Gary Lefkowitz v. Leslie Westreich et al
MEMORANDUM OPINION AND ORDER re: 68 MOTION to Dismiss . filed by Leslie Westreich. The Court has considered all of the arguments of the parties. To the extent not specifically addressed above, the remaining arguments are either moot or without merit. For the reasons explained above, the defendants' motion to dismiss is granted. The Clerk is directed to enter judgment dismissing the Amended Complaint. The Clerk is also directed to close all pending motions and to close this case. SO ORDERED. (Signed by Judge John G. Koeltl on 8/11/17) (yv)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
- against -
MEMORANDUM OPINION AND
LESLIE WESTREICH, ET AL.,
JOHN G. KOELTL, District Judge:
The plaintiff, Gary Lefkowitz, appearing pro se, filed this
action against the defendants Leslie Westreich (“Westreich”),
Shira Seidel Westreich (“Shira”), Adam Westreich (“Adam”),
Baruch Singer (“Singer”), Tryad, Inc. (“Tryad”), The Coby Group,
LLC (“Coby”), and Affordable Housing LLC (“Affordable Housing”)
for breach of contract, breach of fiduciary duty, fraud, and for
violating the Racketeer Influenced and Corrupt Organizations Act
(“RICO”), 18 U.S.C. §§ 1961 et seq. The defendants now move to
dismiss the claims in the amended complaint pursuant to Rule
12(b)(6) of the Federal Rules of Civil Procedure. 1
The Amended Complaint names as defendants “Triad, Inc. a New
York Corporation” and “the Triad Group, LLC.” According to the
defendants, the former does not exist, and the latter appears to refer
to Tryad Group, LLC, a company controlled by Westreich. The plaintiff
also names as a defendant Delancy Industrial Re-Hab Corp., which,
according to the defendants, does not exist. The motion to dismiss is
brought on behalf of Westreich, Shira, Adam, Singer, Tryad, Coby, and
In deciding a motion to dismiss pursuant to Rule 12(b)(6),
the allegations in the complaint are accepted as true, and all
reasonable inferences must be drawn in the plaintiff’s favor.
McCarthy v. Dun & Bradstreet Corp., 482 F.3d 184, 191 (2d Cir.
2007). The Court’s function on a motion to dismiss is “not to
weigh the evidence that might be presented at a trial but merely
to determine whether the complaint itself is legally
sufficient.” Goldman v. Belden, 754 F.2d 1059, 1067 (2d Cir.
1985). The Court should not dismiss the complaint if the
plaintiff has stated “enough facts to state a claim to relief
that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550
U.S. 544, 570 (2007). “A claim has facial plausibility when the
plaintiff pleads factual content that allows the court to draw
the reasonable inference that the defendant is liable for the
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). While the Court should construe the factual allegations
in the light most favorable to the plaintiff, “the tenet that a
court must accept as true all of the allegations contained in
the complaint is inapplicable to legal conclusions.” Id.; see
also Springer v. U.S. Bank Nat’l Ass’n, No. 15-CV-1107 (JGK),
2015 WL 9462083, at *1 (S.D.N.Y. Dec. 23, 2015).
When presented with a motion to dismiss pursuant to Rule
12(b)(6), the Court may consider documents that are referenced
in the complaint, documents that the plaintiff relied on in
bringing suit and that are either in the plaintiff’s possession
or that the plaintiff knew of when bringing suit, or matters of
which judicial notice may be taken. See Chambers v. Time Warner,
Inc., 282 F.3d 147, 153 (2d Cir. 2002); see also Energy
Intelligence Grp., Inc. v. Canaccord Genuity, Inc., No. 16-CV8298 (JGK), 2017 WL 1967366, at *1 (S.D.N.Y. May. 11, 2017).
The following facts alleged in the complaint are accepted
as true for the purposes of this motion to dismiss.
