceiving, defrauding, and inducing plaintiff to make a gift/donation in the sum of $150,000.00 (see Defendant's Exhibit A). On April 21, 1997, an audit of plaintiff's donation was completed and he was provided with a copy of the report. This action was commenced on July 10, 2003.
In support of dismissal, defendant argues, in relevant part, that the December 9, 1996 letter from plaintiff's agent ( see Defendant's Exhibit C) demonstrates plaintiff's knowledge of the facts underlying his present claims of breach, fraud, misuse and misrepresentation fully eight years prior to the commencement of this action. Moreover, defendant alleges that any breach could not have occurred later than April of 1995, when defendant acknowledged receipt of plaintiff's final installment of $9,693.00 to the Library Endowment Fund. Finally, defendant contends that plaintiff cannot obtain damages for breach of the "endowment" agreement while simultaneously arguing that no agreement ever existed between himself and CSI as required by its by-laws and section 513(b) of the Not-For-Profit Corporation Law ( see Plaintiff's Exhibits B and C).
In opposition, plaintiff argues, in essence, that only a small portion of his donation was left unrestricted in order to enable CSI to obtain matching funds for its library while approval was pending under Internal Revenue Code § 501(c)(3). According to plaintiff, he was never afforded the opportunity to designate the use for the substantial balance of his "endowment", which was wrongfully diverted by CSI to its library fund. Moreover, plaintiff alleges that the claims set forth in the complaint constitute "continuing wrongs" which are perpetuated each year that he is not provided with a status report as to his donation.
The action is dismissed, with prejudice.
The statute of limitations for breach of contract is six years from the date of accrual ( see CPLR § 213). "In New York, a breach of contract cause of action accrues at the time of the breach. The statute runs from the time of the breach though no damage occurs until later" ( Ely-Cruikshank Co., v. Bank of Montreal, 81 NY2d 399, 402, internal quotation marks and citations omitted). Here, plaintiff was aware of the parties' disagreement as to the nature of the restrictions, if any, encumbering his donation as early as September 1992, and in no event later than April 1995. In fact, even using the date of the audit report (April 21, 1997) as the accrual date, this action was commenced nearly three months after the six year statute of limitations had expired.
Plaintiff's second cause of action alleging fraud and misrepresentation must also be dismissed. A cause of action for fraud must be commenced within six years of the alleged wrong or two years from the time of discovery, whichever is later ( see CPLR 203[g]; 213 [8]). A cause of action for fraudulent inducement arises, for Statute of Limitations purposes, at the time of execution ( Rogal v. Wechsler, 135 AD2d 384 [1st Dept 1987]). Hence, the cause of action for fraud accrued either in 1992, when plaintiff made his pledge, or upon discovery, which could not have occurred later than the date on which plaintiff received the April 21, 1997 audit report. In either event, the action is time-barred.
Moreover, even assuming arguendo that plaintiff's second cause of action was timely interposed, it is not pleaded with the requisite specificity. Pursuant to CPLR 3016(b), "where a cause of action is based upon misrepresentation [or] fraud . . . the circumstances constituting the wrong shall be stated in detail" ( see Mountain Lion Baseball v. Gaiman, 263 AD2d 636 [3rd Dept 1999]). Here, the allegations of fraud fail to include, inter alia, the date on which plaintiff claims to have discovered the alleged fraud; the nature of the alleged misrepresentation(s); and to whom or by whom the alleged misrepresentation(s) were made.
Finally, it is well settled that "a cause of action for fraud does not arise when the only alleged fraud relates to a breach of contract. Similarly, a cause of action sounding in fraud may not be sustained where the pleading alleges that the party to be charged did not intend to perform the contract at the time the contract was executed" ( Manshul Constr Corp. v. City of New York, 143 AD2d 333, 336 [2nd Dept 1988] internal quotation marks and citations omitted; see Todd v. Grandoe Corp., 302 AD2d 789, 791 [3rd Dept 2003]). In this case, plaintiff alleges only that CSI fraudulently induced him into making the donation of $150,000.00 without ever intending to provide plaintiff with a written agreement delineating the use and restrictions on the gift. Thus, the fraud at issue "is indistinguishable from the breach of contract, and no fraud cause of action arises" ( Todd v. Grandoe, 302 AD2d 789 at 791).
Accordingly, it is
ORDERED, that the motion is granted and the complaint is dismissed, with prejudice, and it is further
ORDERED, that the Clerk enter judgment in conformity herewith.