Gift of Manhattan Townhouse to College Is Valid; Complaint Inadequately Pleaded Fraud Claims
MURPHY v. ANDREW COLLEGE, 04-CV-7717—The Complaint in this action alleges that Defendant Andrew College obtained an invalid deed to the remainder interest of Ms. Liddie Mae Murphy's residence. Specifically, it is alleged that the deed is an invalid testamentary instrument, and was otherwise obtained via fraud and undue influence. As relief, the Court is asked to impose a constructive trust over the residence and to grant punitive damages.
Matthew Dollinger, Esq.
Dollinger, Gonski & Grossman
Counsel for Plaintiff
Charles M. Mirotznik, Esq.
Law Offices of Charles M. Mirotznik
Counsel for Plaintiff
Arthur G. Jacoby, Esq.
Richard Young Im, Esq.
Herrick, Feinstein LLP
Counsel for Defendant
Andrew College brought this Motion to Dismiss pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim and alleging that the Statute of Limitations had expired. However, after the Motion was filed, Ms. Murphy passed away. A niece, Nancy Abercrombie, was appointed Administratrix of Ms. Murphy's estate, and a dispute ensued between Abercrombie and Andrew College over the validity of Ms. Murphy's Will. That dispute is pending before a Surrogate's Court in New York.
Abercrombie also was substituted as Plaintiff in this action. She then moved to have this case dismissed on the ground that the probate exception to the Court's diversity jurisdiction applied. In the alternative, Abercrombie moved to have the Court abstain, in light of proceedings ongoing in New York Surrogate's Court.
For the reasons discussed below, Abercrombie's application that this Court dismiss or stay this action is DENIED, and Defendant's Motion is GRANTED without prejudice to Abercrombie to seek leave to file an amended complaint.
A. Ms. Murphy and Andrew College
Unless otherwise noted, the following facts are not in dispute. Liddie Mae Murphy graduated in 1937 from Andrew College, a private, two-year liberal arts college in Georgia. Ms. Murphy maintained a close relationship with her alma mater and, indeed, credited the College for her successful career as an entertainer and writer. On December 14, 1967, Ms. Murphy purchased a townhouse ('the Property') in Manhattan. (Compl. ¶8) Over twenty years later, on or about March 23, 1990, Ms. Murphy executed a deed of conveyance ('Deed') and a Remainder Charitable Contribution Agreement ('Contribution Agreement') through which she gifted the Property, located at 45 West 84th Street, New York, New York, to Andrew College and retained a life interest for herself. (Compl. ¶¶9, 18; Jakoby Decl. Ex. C) Ms. Murphy was represented by counsel at the time she executed the Deed and the Contribution Agreement. (Compl. ¶25) Andrew College took possession of the Deed, and later recorded it in the Office of the City Register of the County of New York on March 11, 1992.[FN1] (Compl. ¶14; Jakoby Decl. Ex. D)
B. The Complaint and the Motion to Dismiss
This action was commenced in New York State Supreme Court on July 20, 2004 (Def.'s Mem. of Law in Support of Def.'s Mot. To Dismiss ('Def.'s Mem.') Ex. A) and was removed to this Court pursuant to 28 U.S.C. §1441 on September 29, 2004.[FN2] According to the Complaint, Ms. Murphy did not intend to convey an irrevocable inter vivos gift to Andrew College at the time the Deed and Contribution Agreement were signed. (Compl. ¶23) Instead, the Complaint alleges that Ms. Murphy thought the Deed was revocable and would not have signed it otherwise. (Compl. ¶24) The Complaint also alleges that Ms. Murphy was inadequately counseled, (Compl. ¶25) that Andrew College made fraudulent statements and exercised undue influence over her by taking advantage of her 'advanced age, lack of business savvy, vulnerability, [and] loneliness,' as well as the 'affection and esteem' she held for the college. (Compl. ¶¶27, 31.)
Andrew College filed a Motion to Dismiss on March 2, 2005, asserting that all of the claims in the Complaint are barred by the statute of limitations, that the Deed is not subject to the testamentary formalities required under New York law, and that the fraud allegations are insufficiently particularized. Plaintiff timely responded to the Motion, but the Court held off in its decision to permit the parties to complete the mediation process they had begun in January 2005.
C. Mediation and Guardianship
At a pre-motion conference held in December 2004, the Parties expressed a willingness to pursue mediation, which the Court ordered. (Hr'g Tr. 7, Aug. 22, 2005) It had been the Court's (and Andrew College's) expectation that the Parties themselves would participate in the mediation. However, counsel for Plaintiff advised the mediator and counsel for Andrew College the day of the first mediation session on January 14, 2005 that Ms. Murphy apparently had been hospitalized and that she would not be attending the mediation. (Hr'g Tr. 8, Aug. 22, 2005; Certification in Resp. to Def.'s Documentation Submitted to the Court on Aug. 22, 2005 ('Pl.'s Certification') Ex. 10) At the end of that first session, Andrew College requested a supervised visit with Ms. Murphy, an idea that the mediator evidently endorsed. Within an hour of that session, however, counsel for Plaintiff notified counsel for Andrew College that Abercrombie had determined that 'it would not be advisable' for even a supervised visit with Ms. Murphy.[FN3] (Def.'s Timeline, Ex. 3) A second mediation session was held on March 8, 2005, but again, Ms. Murphy did not attend.[FN4] (Hr'g Tr. 9, Aug. 22, 2005)
The mediation thereafter stalled, in large part it appears, due to Abercrombie's efforts to be appointed as Guardian for Ms. Murphy. In fact, Abercrombie submitted the Petition seeking her appointment as Guardian, pursuant to Article 81 of the New York Mental Hygiene Law, on April 5, 2005. (Def.'s Timeline, Ex. 6) While counsel for Ms. Murphy/Abercrombie notified the mediator of this filing, he did not notify the Court or counsel for Andrew College, until he sent a one-sentence letter on June 7, 2005.[FN5] (Pl.'s Certification, Ex. 15-18; Def.'s Timeline, Ex. 7) Nor did Counsel provide notice of Ms. Murphy's initial opposition to Abercrombie's efforts to become her Guardian. In Ms. Murphy's words: 'While I once had a close relationship with NANCY ABERCROMBIE, I no longer maintain such a relationship with her, and do not trust her to manage my affairs.' (Def.'s Timeline, Ex. 8 at 2) instead of Abercrombie, Ms. Murphy proposed Segundo More be her court-appointed Guardian. (Def.'s Timeline, Ex. 8 at 1-2, 6) Ultimately, it appears that there was some resolution of the dispute, whereby Ms. Murphy consented to the appointment of: (i) Segundo More to be her Guardian; (ii) Segundo More and Abercrombie to be co-Guardians of Ms. Murphy's property; and (iii) Abercrombie as Special Guardian of the case against Andrew College.[FN6] (Pl.'s Certification, Ex. 23 at 2)
D. Ms. Murphy's Declining Health and Demise
On August 1, 2005, Ms. Murphy was critically injured in an apparent fall. (Hr'g Tr. 11, Aug. 22, 2005) For this she was hospitalized at Roosevelt St. Luke's and listed in critical condition. (Hr'g Tr. 12, Aug. 22, 2005) Sometime soon thereafter, Abercrombie, though not appointed as Ms. Murphy's Guardian, sought a health care proxy to remove Ms. Murphy from life support. (Hr'g Tr. 12, Aug. 22, 2005; Def.'s Timeline, Ex. 10) An attorney for Segundo More, the court-appointed Guardian for Ms. Murphy, made an emergency, ex parte application to restrain St. Luke's Hospital from removing Ms. Murphy's life support and to declare any health care proxies to be declared null and void. (Def.'s Timeline Ex. 10) On August 15, 2005, the Honorable William J. Davis, Justice of the Supreme Court of New York, who had been presiding over the guardianship proceedings, revoked all previously-issued health care proxies. [FN7] (Def.'s Timeline, Ex. 11 at 10)