In 1984, the plaintiff formed Citi Equity Group (“CEG”) to
act as a corporate general partner in certain limited
partnerships formed by the plaintiff in relation to real estate
(Am. Compl. ¶¶ 44-45.)
The plaintiff alleges that
from 1984 through 1994, Westreich represented the plaintiff in
legal matters related to real estate investments.
The plaintiff left CEG in 1995, and was subsequently
sentenced to 293 months in prison upon being convicted for using
CEG as a vehicle to commit fraud; specifically, the plaintiff
was convicted on 43 different counts for mail and wire fraud,
managing a continuing financial crimes enterprise, defrauding an
agency of the United States, aiding in the preparation of false
tax returns, making a false statement in connection with a
bankruptcy case, and obstruction of justice.
See U.S. v.
Lefkowitz (“Lefkowitz I”), 125 F.3d 608, 612, 619, 621 (8th Cir.
1997) (affirming conviction on 43 of 45 counts, including for
making a false statement in connection with a bankruptcy case
because a “jury could reasonably find that Lefkowitz lied to the
bankruptcy court to cover up his effort to profit from the prior
embezzlement of CEG property”) reh’g and suggestion for reh’g en
banc denied, (8th Cir.
Apr. 16, 1998), reh’g and suggestion for
reh’g en banc denied, (8th Cir. May 6, 1998), cert. denied, 118
S. Ct. 1527 (1998); U.S. v. Lefkowitz (“Lefkowitz II”), Nos. 974248, 97-4249, 1999 WL 597232, at *1 (8th Cir. Aug. 9, 1999),
cert. denied, 120 S. Ct. 1246 (2000), reh’g denied 529 U.S. 1125
(2000); Lefkowitz v. U.S., 446 F.3d 788 (8th Cir. 2006)
(affirming denial of post-conviction relief), reh’g and reh’g en
banc denied, (8th Cir. 2006), cert. denied, 127 S. Ct. 843
CEG was forced into Chapter 11 bankruptcy in May 1994.
Lefkowitz I, 125 F.3d at 619.
The plaintiff challenged aspects
of the bankruptcy proceedings but the challenge was ultimately
See Lefkowitz v. Citi-Equity Grp., Inc., 146 F.3d
609, 611–12 (8th Cir. 1998), cert. denied, 525 U.S. 1154 (1999).
In July of 1995, as part of the bankruptcy proceedings, CEG
submitted a motion to the United States Bankruptcy Court for the
District of Minnesota requesting approval for the assumption and
assignment of certain CEG partnership interests to the entity
Affordable Housing, which, according to the plaintiff, is
controlled by Westreich and Singer. (See Gottlieb Decl. Ex. 3;
Am. Compl. ¶ 23.)
The motion to the Bankruptcy Court
represented that “Gary M. Lefkowitz holds no interest in and
exercises no control over [Affordable Housing].
will have no role in managing the Partnerships if the proposed
assignment . . . is approved by the Bankruptcy Court.” (Gottlieb
Dec. Ex. 3, at 4.)
The Bankruptcy Court, in part “[b]ased upon
the verified motion,” approved the assumption and assignment of
the CEG interest to Affordable Housing on August 8, 1995. (See
Gottlieb Dec. Ex. 4; Am. Compl. ¶ 96.)
Despite CEG’s representations to the Bankruptcy Court, at
some point in 1995, the plaintiff alleges that he entered into a
“business arrangement” with Westreich and Singer in which the
plaintiff would “not oppose” the purchase of the plaintiff’s
interest in CEG by Westreich and Singer, such that Westreich and
Singer would have a 25% ownership interest while Lefkowitz would
retain a 75% ownership interest in certain CEG connected
entities that held real estate properties in New York City. (Am.
Compl. ¶ 2.)
No copy of this purported business arrangement is
provided by the plaintiff.
The plaintiff alleges that on or around November 24, 1997,
Westreich and Singer, through the use of the entities including
Affordable Housing and Coby, finalized a series of transactions
that gave them complete control of certain real estate
properties in New York City and effectively eliminated any
interest that the plaintiff purportedly had in these entities
and properties. (Am. Compl. ¶¶ 51-55, 95-99.)
