Sillam v. Labaton Sucharow LLP
- Colleen McMahon
- 1:21-cv-06675
- U.S. District Court · Southern District of New York
- 2
In Sillam v. Labaton Sucharow, Judge McMahon questioned whether plaintiffs’ claims were filed too late and invited responses before ruling.
Gerard Sillam and Aldric Saulnier, and the named defendants Labaton Sucharow LLP, Christopher J. Keller, and Lawrence A. Sucharow.
What happened
Sillam v. Labaton Sucharow LLP concerns claims by Gerard Sillam and Aldric Saulnier against the law firm and two individuals. The complaint identifies a July 8, 2015 declaration as the last allegedly fraudulent or negligent statement on which plaintiffs relied, and says they discovered the alleged fraud in November 2017.
The court noted that the lawsuit began on August 6, 2021. It said the claims appeared to be barred by New York’s six-year filing deadline, and that plaintiffs could not use the alternative two-year period after discovery because they alleged discovering the fraud more than two years before filing.
Judge McMahon did not dismiss the case in this notice. She gave the parties five business days to explain what, if anything, was wrong with her analysis before the court acted.
The detailed version
- Sillam v. Labaton Sucharow LLP · No. 1:21-cv-06675
- Colleen McMahon
- Mar. 16, 2022
Nature of the document
This is a notice to the parties, not an order granting or denying the motion to dismiss. While reviewing the motion papers, the court observed that the defendants had not argued that the claims were barred by the statute of limitations, the deadline for bringing a claim.
Limitations issue
The court stated that, under New York law, a fraud claim generally must be filed within six years after the fraud or within two years after the fraud was discovered, or reasonably could have been discovered, whichever period ends later. It also stated that the six-year rule applies to a negligent-misrepresentation claim when the facts also support fraud and the fraud allegation is not merely incidental. The court further stated that the same six-year rule applies to the aiding-and-abetting claim.
The complaint identifies the Keller Declaration dated July 8, 2015, as the last allegedly fraudulent or negligent statement pleaded. It also alleges that plaintiffs signed the Universal Settlement Agreement on August 15, 2015, in reliance on that declaration, and that they would not have signed the agreement or the 2016 Amendment had they known that Labaton represented certain referred clients after the settlement agreements were executed.
The court stated that the action was filed on August 6, 2021—six years and one month after the declaration was sent to plaintiffs. It therefore said that the claims in Counts 1 and 2 appeared to be time-barred under the applicable six-year period. The court also concluded that, based on the complaint’s allegation that plaintiffs discovered the fraud in November 2017, plaintiffs could not rely on the two-year discovery period because they filed suit more than two years after that discovery.
What the court did
The court did not dismiss the action or otherwise resolve the motion to dismiss in this notice. Judge Colleen McMahon gave the parties five business days to respond to the court’s statute-of-limitations analysis and explain what was wrong with it, if anything. The opinion text does not include a later ruling on the motion.
Read the full 2-page opinion on CourtListener, the free public archive maintained by the Free Law Project.