Ms. Murphy never recovered from the fall and passed away on September 25, 2005. The cause of death was determined to be '[b]lunt impact injury of the head with multiple complications including sepsis following bowel perforation by ventriculoperitoneal shunt.' (Letter from Jakoby to the Court, Ex. D, February 7, 2006) Eventually, without the opposition of Andrew College, Abercrombie was substituted for Ms. Murphy as Plaintiff in this case.[FN8] (Order, Feb. 22, 2006)
E. The Fight over Ms. Murphy's Will
The day after Ms. Murphy's death, Abercrombie, assisted by the same counsel originally representing Ms. Murphy in this action, filed a Petition in Surrogate's Court in New York seeking the issuance of Letters of Administration. (Letter from Jakoby to the Court, Ex. B, Feb. 7, 2006) In this application, Abercrombie asserted that Ms. Murphy died without a Will. (Id.) She also claimed that Ms. Murphy's estate included the Property, which she represented had a value of approximately $4,000,000, as well as Ms. Murphy's interest in this action, which she described as being brought to 'rescind a deed' based on undue influence and fraud. (Id.) However, Abercrombie did not mention in the application that the contested deed related directly to the very property that she claimed was already part of Ms. Murphy's estate. Nonetheless, Abercrombie was appointed Administratix of Ms. Murphy's estate on December 23, 2005. (Letter from Jakoby to the Court, Feb. 24, 2006)
Abercrombie's claim that Ms. Murphy died intestate may be inaccurate as Andrew College claims knowledge of a Will allegedly executed on February 11, 1998 by Ms. Murphy. This Will names former Andrew College president Kirk Treible as executor (and a neighbor as Alternate Executor). (See Letter from Jacoby to the Court, Feb. 7, 2006, Ex. C) Indeed, after discovering that Abercrombie had asserted that Ms. Murphy died intestate, Andrew College initiated proceedings for the probate of the purported Will on January 26, 2006.[FN9] (See Letter from Jacoby to the Court, Ex. D, Feb. 7, 2006) It has been estimated that these proceedings could take several years. (Hr'g Tr. 37, Feb. 16, 2006)
F. Abercrombie's Application to Dismiss the Action
When the Court first learned of Ms. Murphy's passing in October 2005, it asked the parties to submit a schedule to brief the question of whether the Court had jurisdiction over this case. Instead of a schedule, the Court received a series of letters in February and March, 2006 outlining the Parties' positions regarding jurisdiction. In these letters, Abercrombie asserts that the Court lacks jurisdiction under the probate exception, or, in the alternative, contends that the Court should abstain until the proceedings in Surrogate's Court are completed. Andrew College asserts otherwise, claiming that this action presents issues separate from those before the Surrogate's Court.[FN10]
A. Abercrombie's Jurisdictional Objections
Originally, neither Party challenged this Court's jurisdiction to hear this case. The Parties are from different states, and the amount in controversy is far over $75,000. See 28 U.S.C. §1332. However, now that Ms. Murphy has passed away and a battle has ensued in Surrogate's Court over her Will, Abercrombie asserts that this Court has lost jurisdiction because of the probate exception. In the alternative, Abercrombie urges the Court to abstain from further presiding over this case, in deference to the recently begun proceedings in Surrogate's Court. This Court rejects both arguments.
1. The Probate Exception
'The probate exception is 'one of the most mysterious and esoteric branches of the law of federal jurisdiction.'' Ashton v. Josephine Bay Paul & C. Michael Paul Found., Inc., 918 F.2d 1065, 1071 (2d Cir. 1990) (quoting Dragan v. Miller, 679 F.2d 712, 713 (7th Cir. 1982)). It is a 'judicially created doctrine stemming in large measure from misty understandings of English legal history.' Marshall v. Marshall,--U.S.--, 126 S. Ct. 1735, 1741 (2006); see also Peter Nicolas, Fighting the Probate Mafia: A Dissection of the Probate Exception to Federal Jurisdiction, 74 S. Cal. L. Rev. 1479, 1501-20 (2001). The uncertain history notwithstanding, the Supreme Court long ago defined the core of the exception to mean that 'a federal court has no jurisdiction to probate a will or administer an estate….' Markham v. Allen, 326 U.S. 490, 494 (1946). Under this exception, federal courts 'have jurisdiction to entertain suits 'in favor of creditors, legatees and [heirs]' and other claimants against a decedent's estate 'to establish their claims' so long as the federal court does not interfere with the probate proceedings or assume general jurisdiction of the probate or control of the property in the custody of the state court. ' Id. (quotingWaterman v. Canal-Louisiana Bank & Trust Co., 215 U.S. 33, 43 (1909)); see also Moser v. Pollin, 294 F.3d 335, 340 (2d Cir. 2002).
Owing perhaps to its murky past, the probate exception has been 'expansively' interpreted by the courts. Marshall, 126 S. Ct. at 1741.Markham represented the Supreme Court's first 'endeavor… to curtail the 'probate exception.' ' Id. To address yet another wave of overly-elastic application of the exception, the Supreme Court recently and unanimously reminded the lower courts in Marshall that the probate exception is 'narrow,' and should not be used as an excuse to decline to exercise jurisdiction over actions merely because they involve a 'probate related matter.' Id. at 1741, 1744.
In Marshall, the Ninth Circuit 'read the probate exception broadly to exclude from the federal courts' adjudicatory authority 'not only direct challenges to a will or trust, but also questions which would ordinarily be decided by a probate court in determining the validity of the decedent's estate planning instrument.''[FN11] Id. at 1741 (quoting Marshall v. Marshall, 392 F.3d 1118, 1133 (9th Cir. 2004)). The Ninth Circuit also held that a 'State's vesting of exclusive jurisdiction over probate matters in a special court strips federal courts of jurisdiction to entertain any 'probate related matter,' including claims respecting 'tax liability, debt, gift, [or] tort.'' Id. (quoting Marshall, 392 F.3d at 1136). In reversing, the Supreme Court held that 'the Ninth Circuit had no warrant from Congress, or from decisions of this Court, for its sweeping extension of the probate exception.' Id. In particular, the Supreme Court held that the Ninth Circuit erred in applying the probate exception to a case where a party made a claim of tortious interference with a gift or inheritance and sought an in personam judgment, and not the probate or annulment of a will.[FN12] Id. at 1748. In reaching this result, the Court reiterated that 'the probate exception reserves to state probate courts the probate or annulment of a will and the administration of a decedent's estate; it also precludes federal courts from endeavoring to dispose of property that is in the custody of a state probate court.' Id. However, the exception 'does not bar federal courts from adjudicating matters outside those confines and otherwise within federal jurisdiction.'[FN13] Id.
With this backdrop, the Court now turns to the application of the probate exception to this case. Determining whether a case falls within the probate exception requires a two-part inquiry. First, the district court sitting in diversity must determine if it is 'being asked to directly probate a will or administrate an estate.' Markham, 326 U.S. at 494; see also Moser, 294 F.3d at 340. If so, the action is outside of the court's jurisdiction, as such actions are 'purely probate' in nature. Markham, 326 U.S. at 494. Second, if the first question is answered in the negative, the court must determine if the case at hand would require the district court to 'interfere with the probate proceedings,  assume general jurisdiction of the probate[,] or control  property in the custody of the state court.' Moser, 294 F.2d at 340; see alsoMarkham, 326 U.S. at 494. In any of these situations, the district court must dismiss the case for lack of subject matter jurisdiction. SeeMoser, 294 F.3d at 340.