On February 17, 2004, the plaintiff, while serving his
federal sentence, wrote a letter to Westreich and Singer in
which the plaintiff acknowledged his “removal as the individual
General Partner” of CEG but asserted that he maintained an
interest as a limited partner.
(Gottlieb Dec. Ex. 8 at 1.) 2
the letter, the plaintiff complained that “Mr. Westreich has
refused to accept my telephone calls.
He has also refused to
accept the calls of my cousin . . . regarding my interests in
(Gottlieb Dec. Ex. 8 at 2.)
demanded annual K-1s and other financial information related to
his alleged partnership interests, and stated that if he did not
receive this information by March 5, 2004, he would “file an
action to compel this information. . . .”
(Gottlieb Dec. Ex. 8
According to the plaintiff, shortly after sending the
letter, Westreich called the plaintiff and “assured [the
plaintiff] that he still was the General Partner in each of the
The Amended Complaint contains two sets of paragraphs numbered
101–17. The Court will cite to paragraphs in the first set with the
suffix “A,” and those in the second set, if applicable, with the
suffix “B.” The plaintiff references this letter in ¶ 110A of the
Partnerships and nothing had come down to change that and
Lefkowitz should relax and understand that Leslie Westreich and
Baruch Singer were looking after Lefkowitz’[s] interest. . . .”
(Am. Compl. ¶ 110A.)
In May 2005, the plaintiff sent a letter to Westreich,
expressing concern because the plaintiff saw a newspaper
advertisement indicating that certain New York real estate
properties were in the process of a co-op or condominium
conversion, but that the plaintiff was not consulted in this
(See Gottlieb Decl. Ex. 9 at 1-2; Am. Compl ¶ 113A.)
He demanded a “copy of any condo or coop conversion plan,”
asserted that Westreich “owe[d] [the plaintiff] a duty of
disclosure,” and requested an accounting.
(Gottlieb Dec. Ex. 9
at 2.) The plaintiff then stated: “I do not want this to spin
out of control and into a courtroom.” (Gottlieb Dec. Ex. 9 at 2;
see Am. Compl. ¶ 113A.)
According to the plaintiff, in a
subsequent phone call, Westreich assured the plaintiff that he
“need not be concerned.” (Am. Compl. ¶ 113A.)
In August 2005, upon seeing another newspaper advertisement
confirming conversion plans for the properties, the plaintiff
again wrote to Westreich. (Gottlieb Dec. Ex. 10; Am. Compl. ¶
He stated that despite seeing the confirmed conversion
plans, he had “not received any information from [Westreich].”
(Gottlieb Dec. Ex. 10.)
The plaintiff also stated: “I have been
calling your cell number but you have not been answering.
not know if you are out of the country, sick, or avoiding me.”
(Gottlieb Dec. Ex. 10.)
According to the plaintiff, Westreich
later reassured him that there were no conversion plans.
Compl. ¶ 114A.)
In December 2005, the plaintiff wrote a letter to Westreich
discussing, among other things, the plaintiff’s plan to file a
lawsuit against certain entities -- not parties to this
litigation -- “for breach of fiduciary duty, fraud, breach of
contract, RICO, tortious interference with contract, etc[.] for
taking the position that [the plaintiff] somehow lost [his]
interest in the Limited Partnership as a removed General
Partner.” (Lefkowitz Decl. Ex. 56; see Am. Compl. ¶ 115A.)
appears that the plaintiff eventually filed this lawsuit in
2010, but the claims were denied on statute of limitations
See Lefkowitz v. Wirta, 2014 WL 129634, at *8, *18
(Cal. Ct. App. Jan. 15, 2014) (unpublished) (affirming the
dismissal of the plaintiff’s claims), reh’g denied, (Feb. 7,
2014), review denied, (Apr. 9, 2014), cert. denied, 135 S. Ct.
