Matter of Reich

[*1] Matter of Reich 2021 NY Slip Op 50613(U) Decided on June 16, 2021 Surrogate's Court, Erie County Mosey, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on June 16, 2021
Surrogate's Court, Erie County

In the Matter of the Estate of William Z. Reich, Deceased.



2018-3878/D/E



LIPPES MATHIAS WEXLER FRIEDMAN LLP

Attorneys for Eric Reich and Justin Reich

Thomas J. Gaffney, Esq. of Counsel

KATZ & BAEHRE

Jeffrey H. Katz, Esq. of Counsel

and

RICHARD T. SULLIVAN, ESQ.

Attorneys for Catharine M. Venzon, Estate Fiduciary
Acea M. Mosey, J.

Decedent, an attorney,[FN1] died at age 70 on August 25, 2018, survived by his wife, Catharine, and his two sons (by a prior marriage), Eric and Justin. Catharine was appointed executor of the estate on October 25, 2018.

On August 6, 2019, Eric and Justin each filed a verified claim against the estate. Eric and Justin were each 25% owners of a limited liability company, Abanim, LLC,[FN2] with decedent having been the remaining 50% owner thereof. Each claim asserted that, "around 2011", decedent took funds out of Abanim which "rightfully belonged" to each claimant. Exhibit A to each claim in an excerpt from a February 2014 deposition unrelated to the within claims, in which decedent testified as follows:

"Q. Did you take a loan from ABANIM?A. I did.Q. In what amount of money?A. I believe I owe each of them about sixty-seven thousand dollars."

The estate filed a verified answer to each verified claim, asserting the statute of limitation as an affirmative defense. At the same time, the estate filed a petition to determine the validity of each claim, with dismissal of each claim being the ultimate relief sought.

In moving for accelerated judgment on its statute of limitations defense, the estate contends that the gravamen of the claims is the conversion — the 'wrongful removal of funds' " — by decedent of Abanim assets in 2011. Arguing that a claim for conversion is governed by the three year statute of limitations, measured from the date when the conversion occurs, each claim was time-barred, so the estate says, "by 2014".

Claimants, on the other hand, make the following argument:

"In reality, the Claimants have causes of action for unjust enrichment and for money had, money received as well, each of which has a six year statute of limitations.These are not addressed at all by the Estate in the Motions.We assume, however, that were the Estate to actually address them, it would take the position that the statute of limitations ran in 2017, and here for Claimants' claims should still be dismissed because they were not filed until 2018.Significantly though, Claimants submitted with their claims relevant portions of a transcript of sworn deposition testimony of the Deceased from 2014 wherein he affirms the existence of his obligation to pay back the funds. A copy of that portion of the transcript is attached hereto as Exhibit A.Moreover, attached hereto as Exhibit B is an email chain between the Deceased and Claimant Justin Reich wherein the entity's accountant states on January 13, 2014 that $75,800 each is owed to Justin and Eric Reich. Ex. B, p. 3.Deceased responds on January 15, 2014 as follows: 'There are still adjustments that need to be made for expenses I advanced for yearly tax filings. On the whole the numbers are correct and I will sign a note.' Ex. B, p. 2. (emphasis added)There can be no question that the debt was reconfirmed thereby and that the statute of limitations therefore started anew in January of 2014.Thus, the Claimants' claims remain viable and were timely filed.At a minimum, the sworn testimony and the written correspondence from the Deceased create questions of fact that preclude summary judgment on this record" (emphasis added).

In Matter of Trombley, 137 AD3d 1641, 1642-1643 [2016], our Appellate Division pointed out that a claim for unjust enrichment is governed by a six (6) year statute of limitations and "accrue[s] upon 'the occurrence of the wrongful act giving rise to the duty of restitution' (Boardman v. Kennedy, 105 AD3d 1375, 1376 [2013]". So viewed, the statute would have run in 2017, the precise date in 2017 being uncertain on the record before me.

However, it is clear that, in February 2014, decedent, an experienced attorney, acknowledged his obligation to pay back the money he had taken from Abanim (see supra, p. 2). That sworn acknowledgment by decedent is sufficient to "restart the running of the statute of limitations" (Sullivan v. Troser Mgmt., 15 AD3d 1011, 1012 [2005]) as of the February, 2014, date when the deposition took place. Given the six year period of limitations, the filing of their [*2]claims by Eric and Justin in 2019 was timely.

Accordingly, I hereby deny the estate's application to dismiss the claim of Eric and of Justin on statute of limitations grounds, and I also dismiss that defense.

Finally, I set this matter down for a virtual status appearance before me on Thursday, July 22, 2021, at 9:30 a.m. to schedule whatever next needs to be done to bring this matter to conclusion.

This decision shall constitute the Order of this Court and no other or further order shall be required.

DATED: June 16, 2021

BUFFALO, NEW YORK

_____________________________

HON. ACEA M. MOSEY

Surrogate Judge Footnotes

Footnote 1:Decedent was a name partner in the firm of Serotte Reich LLP in Buffalo, New York.

Footnote 2:"Abanim" is Hebrew for "Father and Sons". Decedent testified at an unrelated deposition in 2014 that Abanim "was intended to teach [Eric and Justin] real estate investment and we just would have some fun investing together".