Abercrombie argues that this case is covered by both prongs of the probate exception analysis. First, she claims that this Court 'is now being asked by Andrew College to determine the validity of the purported Will, and to administer the estate [of] Liddie Mae Murphy, which includes the claims made in this lawsuit.' (Letter from Matthew Dollinger ('Dollinger') to the Court. Feb. 10, 2006) However, this is clearly not the case. As noted in Moser, since 'few practitioners would be so misdirected as to seek… letters testamentary or letters of administration from a federal judge, the first prong of the probate exception is rarely, if ever, violated.' Moser, 294 F.3d at 340. Andrew College has not submitted the Will to this Court in an attempt to have it declared valid; additionally, even had it done so, this Court would decline to make such a determination. Jurisdiction thus cannot be denied on this ground.
Plaintiff Abercrombie next asserts that 'by adjudicating Andrew College's motion to dismiss… the District Court would improperly take control of property now in the custody of the Surrogate's Court and would directly interfere with ongoing estate proceedings.' (Letter from Dollinger to the Court, 4-5, Feb. 10, 2006) The Court is unpersuaded.
First, this Court is not 'assum[ing] general jurisdiction of the probate' of Ms. Murphy's estate. Moser, 294 F.3d at 340. A federal court only assumes jurisdiction of the probate where ''the federal district court…entertains a cause of action that under state law…would be cognizable only by the probate court.'' Estate of Genecin v. Genecin, 363 F. Supp. 2d 306, 312 (D. Conn. 2005) (quoting Moser, 294 F.3d at 341); see also Wells Fargo Bank, N.A. v. Stern, No. Civ. 02-5126 SI, 2003 WL 22114268, at 2 (N.D. Cal. 2003) (''The standard for determining whether federal jurisdiction may be exercised is whether under state law the dispute would be cognizable only by the probate court.'' (quoting Lamberg v. Callahan, 455 F.2d 1213, 1216 (2d Cir. 1972)). Very little actually falls into this category in New York, as 'the Surrogate's Courts share concurrent subject matter jurisdiction with the state's court of general jurisdiction…' Moser, 294 F.3d at 341.Despite the wide jurisdiction of the Surrogate's Court, a New York State Supreme Court would not need to refrain from exercising jurisdiction over this case.[FN14] See Pollicina v. Misericordia Hosp. Med. Ctr., 624 N.E.2d 974, 977 (N.Y. 1993) ('Although the Surrogate's Court is the primary forum for proceedings involving estates and intestacies, the Supreme Court's inviolate authority to hear and resolve all causes in law and equity unquestionably extends to such matters as well.'); In re Burns, 731 N.Y.S.2d 537, 539 (App. Div. 2001)(holding that Supreme Court had concurrent jurisdiction over question of inter vivos charitable donations, even after donor's passing);People v. Ekinici, 743 N.Y.S.2d 651, 656 (Sup. Ct. 2002) ('[T]he Supreme Court has concurrent jurisdiction with the Surrogate's Court on all matters relating to a decedent or the estate,'); Berger v. Ickovicz, 669 N.Y.S.2d 488, 491-92 (Sup. Ct. 1998) (declining to transfer case to Surrogate's court where Surrogate's Court was not in an 'unique position' to hear the case, and the disposition of the estate was not directly affected by the case). Indeed, this action was first filed in New York Supreme Court, so it is difficult to understand how Abercrombie, purportedly acting in the interests of Ms. Murphy's estate, could believe that only the Surrogate's court should adjudicate this case.[FN15] Thus, because this dispute would not be solely cognizable by the New York Surrogate's Court, this aspect of the probate exception does not apply.
Second, this Court is not controlling property in the custody of the state court. Abercrombie argues otherwise, claiming that under Byers v. McAuley, 149 U.S. 608 (1893), the possession of a decedent's property by the administrator appointed in state court 'is a possession taken in obedience to the orders of [the state] court; [and the property] is the possession of the court, and it is a possession which cannot be disturbed by another court. ' Id. at 615. Abercrombie contends that since she has been appointed Administratrix of Ms. Murphy's estate by the New York Surrogate's Court, all of Ms. Murphy's estate (including the Property) is now in the possession of the state court.[FN16]
This reasoning is flawed on multiple grounds. To begin, Abercrombie's reliance on Byers is misplaced, because in that case the state court had already carried out a good portion of the administration of the estate, and the jurisdiction exercised by the federal circuit court interrupted that administration. See Byers, 147 U.S. at 612, 620 (noting that debts of the estate had been paid and estate was ready for distribution under administration of state court). Here, the record is devoid of any evidence that the Surrogate's court has taken any affirmative action regarding the Property, which appears to be an element of control. Cf. In re The Thomas & Agnes Carvel Found., 36 F. Supp. 2d 144, 150 (S.D.N.Y. 1999) ('The Surrogate's Court clearly has taken control of the property subject to this claim for injunctive relief by restraining its transfer or encumbrance.').
More importantly, however, the property at issue in Byers remained in the decedent's full possession until her death, and was thus considered an asset of the estate. See Byers, 149 U.S. at 608. Indeed, the question in Byers was not whether an inter vivos transfer was valid, but instead, whether a written instrument containing instructions for the sale of the property was valid as a will. Id. at 608, 618. In Byers, the property at issue automatically became part of the estate which was before the state court upon the decedent's death, whereas here, there is no basis in law to deem the Property to be part of Ms. Murphy's estate, and therefore, under the control of the Surrogate's Court, until the Deed is declared invalid.
Abercrombie disagrees, implicitly contending that solely by virtue of her statement in the Petition for Letters of Administration that Ms. Murphy died intestate and that the Property was part of her estate upon her demise, the Property is somehow under the control of the Surrogate's Court. This claim falls far short of the mark. First, the Court is troubled by the deceptive nature of Abercrombie's Petition, which omits the fact that there is a recorded Deed for the Property that transferred it to Andrew College, reserving only a life interest for Ms. Murphy. Specifically, in the Petition, Abercrombie (aided by the same counsel who initiated this lawsuit allegedly on behalf of Ms. Murphy) lists the Property as part of Ms. Murphy's real property, making no mention of the Deed. In another section intended to cover the decedent's interest in any lawsuits over property '[i]n addition to the personal property listed elsewhere in the Petition,' Abercrombie is careful to mention only that Ms. Murphy has an interest in a legal action to rescind ' deed,' without mentioning that the deed at issue involves the very same property she claims is already part of Ms. Murphy's estate. (Letter from Jakoby to the Court, Ex. B, Feb. 7, 2006 (emphasis added)) Thus, a court reviewing Abercrombie's application, without access to any other information, would believe that Ms. Murphy owned the Property upon her death, in addition to possessing an interest in an on-going lawsuit involving a deed for some other property. Of course, this Court knows there is more to the story than what Abercrombie has shared with the Surrogate's Court and, therefore, finds that the shady Petition by itself does not divest this Court of jurisdiction over the question of the validity of the Deed.