In June of 2016, the plaintiff filed this action in the
Superior Court of the State of California alleging breach of
contract, breach of fiduciary duty, fraud and RICO claims, and
seeking damages in excess of $2,000,000,000, treble damages
under RICO, and punitive damages.
(See Docket No. 1.)
Thereafter, the case was removed to the United States District
Court for the Central District of California and subsequently
transferred to this Court.
(See Docket No. 1; Docket No. 26.)
The defendants 3 now move to dismiss the Amended Complaint under
Federal Rule of Civil Procedure 12(b)(6).
The defendants argue that each claim is barred by the
statute of limitations. 4
The plaintiff responds by arguing that
The plaintiff’s Amended Complaint focuses on alleged acts
committed by Westreich and Singer, but also names Tryad, Coby, and
Affordable Housing, which the plaintiff alleges are entities used by
Westreich and Singer to extinguish the plaintiff’s partnership
interest. The Amended Complaint also names Westreich’s wife and son,
Shira and Adam. Shira and Adam’s connection to the factual
allegations alleged in the complaint are unclear; the plaintiff sues
each as a “co-conspirator” and an “aider and abettor.” (See Am.
Compl. ¶¶ 3-4.)
While not argued by the defendants, it is doubtful at best
whether the alleged “business arrangement” between the plaintiff,
Westreich, and Singer is an enforceable contract as a matter of law.
See In re Cromer, 153 B.R. 391, 397-98 (Bankr. E.D.N.Y.
1993)(concluding that an alleged side agreement, pursuant to which
purchaser of corporate real estate would make payments to corporate
officer in his individual capacity, was void as contrary to public
policy); cf. Brisbane Lodging, L.P. v. Webcor Builders, Inc., 157 Cal.
Rptr. 3d 467, 477 (Cal. Ct. App. 2013) (noting that for a contract to
be contrary to public policy under California law, “courts must
carefully inquire into the nature of the conduct, the extent of public
harm which may be involved, and the moral quality of the conduct of
the parties in light of the prevailing standards of the community”).
Here, it appears that representations were made to the Bankruptcy
Court in 1995 that the plaintiff would hold “no interest” and have “no
role” in Affordable Housing, the purchaser of the CEG partnership
interests at issue, and the Bankruptcy Court approved the sale in part
“[b]ased upon the verified motion.” (See Gottlieb Dec. Ex. 3, at 4;
Gottlieb Dec. Ex. 4.) The plaintiff now seeks damages related to an
the statute of limitations on his claims should be tolled based
on a variety of different theories.
Under California law, the statute of limitations generally
begins when a cause of action “accrues,” in other words, “on the
date of injury.” See Bernson v. Browning-Ferris Industries, 30
Cal. Rptr. 2d 440, 442 (1994) (internal citations omitted); see
also Aryeh v. Canon Business Solutions, Inc., 151 Cal. Rptr. 3d
827, 832 (2013) (noting that a “cause of action accrues when
[it] is complete with all of its elements—those elements being
wrongdoing, harm, and causation.”).
The plaintiff argues that the discovery rule provides a
basis to toll the statute of limitations here.
rule delays the accrual date “until the plaintiff is aware of
[his] injury and its negligent cause.” See Bernson, 30 Cal.
Rptr. 2d at 442 (internal citations omitted). “[T]he plaintiff
discovers the cause of action when he at least suspects a
factual basis, as opposed to a legal theory, for its elements,
even if he lacks knowledge thereof — when, simply put, he at
least ‘suspects . . . that someone has done something wrong’ to
him, ‘wrong’ being used, not in any technical sense, but rather
alleged “business arrangement,” the terms of which appear to be in
conflict with representations made to the Bankruptcy Court. While
serious questions remain as to whether such a contract is enforceable
as a matter of public policy, because the plaintiff’s claims are
plainly barred under the relevant statutes of limitations, it is
unnecessary to reach the issue.
in accordance with its ‘lay understanding.’”