Second, Abercrombie's mere belief that the Deed is invalid, and therefore that the Property presumptively should currently be considered part of Ms. Murphy's estate, has no foundation in the law. Indeed, the whole point of the initial action begun in Ms. Murphy's name was to have the Deed declared invalid, both as a matter of law and allegedly as a result of fraud and undue influence. (Compl. ¶¶14, 16, 32) If Abercrombie's assertion were true, then there would have been no need to bring the action before this Court. But, the law in New York is clear that a properly recorded deed is presumptively valid. See Munoz v. Wilson, 18 N.E. 855, 858-59 (N.Y. 1888) (holding that a recorded deed is prima facie evidence of delivery of property); Jonap v. Norwich, 444 N.Y.S.2d 870, 872 (App. Div. 1981) ('Since the deed was recorded, there is a presumption that title passed.'). Thus, unless and until some judicial authority accepts Abercrombie's objections to the validity of the Deed, which was recorded on March 11, 1992, the Property is not part of Ms. Murphy's estate, but in fact belongs to Andrew College. Cf. Michigan Tech Fund v. Century Nat'l Bank of Broward, 680 F.2d 736, 740-41 (11th Cir. 1982) ('At this stage, the mortgage is not part of the estate's assets. Because the face of the mortgage reveals that Mr. and Mrs. Johnson held it as tenants by the entireties, upon Mr. Johnson's death Mrs. Johnson took the mortgage free and clear of any need for it to pass through the probate court. Thus, the Fund must succeed in achieving reformation before the mortgage will become part of the estate currently under control of the state probate court.'); Bugbee v. Donahue, 483 F. Supp. 1328, 1331 (E.D. Wisc. 1980) ('The real estate involved in this case, although listed as an asset in the decedent's estate, is in fact an asset only if the plaintiff is successful in his claim against the defendants. Thus, this Court in allowing the action to continue will not be assuming control of property in a state court's custody, nor will it be assuming general jurisdiction of the probate of the decedent's estate. '). Instead, the Deed presumptively mandates that the Property belongs to Andrew College.
Finally, there is the third question of whether this proceeding will 'interfere' with the probate proceedings taking place in the Surrogate's Court. '[I]t is well settled that the fact this Court is asked to adjudicate whether certain assets belong to the Estate 'standing alone, does not constitute interference' sufficient to trigger the probate exception. ' Genecin, 363 F. Supp. 2d at 312 (quoting Ashton, 918 F.2d at 1072). Indeed, as noted, the purpose of this lawsuit was to increase Ms. Murphy's assets (and now, those of her estate) by reclaiming the Property that had been deeded to Andrew College. The Complaint contains claims, among others, that Andrew College committed a tort by exercising undue influence over Ms. Murphy and by making certain fraudulent statements to induce her to give up the Property. As such, the lawsuit at least in part sounds in tort and therefore is precisely the type of action that routinely is found to be outside the bounds of the probate exception. See, e.g., Giardina v. Fontana, 733 F.2d 1047, 1050-51 (2d Cir. 1984) ('The heart of Giardina's complaint was her allegation that the assignment of her interest in her deceased father's estate was obtained by undue influence and fraud. This is essentially a common law tort action. The principal relief requested was a declaratory judgment that the assignment was null and void and/or a rescission of the assignment. This relief could be granted without in any way interfering with the probate proceedings in Florida or the estate being administered.'); Gearheard v. Gearheard, 406 F. Supp. 704, 706 (S.D. Miss. 1976) (holding that jurisdiction over lawsuit challenging inter vivas gift was proper as the lawsuit was intended to add to the assets of the estate and determination of the claims would not interfere with probate proceedings). Thus, this is a very different issue than deciding where property within an estate should be distributed. In that situation, where an action 'asks the court to order the sale of an asset of the estate,' it is proper for the federal court not to entertain jurisdiction. In re Estate of Threefoot, 316 F. Supp. 2d 636, 644 (W.D. Tenn, 2004). This case does not ask the Court to decide how to distribute any assets of Ms. Murphy's estate, but only to determine whether additional assets, i.e., the Property, should be added to the estate, thus making the probate exception inapplicable.
Even if this Court was to come to a decision while the Surrogate's Court proceedings were ongoing, the decision would not interrupt the process in state court. The federal court should not assume jurisdiction where the final determination 'would be binding on the proceeding still pending before the Surrogate's Court,' Moser, 294 F.3d at 342, but that is not the case here. As Abecrombie's counsel conceded at oral argument, the validity of the Deed will not determine the validity of the Will, and vice versa. (Hr'g Tr. 12, Feb. 16, 2006) Put another way, a decision by this Court would not leave the Surrogate's Court to perform 'no function' at all, as the Surrogate's Court would still have the question of the Will itself before it. See Moser, 294 F.3d at 342; see also Genecin, 363 F. Supp. 2d at 312 ('While the Orphans' Court, 'will be obliged to give full faith and credit' to this Court's ruling, the Orphan's Court 'will continue to administer' the Estate.' (quoting Ashton, 918 F.2d at 1072)). Therefore, the probate exception does not bar this Court from maintaining jurisdiction over this case.
As an alternative to the jurisdiction claim, Abercrombie asks this Court to abstain from further adjudication of this case for three reasons. First, she asserts that abstention is prudent because the proceedings in Surrogate's Court may affect her standing to pursue this action. (Letter from Dollinger to the Court 4, Feb. 21, 2006; Letter from Dollinger to the Court, March 6, 2006) Second, Abercrombie contends that abstention is appropriate here because it avoids overlapping litigation between the state court proceedings and this action, which she asserts involves only a request for declaratory relief. (Letter from Dollinger to the Court 2-4, Feb. 21, 2006) Third, she claims abstention is appropriate because of the strong state interests in the matters in dispute. (Letter from Dollinger to the Court 5, Feb. 21, 2006) None of these asserted claims justifies abstaining in this case.
First, with regard to standing, Abercrombie, in what may be the most revealing comment about this lawsuit, contends that the Court should abstain because of the possibility that the Surrogate's Court may determine, as a result of adjudicating the validity of the Will currently in probate, that she should not be Administratix of Ms. Murphy's estate and, therefore, she would lose 'her right to pursue' this case, either before this Court or on appeal. (Letter from Dollinger to the Court 1, March 6, 2006) However, what is at stake in this action is not Abercrombie's right to pursue anything, let alone her self-interested desire to continue this lawsuit, but the best interests of Ms. Murphy's estate. Put bluntly, if Andrew College committed a wrong here, it was Ms. Murphy, and not Nancy Abercrombie, who was directly harmed. And, therefore, it is Ms. Murphy's estate, and not Nancy Abercrombie, that has a valid interest in pursing bona fide litigation to resolve that question. Thus, because Ms. Murphy is no longer alive, it will be incumbent upon, and, indeed the obligation of, any person who is properly appointed Administratix of Ms. Murphy's estate to bring any non-frivolous legal actions to protect the legitimate interests of Ms. Murphy's estate. See In re Ehmer, 681 N.Y.S.2d 553, 554 (App. Div. 1998) ('The appellant, in her capacity as temporary administratix, possessed the authority to commence legal actions to benefit the estate, including commencing actions to recover estate assets.'); In re Estate of Edward M. Stanley, 660 N.Y.S.2d 107, 108 (App. Div. 1997) (holding that co-administrator of estate, even though also a legatee, may use estate funds to pursue bona fide litigation in the interests of the estate); Spatz v. Bajramoski, 624 N.Y.S.2d 606, 607 (App. Div. 1995) (rejecting claim that plaintiff lacked standing, nothing that temporary administrator of estate 'had full authority' as executrix of decedent's will to bring action 'seeking to recover and preserve those assets wrongfully diverted from the decedent's estate'). Thus, while it may very well be that Abercrombie ultimately will not be appointed to serve the critical role of administratix of Ms. Murphy's estate, this does not mean that Ms. Murphy's estate will lose its standing to pursue its valid interests in pressing this lawsuit. Therefore, the question of Abercrombie's 'standing' to pursue her 'right' to be a plaintiff in this case is no basis to avoid exercise of this Court's jurisdiction.[FN17]
Abercrombie's second argument in favor of abstention—the desire to avoid piecemeal litigation—is no more persuasive. Abstention is a judicially-created doctrine born out of the notion that even where 'a federal court does have jurisdiction of a particular proceeding,' it may abstain from exercising that jurisdiction out of 'proper regard for the rightful independence of state governments in carrying out their domestic policy.' Quackenbush v. Allstate Ins. Co., 517 U.S. 706, 724 (1996). This doctrine has been broken down into four categories: (1) to avoid decision of a federal constitutional question arising in a case which may be disposed of on questions of state law; (2) to leave resolution of unsettled questions of state law bearing on important policy problems to the state courts; (3) to avoid interference with a pending state criminal proceeding; and (4) to avoid duplicative litigation based on considerations of wise judicial administration. SeeColorado River Water Conservation Dist. v. United States, 424 U.S. 800, 814-17 (1976); see also Village of Westfield v. Welch's, 170 F.3d 116, 120 (2d Cir. 1999). It is the last category, known as Colorado River abstention, upon which Abercrombie principally relies.