Norgart v. Upjohn
Co., 21 Cal. 4th 383, 397–98 (1999) (citations omitted).
plaintiff has reason to suspect wrongdoing when he has notice or
information of circumstances that would put a reasonable person
Id. at 398.
Even if a plaintiff does not know the
specific facts necessary to establish a cause of action, he must
“seek to learn the facts necessary to bring the cause of action
in the first place — he cannot wait for them to find him and sit
on his rights; he must go find them himself if he can and file
suit if he does.”
Id. (internal citation and quotation marks
Here, it is plain that the plaintiff had reason to suspect
he had been wronged by the defendants as early as February 17,
It is on that date that he wrote to Westreich and Singer
threatening litigation if he did not receive K-1 forms and other
financial documents related to his purported partnership
Indeed, the California Court of Appeal has already
concluded –- in a case brought by this plaintiff alleging breach
of contract, breach of fiduciary duty, fraud, and RICO claims -that the plaintiff’s contemplation of filing a lawsuit upon
failing to receive K-1 forms began the accrual of his causes of
action. See Wirta, 2014 WL 129634, at *13 (unpublished) 5
California Court Rule 8.1115(a) states that “an opinion of a
California Court of Appeal . . . that is not certified for publication
(concluding that assurances from a defendant that the plaintiff
remained a partner was insufficient to further toll the statute
of limitations because “[i]f [the plaintiff] was not receiving
such a significant document from every partnership in which he
believed he still had an interest, he had reason for far more
than a suspicion of wrongdoing”).
Accordingly, the plaintiff’s
causes of actions related to his alleged loss of his partnership
interests began to accrue as of February 17, 2004.
The plaintiff maintains that the statute of limitations for
his claims should be tolled under the fraudulent concealment
doctrine, which states that a “defendant’s fraud in concealing a
cause of action against him tolls the applicable statute of
limitations, but only for that period during which the claim is
undiscovered by plaintiff or until such time as plaintiff, by
the exercise of reasonable diligence, should have discovered
it.” See Bernson, 30 Cal. Rptr. 2d at 442. A “close cousin of
or ordered published must not be cited or relied on by a court or a
party in any other action.” However, unpublished decisions from the
California Court of Appeal may be relied upon as persuasive authority.
See Am. Zurich Ins. Co. v. Country Villa Serv. Corp., No. 14-CV-03779
(RSWL), 2015 WL 4163008, at *12 n.24 (C.D. Cal. July 9, 2015)
(“[F]ederal courts may consider unpublished California opinions as
persuasive authority.”) (citing Emp’rs Ins. of Wausau v. Granite St.
Ins. Co., 330 F.3d 1214, 1220 n.8 (9th Cir. 2003)); see also
Washington v. Cal. City Correction Ctr., 871 F. Supp. 2d 1010, 1028
n.3 (E.D. Cal. 2012) (“The Court may cite unpublished California
appellate decisions as persuasive authority.”).
the discovery rule,” the fraudulent concealment doctrine “is an
equitable principle designed to effect substantial justice
between the parties.”
As explained above, the plaintiff plainly harbored deep
suspicions about his alleged partnership interests and the
status of his alleged business arrangement with Westreich and
Singer, mentioning the prospect of litigation in 2004 and 2005,
complaining about Westreich’s ignoring him on numerous
occasions, and discussing filing a lawsuit very similar to this
one against certain entities for allegedly extinguishing his
interest in partnerships related to CEG.
Faced with this
information, the plaintiff should have exercised reasonable
diligence as of February 17, 2004 when these suspicions first
became apparent. 6
Moreover, as a matter of equity, “substantial justice”
would not be advanced by tolling the statute of limitations to
permit the plaintiff to pursue claims that would be in direct
conflict with representations made to the Bankruptcy Court about
the plaintiff’s having “no interest” and playing “no role” in
The plaintiff’s lack of reasonable diligence also forecloses
any argument that the statute of limitations should be tolled under
the fiduciary tolling doctrine. See Electronic Equip. Express, Inc.
v. Donald H. Seiler & Co., 176 Cal. Rptr. 239, 251 (Cal. Ct. App.
1981) (noting that under the fiduciary tolling doctrine, “the
limitations period for professional negligence begins to run when the
negligence is discovered or with reasonable diligence could have been
discovered” (citations omitted)).
the purchaser of CEG partnership interests.
argument to toll the statute of limitations on the grounds of
fraudulent concealment is without merit.
The plaintiff also argues that the doctrine of equitable
estoppel should estop the defendants from asserting a statute of
Equitable estoppel applies to
“circumstances in which a party will be estopped from asserting
the statute of limitations as a defense to an admittedly
untimely action because his conduct has induced another into
forbearing suit within the applicable limitations period.”
Lantzy v. Centex Homes, 2 Cal. Rptr. 3d 655, 673 (2003).
invoke the doctrine of equitable estoppel, a plaintiff must
plead facts showing that the defendants’ conduct “actually and
reasonably induced plaintiffs to forbear” filing suit.
The plaintiff alleges that Westreich induced the plaintiff
to refrain from suing by visiting the plaintiff in prison,
sending the plaintiff books, letters, and newspapers, and
reassuring the plaintiff that his interests were safe.
plaintiff’s Amended Complaint and the documents incorporated by
reference show that it was not reasonable for the plaintiff to
forego filing suit until 2016.
The plaintiff threatened to sue
on February 17, 2004 because he had not received K-1 forms and
other financial information related to his alleged partnership
interests, but does not allege that he ever received any such
He again made veiled threats of a lawsuit in
2005 and demanded conversion plans related to the real estate,
but does not allege that he ever received any such plans.
Instead, he simply alleges only that Westreich sent gifts and
made assurances that the plaintiff “would be a very very rich
man when he was released from prison.”
(Am. Compl. ¶ 140.) In
the face of the evidence before him indicating that he no longer
had a partnership interest, the plaintiff was not “reasonably
induced” to forego filing suit.
Lantzy, 2 Cal. Rptr. 3d at 674.
The plaintiff’s argument that the defendants should be equitably
estopped from asserting a statute of limitations defense is
without merit. 7
See Wirta, 2014 WL 129634, at *15-16 (rejecting
The plaintiff asserts a variety of other theories to argue that
the statute of limitations should be tolled, but each are without
There is no basis to toll the statute of limitations on the basis
of the continuous representation doctrine, which “applies only so long
as [legal] representation continues ‘regarding the specific subject
matter in which the alleged wrongful act or omission occurred.”
Lockton v. O'Rourke, 109 Cal. Rptr. 3d 392, 400 (2010) (emphasis and
citation omitted). The plaintiff’s own Amended Complaint asserts that
Westreich was disbarred in 1995, (see Am. Compl. ¶ 85), and the
plaintiff does not allege that Westreich represented the plaintiff in
legal matters after 1994, (see Am. Compl. ¶¶ 33-34). Accordingly, the
plaintiff cannot invoke the continuous representation doctrine to toll
the statute of limitations here.
The continuing conspiracy doctrine, which tolls the statute of
limitations until the “last overt act” of the alleged conspiracy, is
likewise inapplicable. See State ex rel. Metz v. CCC Info. Servs.,
Inc., 57 Cal. Rptr. 3d 156, 168-69 (Cal. Ct. App. 2007). To the
extent that an alleged conspiracy to extinguish the plaintiff’s
interests existed in this case, the “primary purpose of the alleged
this plaintiff’s argument that defendants should be equitably
estopped from relying on a statute of limitations defense).