'Abstention from the exercise of federal jurisdiction is the exception, not the rule.' Colorado River, 424 U.S. at 813. Indeed, in deciding whether to abstain, federal courts must remember their 'virtually unflagging obligation… to exercise the jurisdiction given them.' Id. at 817; see also Cohens v. Virginia, 19 U.S. 264, 404 (1821) ('It is most true that this Court will not take jurisdiction if it should not; but it is equally true, that it must take jurisdiction, if it should….'). A federal district court should abstain from deciding a case correctly before it, therefore, only when doing so would 'clearly serve an important countervailing interest. ' Colorado River, 424 U.S. at 813 (quotingCounty of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 188-89 (1959)); see also Estee Lauder Cos. v. Batra, No. 06 Civ. 2035, 2006 WL 1188183, at 7 (S.D.N.Y. May 4, 2006) ('The abstention doctrine is a narrow exception to the duty of a district court to adjudicate a controversy properly before it when parallel state proceedings are ongoing upon a finding of 'exceptional circumstances' that warrant it. ' (citing Colorado River, 424 U.S. at 813)).
'The principles of Colorado River are to be applied only in situations 'involving the contemporaneous exercise of concurrent jurisdictions.' 'Dittmer v. County of Suffolk, 146 F.3d 113, 117-18 (2d Cir. 1998) (quoting Kirkbride v. Cont'l Cas. Co., 933 F.2d 729, 734 (9th Cir. 1991)). Put differently, 'a finding that the concurrent proceedings are 'parallel' is a necessary prerequisite to abstention under Colorado River. ' Id. at 118. 'Federal and state proceedings are 'concurrent' or 'parallel' for purposes of abstention when the two proceedings are essentially the same; that is, there is an identity of parties, and the issues and relief sought are the same. ' Nat'l Union Fire Ins. Co. of Pittsburgh v. Karp, 108 F.3d 17, 22 (2d Cir. 1997); see also Great South Bay Med. Care, P.C. v. Allstate Ins. Co., 204 F. Supp. 2d 492, 496 (E.D.N.Y. 2002) ('Lawsuits are considered 'parallel' if substantially the same parties are contemporaneously litigating substantially the same issues in different forums.''). 'Complete identity of parties and Claims is not required; the parallel litigation requirement is satisfied when the main issue in the case is the subject of already pending litigation. ' GBA Contracting Corp. v. Fid. & Deposit Co. of Maryland, No. 00 Civ. 1333, 2001 WL 11060, at 1 (S.D.N.Y. 2001); see also Estee Louder, 2006 WL 1188183, at 7 n.1 ('Federal and state proceedings are concurrent or parallel for purposes of abstention when the proceedings are essentially the same; that is, there is an identity of parties, and the issues and relief sought are the same.').
Abercrombie has not persuasively demonstrated that this action and the action pending in Surrogate's Court are parallel. The subject matter is different—specifically, this Court must address the validity of the Deed, while the Surrogate's Court must address the validity of the Will proffered by Andrew College. Moreover, there is only a slight overlap in the parties as many more parties have a direct interest in the Surrogate's Court action than in this matter pending here. Furthermore, the outcome of each lawsuit will depend on mostly different facts—for example, the two contested documents in dispute were executed under different circumstances and at different times, and were witnessed by different individuals. Finally, even though both cases will be governed by state law, this does not create a parallelism between two actions connected by little more than some common parties. See Wilton v. Seven Falls Co., 515 U.S. 277, 283 (1995)(holding abstention acceptable 'where another suit involving the same parties and presenting opportunity for ventilation of the same state law issues is pending in state court….'). Thus, Abercrombie has not established the essential element that there are parallel proceedings.
However, assuming that the parallel proceeding prerequisite of the Colorado River test is met, the Court then proceeds to an evaluation of whether Colorado River abstention is warranted in this case. In evaluating whether abstention pursuant to Colorado River is appropriate, 'a district court is required to weigh six factors, 'with the balance heavily weighted in favor of the exercise of jurisdiction.''Village of Westfield, 170 F.3d at 121 (quoting Moses H. Cone Mem'l Hosp. v. Mercury Const. Corp., 460 U.S. 1, 16 (1983)). These six factors include:
(1) the assumption of jurisdiction by either court over any res or property;
(2) the inconvenience of the federal forum;
(3) the avoidance of piecemeal litigation;
(4) the order in which jurisdiction was obtained;
(5) whether state or federal law supplies the rule of decision; and
(6) whether the state court proceeding will adequately protect the rights of the party seeking to invoke federal jurisdiction.
Id. at 121 (quoting Cone, 460 U.S. at 16, 19-26). As 'no single factor is necessarily decisive' and the 'weight to be given to any one factor may vary greatly from case to case,' this Court will consider each factor individually. Id.