The causes of action alleged by the plaintiffs began
accruing on February 17, 2004, when it became apparent that the
plaintiff “suspect[ed] . . .
that someone ha[d] done something
wrong” to him, and had “reason to suspect” based on “notice or
information of circumstances [that would] put a reasonable
person on inquiry.’” See Norgart, 21 Cal. 4th at 397–98. The
plaintiff’s remaining arguments seeking to toll the statute of
limitations are without merit.
The plaintiff alleges breach of contract, breach of
fiduciary duty, fraud, and violations of RICO.
addresses each in turn.
conspiracy had been realized” by 1997 when Westreich and Singer
allegedly eliminated the plaintiff’s interests. Accordingly, “the
statute of limitations on the conspiracy commence[d] running, and
subsequent conduct related to the conspiracy, such as flight or
concealment, does not constitute ‘overt acts’ sufficient to recommence
the statutory period.” Id. (citation omitted). There is therefore no
basis to toll the statute of limitations pursuant to the continuing
The plaintiff also makes a vague reference to the continuing
accrual doctrine, which states that “[w]hen an obligation or liability
arises on a recurring basis, a cause of action accrues each time a
wrongful act occurs.” See id. at 168 (internal citations omitted).
Here, however, the plaintiff “has not alleged facts that show a
continuing violation” because his causes of action “are based on . . .
a loss of partnership interests that he believed were protected.”
Wirta, 2014 WL 129634 at *17.
The plaintiff alleges that the defendants Westreich and
Singer breached the alleged “business arrangement” between the
plaintiff, Westreich, and Singer for 75% of the ownership
interests purchased from CEG.
“An action upon any contract, obligation or liability
founded upon an instrument in writing” must commence within four
years of the action. See Cal. Code Civ. Proc. § 337(1). But “an
action upon a contract, obligation or liability not founded upon
an instrument of writing” must commence within two years of the
action. See Cal. Code Civ. Proc. § 339(1).
Under California law, if “at the time the cause of action
accrued” a plaintiff is “imprisoned on a criminal charge,” the
statute of limitations on a cause of action is tolled for a
period “not to exceed two years.”
Cal. Code Civ. Proc.
Any cause of action related to the defendants’ alleged
elimination of the plaintiff’s partnership interests began to
accrue on February 17, 2004, when the plaintiff expressed
suspicions regarding his interests and threatened to sue
Westreich and Singer to compel them to provide certain financial
Because the plaintiff was incarcerated as of that
date, the statute of limitations was tolled for two years, and
began to accrue on February 17, 2006.
The plaintiff does not
claim that his alleged “business arrangement” was memorialized
in writing, but even applying the longer four year statute of
limitations applicable to a breach of contract action for
written agreements, the plaintiff was required to file suit on
this breach of contract claim by February 17, 2010. 8
Accordingly, the plaintiff’s breach of contract claim related to
his partnership interests was time-barred when he filed suit in
June of 2016.
The plaintiff also alleges a breach of fiduciary duty.
statute of limitations for a breach of fiduciary duty in
California is four years.
See Thomson v. Canyon, 129 Cal. Rptr.
3d 525, 534 (Cal. Ct. App. 2011) (“The Code of Civil Procedure
Although unmentioned in his opposition to the motion to
dismiss, the plaintiff’s Amended Complaint alleges another claim for
breach of contract related to $500,000 that the plaintiff allegedly
entrusted to Westreich in 1993 or 1994 –- prior to the plaintiff’s
incarceration. The Amended Complaint does not specify when repayment
of this loan was due. The loan is therefore one “payable on demand,”
which is “deemed payable at . . . inception, and the statute begins to
run from such time.” Buffington v. Ohmert, 61 Cal. Rptr. 360, 360
(Cal. Ct. App. 1967); see also Ames v. Ames, No. 13-CV-0405 (TOR),
2016 WL 7015642, at *2 (E.D. Wash. Nov. 30, 2016) (noting that under
California law, a loan is payable on demand when a loan “does not
state any time of payment”). Accordingly, the statute of limitations
on the loan began to run, at the latest, in 1994. Even applying the
longer four-year statute of limitations applicable to a breach of
contract action for written agreements, the plaintiff was required to
file suit, at the latest, in 1998. Accordingly, the plaintiff’s
breach of contract claim for the $500,000 allegedly entrusted to
Westreich, filed as part of the plaintiff’s suit in 2016, is timebarred.
does not specify a statute of limitations for breach of
fiduciary duty. The cause of action is therefore governed by the
residual four-year statute of limitations in Code of Civil
Procedure section 343.”).