Taking them in turn, it is clear that the balance of the six factors weighs against Plaintiff's request that this Court abstain. First, no court has assumed jurisdiction over the property at issue in this action by virtue of Plaintiff filing the action. Instead, as discussed above, the Property presumptively belongs to Andrew College unless a court agrees with Abercrombie's claim that the Deed is invalid. Second, the federal forum is no less convenient than the state forum would be, as both courts are located in New York City. '[W]here the federal court is 'just as convenient' as the state court, that factor favors retention of the case in federal court.' Village of Westfield, 170 F.3d at 122(quoting Youell v. Exxon Corp., 48 F.3d 105, 113 (2d Cir. 1995)). Third, as noted above, the issues in the two actions are separate and distinct, thus there is no threat of piecemeal litigation. See Celentano, 602 F. Supp. at 782 (noting that there was little potential for duplicative litigation between federal case involving alleged contract to make a will and probate proceedings, where plaintiff's claims in federal court were never before the surrogate's court). Fourth, jurisdiction was obtained in this court before the Surrogate's Court proceedings were even initiated, and this case is further along than the Surrogate's Court proceedings. See Village of Westfield, 170 F.3d at 122 ('This factor does not turn exclusively on the sequence in which the cases were filed, 'but rather in terms of how much progress has been made in the two actions.'' (quoting Cone, 460 U.S. at 21)). Fifth, although state law provides the rule of decision on the merits in this case, 'the absence of a federal issue does not strongly advise dismissal, unless the state law issues are novel or particularly complex.' Id. at 124. Thus, because the state law issues are straightforward, this factor only marginally favors abstention. Sixth and finally, while the Surrogate's Court may be able to resolve the issues pending before this Court, a prompt decision is more likely from this Court. Id. (considering the 'slow pace' of the state court proceeding to favor keeping the case before the federal court). Therefore, this Court will not abstain under Colorado River.[FN18]
Finally, the Court rejects Abercrombie's last argument that the state's 'strong interest' in probate related matters mandates abstention. In support of this basis for abstention, Abercrombie primarily relies on the Second Circuit's 1973 decision in Phillips, Nizer, Benjamin, Krim & Ballon v. Rosenstiel, 490 F.2d 509 (2d Cir. 1973). In dicta, the Phillips, Nizer court observed that 'there is a particularly strong reason for abstention in cases which, though not within the exceptions for matters of probate and administration or matrimony and custody actions are on the verge, since like those within the exception, they raise issues 'in which the states have an especially strong interest and a well-developed competence for dealing with them.'' Id. at 516 (quoting Charles Alan Wright, Federal Courts §25, at 84 (2d ed. 1970)). Whatever may be said of the limits of that comment, the Second Circuit has explicitly declined to extend Phillip, Nizer in light of the Supreme Court's admonition in Colorado River regarding the federal courts' 'unflagging obligation' to exercise their jurisdiction. SeeGiardina, 733 F.2d at 1052. Moreover, Phillips, Nizer is distinguishable in that it involved 'a thicket of state decisional law,' Philips, Nizer, 490 F.2d at 516, while this case involves relatively plain vanilla claims of undue influence and fraud, as well as hornbook law on inter vivos gifts. See Giardina, 733 F.2d at 1051 ('The claim of undue influence and fraud in obtaining the assignment in the case before us is a simple and largely factual question involving well-settled principles of state law. It is a garden variety type in federal diversity jurisdiction, and it neither involves a 'controlling or obscure question of state law' nor requires special state expertise.'); Celentano, 602 F. Supp. at 781-82 ([P]laintiff's contract claims and defendant's defenses comprise 'a garden variety' diversity case, involving neither the construction of a new or nonexisting statute, nor presenting '[c]omplex and unsettled issues of state law, whose resolution might well affect broad policies of the state.' ' (citing Quinn v. Aetna Life & Cas. Co., 616 F.2d 38, 41 (2d Cir. 1980))); Bugbee, 483 F. Supp. at 1332(distinguishing Phillips, Nizer, noting that the action 'is merely one to set aside an allegedly fraudulently induced conveyance of real estate; it involves no policy as to which the state has an especially strong concern, and no peculiar issues as to which the state probate court would have a special competence'). Therefore, the Court will not abstain in this action.
B. Andrew College's Motion to Dismiss
The Court now turns to Andrew College's Motion to Dismiss. In this Motion, Andrew College seeks dismissal on the grounds that: (i) all of the claims in the Complaint are time barred by the Statute of Limitations; (ii) the Complaint fails to state a cause of action as to the legality of the Deed; and (iii) the fraud allegations in the Complaint want for sufficient particularity under Fed. R. Civ. P. 9(b).
1. Standard of Review
On a motion to dismiss, the district court must determine whether the complaint is legally sufficient—it is not concerned with weighing the evidence which would be presented at trial. See Chosun Int'l Inc. v. Chrisha Creations, Ltd., 413 F.3d 324, 327 (2d Cir. 2005). Accordingly, a complaint should be dismissed only when it is clear that the plaintiff can present no set of facts which would entitle that plaintiff to relief consistent with the allegations. See Swierkiewicz v. Sorema N.A., 534 U.S. 506, 508 n.1 (2002). This standard is even stricter where the motion to dismiss is based on statute of limitations defenses. See Meridien Int'l Bank Ltd. v. Liberia, 23 F. Supp. 2d 439, 445 (S.D.N.Y. 1998). In such an instance, the motion should not be granted unless it appears 'beyond a doubt' that the plaintiff can prove no set of facts in support of the claim which would entitle the plaintiff to relief. Id.; see also Weizmann Inst. of Sci. v. Neschis, 229 F. Supp. 2d 234, 252 (S.D.N.Y. 2002). Review of such a motion requires the court to accept the plaintiff's allegations in the complaint as true, and draw all inferences in favor of the plaintiff. See Blimpie Int'l, Inc. v. Blimpie of the Keys, 371 F. Supp. 2d 469, 470-71 (S.D.N.Y. 2005).
In adjudicating a Rule 12(b)(6) motion, this Court is limited to considering 'facts stated on the face of the complaint, in documents appended to the complaint or incorporated in the complaint by reference, and to matters of which judicial notice may be taken.' Leonard F. v. Israel Discount Bank of New York, 199 F.3d 99, 107 (2d Cir. 1999) (vacating 12(b)(6) judgment after district court made findings of fact based on evidence outside the pleadings without converting motion to one for summary judgment); Tornheim v. Eason, 363 F. Supp. 2d 674, 676 (S.D.N.Y. 2005) (allowing court to consider public records, even if document was not incorporated into the complaint by reference); Cortec Indus., Inc. v. Sum Holding, L.P., 949 F.2d 42, 47 (2d Cir. 1991) (allowing defendant to produce a prospectus with its motion to dismiss which plaintiff failed to attach to the complaint).
a. Applicable Statute of Limitations
2. Statute of Limitations
In a diversity case filed in New York, the district court must apply New York's choice of law rules and statutes of limitations. See Stuart v. Am. Cyanamid Co., 158 F.3d 622, 626 (2d Cir. 1998). Under New York law, this Court must determine the substantive form of the remedy rather than the theory of liability put forth by the Plaintiff to determine which statute of limitation applies. See Leongard v. Santa Fe Indus., Inc., 514 N.E.2d 113, 115 (N.Y. 1987). Plaintiff's Complaint alleges seven causes of action,[FN19] but in truth, the remedies sought may be divided into three categories.
First, Plaintiff seeks equitable remedies, Causes of action, including equitable remedies, 'for which no limitation is specifically prescribed by law ' are governed by the six-year statute of limitations under New York law. See N.Y. C.P.L.R. §213(1). Claims based in restitution, such as the claim for unjust enrichment, are also subject to this six-year statute of limitation. See Plitman v. Leibowitz, 990 F. Supp. 336, 337 (S.D.N.Y. 1998). As actions for a constructive trust are also based in restitution, they are also subject to the six-year statute of limitations. See Congregation Yetev Lev D'Satmar, Inc. v. 26 Adar N.B. Corp., 596 N.Y.S.2d 435, 437 (App. Div. 1993).
Second, Murphy makes a number of property-based claims. (See Compl. ¶ ¶14, 16, 21, 28) The statute of limitations for an action to recover real property or the possession thereof is ten years. See N.Y. C.P.L.R. §212(a); P.A.C.W.S., Ltd., v. Reineke, 572 N.Y.S.2d 42, 44 (App. Div. 1991) ('[T]he plaintiffs' complaint sufficiently set forth a cause of action seeking a judgment determining ownership of the property deeded to [defendant]…. The Statute of Limitations governing such a cause of action is 10 years.').