After tolling the statute of
limitations for two years because of the plaintiff’s
incarceration, his breach of fiduciary duty claim began to
accrue on February 17, 2006.
The plaintiff was required to
bring his breach of fiduciary claim by February 17, 2010.
Accordingly, his breach of fiduciary claim, filed in June of
2016, is time-barred.
The plaintiff alleges fraud, which is subject to a statute
of limitations under California law of three years from the date
of the discovery of the facts constituting the fraud.
Civ. Proc. § 338(d).
Due to the plaintiff’s incarceration, this
cause of action began to accrue on February 17, 2006 and the
plaintiff was therefore required to file suit by February 17,
Because this claim was filed in June of 2016, it is time-
The plaintiff alleges civil violations of RICO, which is
subject to a four year statute of limitations.
Holding Corp. v. Malley-Duff & Assocs., Inc., 483 U.S. 143, 156
(1987). A cause of action under RICO accrues when the plaintiff
suffers an injury, and the statute of limitations begins to run
when the plaintiff discovers or reasonably should have
discovered that injury.
Koch v. Christie’s Int’l PLC, 699 F.3d
141, 148-49 (2d Cir. 2012).
The plaintiff’s RICO claim thus
began to accrue on February 17, 2004 9, and the plaintiff was
required to file suit by February 17, 2008.
filing of the plaintiff’s RICO claims in June of 2016 is timebarred.
The Court has considered all of the arguments of the
parties. To the extent not specifically addressed above, the
remaining arguments are either moot or without merit. 10 For the
It appears that the California law permitting the tolling of a
statute of limitations for the period when a litigant is incarcerated
is inapplicable to the plaintiff’s civil RICO claim. See Lakin v.
Skaletsky, No. 08–C–842 (JWD), 2008 WL 4662846 at *5 (N.D. Ill. Oct.
15, 2008) (concluding that “Illinois savings statute is inapplicable”
for a civil RICO claim in federal court because civil RICO is “a
federal cause of action with federally defined statute of
limitations”). In any event, even if the statute of limitations for
the plaintiff’s civil RICO claim were tolled for two years due to the
plaintiff’s incarceration, the plaintiff was required to file suit by
February 17, 2010, making his June 2016 civil RICO claim time-barred.
As part of his opposition to the motion to dismiss, the
plaintiff has submitted an array of extraneous documents. The
plaintiff has also submitted a sur-reply. Both are improper. See
Madu, Edozie & Madu, P.C. v. SocketWorks Ltd. Nig., 265 F.R.D. 106,
122-123 (S.D.N.Y. 2010) (“Courts in this Circuit have made clear that
a plaintiff may not shore up a deficient complaint through extrinsic
documents submitted in opposition to a defendant’s motion to
dismiss.”); Kapiti v. Kelly, No. 07-CV-3782(RMB)(KNF), 2008 WL 754686,
at *1 n.1 (S.D.N.Y. Mar. 12, 2008) (“Allowing parties to submit
surreplies is not a regular practice that courts follow, because such
a procedure has the potential for placing a court ‘in the position of
refereeing an endless volley of briefs.’”). In any event, the
reasons explained above, the defendants’ motion to dismiss is
The Clerk is directed to enter judgment dismissing the
Amended Complaint. The Clerk is also directed to close all
pending motions and to close this case.
New York, New York
August 11, 2017
John G. Koeltl
United States District Judge
improperly filed documents and sur-reply do not change the result in
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