Third, Plaintiff's remaining claims primarily allege fraudulent conduct. Under New York law, an allegation of fraud may fall under one of two different statutes of limitations. A claim of actual fraud is subject to a two-year statute of limitation running from the time the plaintiff discovered, or could have with reasonable diligence discovered, the fraud. See N.Y.C.P.L.R. §213(8). However, if the Plaintiff fails to allege that the Defendant intentionally deceived Ms. Murphy or acted with a conscious disregard of her rights, Plaintiff's allegations merely establish a prima facie case of constructive fraud, not actual fraud. See Fandy Corp. v. Chen, 691 N.Y.S.2d 572, 573 (App. Div. 1999); Brown v. Tonawanda Housing, Inc., 507 N.Y.S.2d 92, 93 (App. Div. 1986). A cause of action for constructive fraud runs from the alleged fraudulent action, not from the time of discovery, and is subject to a six-year statute of limitations. See Brown, 507 N.Y.S.2d at 93.
All of Plaintiff's causes of action are based on events which occurred in March 1990 at the signing of the Deed, or, at the latest, at the recording of the Deed in 1992. Applying either the six or ten year statutes of limitations, all of these claims are time barred. The only claims that might not be time barred are those for fraud, but as discussed infra, Plaintiff fails to allege fraud with sufficient particularity. Therefore, it is impossible to determine whether these claims are time barred.
b. Exceptions to the Statute of Limitations
Plaintiff argues that two exceptions to the statute of limitations bar the defense in this case. First, Plaintiff asserts that the statute of limitations is inapplicable to an action by an owner in possession to remove a cloud on the title. (Pl.'s Mem. of Law in Opp'n to the Mot. To Dismiss the Compl. ('Pl.'s Opp'n Mem.') 7) Second, Plaintiff asserts equitable estoppel as a defense to the statute of limitations.
i. Owner in Possession Exception
Plaintiff claims relief from the statute of limitations from the 'owner in possession' exception. The 'owner in possession' exception allows the qualifying owner to 'invoke the aid of a court of equity at any time while he is so the owner and in possession.' Piedras v. Vanover, 579 N.Y.S.2d 675, 678 (App. Div. 1992) (quoting Ford v. Clendenin, 109 N.E. 124, 126 (N.Y. 1915)). The exception thus allows the owner to sue throughout his possession, without restriction by the statute of limitations. Id. This exception does not apply, however, to all plaintiffs who bring lawsuits over disputed property. Instead, the New York Court of Appeals has emphasized that '[t]he requirement of prompt action is imposed as a policy matter upon persons who would challenge title to property rather than those who seek to quiet title to their land.' Orange & Rockland Util, Inc. v. Philwold Estates, 418 N.E.2d 1310, 1313 (N.Y. 1981). More particularly, to be covered by this exception to the statute of limitations, the plaintiff must be 'the owner and in possession.' Ford, 109 N.E. at 126. Under the typical case involving this exception, the 'owner of real property who is in real possession…may wait until his possession is invaded or his title is attacked before taking steps to vindicate his right.' Id.
Plainly, this action does not seek to quiet Ms. Murphy's title to the Property, but in fact seeks to vacate and rescind Andrew College's title to the Property by virtue of the Deed that conveyed the Property from Ms. Murphy to Andrew College. Put another way, the premise of this lawsuit is that title to the Property should be returned to Ms. Murphy (or her estate) because she allegedly was induced to gift it to Andrew College through fraud and undue influence. Thus, even though Ms. Murphy was living on the Property at the time this action was filed, and thus satisfied the possession element of the exception, and even though it is claimed that she (or her estate) should be deemed to be the rightful owner of the property, Ms. Murphy presumptively ceased to be the title holder when the Deed was delivered twelve years before this lawsuit was filed.[FN20] See Sofsky v. Rosenberg, 564 N.E.2d 662, 663 (N.Y. 1990) ('Rosenberg's possession of the deed creates a presumption that the deceased grantor had delivered the deed to him before her death.'); Marlanx Corp. v. Lage, 764 N.Y.S.2d 6, 8 (App. Div. 2003) ('As to the rights between grantor and grantee, transfer of title is effected by delivery and acceptance of an executed deed.'). As such, the ownership element of the exception is not satisfied. See Ford, 109 N.E. at 126 ('[A]n owner in possession has a right to invoke the aid of a court of equity at any time while he is so the owner and in possession…') (emphasis added); James v. Lewis, 522 N.Y.S.2d 897, 898 (App. Div. 1987) ('[B]ecause the plaintiff failed to establish that he was an owner in possession, the trial court properly concluded that challenges to the 1971 and 1974 conveyances were barred by the Statute of Limitations.'). Thus, even if there is a valid basis for rescission of the Deed on the grounds, for example, of undue influence, and Ms. Murphy's estate should as a result be deemed to be the rightful owner of the Property, the untimely filing of the action is not excused.[FN21] See Brown, 507 N.Y.S.2d at 494 (holding that rescission action based on claim that plaintiff 'did not convey title to her property to defendants and that defendants used undue influence and fraudulently induced her to sign deed' was subject to six-year statute of limitation).
ii. Equitable Estoppel
Plaintiff also contends that equitable estoppel should prevent her case from being dismissed for being untimely. In particular, it is claimed for the first time in Plaintiff's Response that Ms. Murphy did not become aware until 2004 that the Deed had been recorded and was irrevocable.
Under New York law, '[e]quitable estoppel may arise when the defendant misrepresents to the plaintiff the time with in which he may begin suit. Equitable estoppel may also arise when affirmative fraudulent statements are made which conceal from the plaintiff facts essential to make out the cause of action.'[FN22] Renz v. Beeman, 589 F.2d 735, 750 (2d Cir. 1979) (citations omitted); accord Knaysi v. A.H. Robbins Co., 679 F.2d 1366, 1368 (11th Cir. 1982); Anisfeld v. Cantor Fitzgerald & Co., 631 F. Supp. 1461, 1466 (S.D.N.Y. 1986)(citing Parsons v. Dep't of Transp., 344 N.Y.S.2d 19, 24 (Sup. Ct. 1973)); Simcuski v. Saeli, 377 N.E.2d 713, 716 (N.Y. 1978); Gen'l Stencils, Inc. v. Chiappa, 219 N.E.2d 169, 170-71 (N.Y. 1966). Under New York law, equitable estoppel refers to a court's power to bar the application of the statute of limitations due to representations or conduct by a party which induces the opposing party to postpone bringing suit on a known cause of action, or which fraudulently conceals an action unknown to the opposing party. Knaysi, 679 F.2d at 1368. It is, however, a doctrine to be 'invoked sparingly and only under exceptional circumstances.' Matter of Gross v. New York City Health & Hosps. Corp., 505 N.Y.S.2d 678, 679 (App. Div. 1986).
'The elements of estoppel are with respect to the party estopped: (1) conduct which amounts to a false representation or concealment of material facts; (2) intention that such conduct will be acted upon by the other party; and (3) knowledge of the real facts. The party asserting estoppel must show with respect to himself: (1) lack of knowledge of the true facts; (2) reliance upon the conduct of the party estopped; and (3) a prejudicial change in his position…'[FN23]
Smith v. Smith, 830 F.2d 11, 12 (2d Cir. 1987) (quoting Airco Alloys Div., Airco Inc. v. Niagara Mohawk Power Corp., 430 N.Y.S.2d 179, 187 (App. Div. 1980)); see also Bennett v. U.S. Lines, Inc., 64 F.3d 62, 65 (2d Cir. 1995); Knaysi, 679 F.2d at 1369.
If properly pled, allegations of equitable estoppel normally create questions of fact which cannot be determined at a motion to dismiss. See Bennett, 64 F.3d at 65; Renz, 589 F.2d at 750 n. 15. However, without adequate pleading, the issue is not properly raised and therefore cannot defeat, a motion to dismiss based on statute of limitations grounds. See Dep't of Econ. Dev. v. Arthur Anderson & Co., 747 F. Supp. 922, 943 (S.D.N.Y. 1990) (dismissing cause of action because plaintiff made no allegation in complaint that 'its failure to timely institute its third-party action was due to its justified reliance upon a misrepresentation' by opposing party); Moll v. U.S. Life Title Ins. Co. of N.Y., 700 F. Supp. 1284, 1293 (S.D.N.Y. 1988) ('Plaintiffs have not alleged that defendant caused them to delay in bringing suit on a known cause of action. On the contrary, plaintiffs repeatedly emphasize that they did not discover the alleged…violations until long after the limitations period had expired. Equitable estoppel is therefore not appropriate in this case.').
Moreover, 'equitable estoppel does not apply where the misrepresentation or act of concealment underlying the estoppel claim is the same act which forms the basis of plaintiff's underlying cause of action. ' Kaufman v. Cohen, 760 N.Y.S.2d 157, 167 (App. Div. 2003). Instead, the 'opportunity to circumvent the Statute of Limitations [on the grounds of equitable estoppel] is predicated… upon the plaintiff demonstrating that the defendant conducted himself in such an overt manner, after his wrongdoing, as to induce the plaintiff to delay commencement of her action on time or otherwise prevent her from doing so. ' Burpee v. Burpee, 578 N.Y.S.2d 359, 362 (Sup. Ct. 1991); see also Smith, 830 F.2d at 13 ('The doctrine of equitable estoppel usually comes into play when some conduct by a defendant after his initial wrongdoing has prevented the plaintiff from discovering or suing upon the initial wrong. '). '[T]his limitation on the equitable estoppel doctrine must also apply to fraud actions, because otherwise, the mere assertion of an underlying fraudulent act would always trigger equitable estoppel and render the discovery accrual rule for fraud actions superfluous.' Kaufman, 760 N.Y.S.2d at 167. In addition to this requirement, any claim that a defendant's fraudulent concealment bars invocation of a statute of limitations defense must comport with Fed. R. Civ. P 9(b) in that it must be sufficiently particularized. See Moll, 700 F. Supp. at 1289. Finally, Plaintiff must allege more than that the defendant remained silent regarding the initial wrong. See Jordan v. Ford Motor Co., 426 N.Y.S.2d 359, 361 (App. Div. 1980)('A party against whom a claim exists is not, without more, under a duty to inform the injured party thereof, and such failure to inform does not constitute the kind of fraudulent concealment which gives rise to an estoppel.').
Furthermore, even if a plaintiff sufficiently alleges misconduct by a defendant, the plaintiff also is required to allege that justifiable reliance upon the misrepresentation was the reason for failing to timely commence the action, See id. Specifically, '[a] party seeking to avoid the bar of the statute [of limitations] on account of fraud must aver and show that he used due diligence to detect it….' Moll, 700 F. Supp. at 1293. 'All that is needed to commence the running of the statute is 'knowledge of facts sufficient 'to suggest to a person of ordinary intelligence the probability that he has been defrauded.'' Renz, 589 F.2d at 751 (quoting Sielcken-Schwarz v. American Factors, 192 N.E. 307, 310 (N.Y. 1934)). Thus, where a plaintiff possesses 'timely knowledge sufficient to place him or her under a duty to make inquiry and ascertain all the relevant facts prior to the expiration of the applicable Statute of Limitations,' there can be no justifiable reliance, and equitable estoppel is inapplicable. Gleason, 599 N.Y.S.2d at 299 (quotations omitted).
Plaintiff has the burden to establish that the action was brought within a reasonable time after the facts giving rise to the estoppel itself. See Weizmann Inst. of Sci., 229 F. Supp. 2d at 252. As a factual finding is required, it is typically inappropriate to determine whether or not plaintiff has met this burden on a motion to dismiss. See Knaysi, 679 F.2d at 1370. This is not the case, however, if the plaintiff fails to adequately plead the requisite facts in support of the defense. See Moll, 700 F. Supp. at 1293. Thus, where a plaintiff does not sufficiently allege due diligence in the complaint, mere allegations of the same are insufficient to toll the statute of limitations. See id; see also Whitney Hldgs, Ltd. v. Givotovsky, 988 F. Supp. 732, 747 (S.D.N.Y. 1997).
In this case, Plaintiff has failed to allege any facts that would support invocation of the equitable estoppel doctrine. First, Plaintiff does not identify the misrepresentations or other facts demonstrating fraudulent concealment that could serve as the basis for the claimed equitable estoppel. More particularly, Plaintiff has utterly failed to identify in the Complaint which statements led her to believe that she could delay bringing her lawsuit fourteen years after signing the Contribution Agreement, let alone twelve years after the Deed was recorded. The same is true of any other representations allegedly made by Andrew College that supposedly concealed facts that could have led Ms. Murphy to file this action earlier. Instead, the whole claim of equitable estoppel appears to hinge on the non-particularized allegation that in 1990 Andrew College told Ms. Murphy that the Deed was revocable, a representation which Abercrombie claims was not corrected until 2004, after the statute of limitations already had run. However, because that claim forms the basis of the fraud cause of action, it cannot serve as the grounds for finding equitable estoppel. See Smith, 830 F.2d at 13 ('Because appellant has failed to disclose any additional acts by appellee that were designed to place appellant's claim outside the limitation period, she has not made out a case of equitable estoppel under New York law.'); see also Kaufman, 760 N.Y.S.2d at 167 ('In the present case, it is the very same wrongful act—[Defendant's] misrepresentation and intentional concealment concerning the opportunity to reacquire an interest in the Falchi Building—which forms the basis of both the equitable argument and the underlying claims for fraud and breach of fiduciary duty…. Accordingly,…plaintiffs may not avail themselves of the [equitable estoppel] doctrine here.'). Moreover, because even the allegation that Andrew College allegedly did not correct its earlier representations regarding the purported revocability of the Deed until 2004 is made only in Plaintiff's Memorandum of Law, and not in the Complaint or in an affidavit from Ms. Murphy, the Court has little trouble finding that Abercrombie has failed to allege sufficient facts to support the claim that Andrew College tricked Ms. Murphy into delaying this action. See Smith, 830 F.2d at 13 ('Because appellant has failed to disclose any additional acts by appellee that were designed to place appellant's claim outside the limitation period, she has not made out a case of equitable estoppel under New York law.'); Anderson Co. v. Devine, 608 N.Y.S.2d 514, 515 (App. Div. 1994) ('[E]quitable estoppel is unavailable to the plaintiffs because of their failure to assert it in their complaint.').
Finally, Plaintiff has not adequately plead due diligence. At any point, Plaintiff could have inquired about Andrew College's plans for the Property. After the Deed was recorded, it became a public record which Plaintiff easily could have discovered. See Jacobsen v. Inc. Village of Russell Gardens, 201 N.Y.S.2d 183, 186 (Sup. Ct. 1960) ('The Court has ascertained that this deed is a public record….'); see alsoSchwartz v. Ribaudo, 101 N.Y.S. 599, 599-600 (Sup. Ct. 1906) ('The averment of the record of the deed placed the defendant in a position to at once obtain knowledge and information, and a party cannot plead ignorance of a public record to which he has access.'). Without any allegations of diligent action on Plaintiff's behalf, Plaintiff cannot rely on equitable estoppel, See Whitney Holdings., 988 F. Supp. at 747-48 ('To invoke equitable estoppel, plaintiff must demonstrate due diligence in bringing the cause of action and reasonable care in ascertaining facts which might have led to discovery of defendant's wrong.,.. [Plaintiff] has neither affirmatively pleade