                           State of New York
                    Supreme Court, Appellate Division
                       Third Judicial Department
Decided and Entered: May 26, 2016                       521687
________________________________

HERMAN W. PICARD III et al.,
                    Respondents,
      v                                      MEMORANDUM AND ORDER

JEANNE PICARD FISH,
                    Appellant,
                    et al.,
                    Defendants.
________________________________


Calendar Date:    February 19, 2016

Before:    Peters, P.J., Garry, Rose, Lynch and Clark, JJ.

                              __________


      Lippes Mathias Wexler Friedman LLP, Albany (Thomas D. Latin
of counsel), for appellant.

      Farer & Schwartz, PC, Latham (Steven D. Farer of counsel),
for respondents.

                              __________


Rose, J.

      Appeal from an order of the Supreme Court (Connolly, J.),
entered June 16, 2015 in Albany County, which, among other
things, partially denied defendant Jeanne Picard Fish's motion to
dismiss the amended complaint against her.

      Plaintiffs and defendant Jeanne Picard Fish (hereinafter
defendant) are siblings and the children of Alice Picard
(hereinafter decedent). In 1977, decedent executed a will
directing that her real property located in Albany County be held
in trust for the benefit of her children and naming defendant as
executor of decedent's estate and trustee of the testamentary
trust that was to contain the property. In 1988, however,
                              -2-                521687

decedent conveyed to defendant that same property by duly
recorded quitclaim deed. Nine years later, in 1997, decedent
died, leaving the 1977 will unamended. Subsequently, plaintiffs
and defendant continued to work in a business that leased
premises on the property. The business continued to use the
property until "well after" decedent's death, and all parties
were aware that the will was never admitted to probate. Despite
this, plaintiffs allege it was not until 2013 that they learned
that defendant had taken title to the property in 1988.

      In 2014, plaintiffs commenced this action seeking
rescission of the deed based on allegations that decedent either
lacked capacity to execute it or did so as a result of
defendant's undue influence and coercion. The complaint also
sought rescission of the deed based upon fraud, as well as the
imposition of a constructive trust. Defendant thereafter moved
to dismiss the amended complaint, arguing, among other things,
that plaintiffs' causes of action are time-barred. Ultimately,
Supreme Court dismissed plaintiffs' claim for rescission based on
fraud, but denied defendant's motion in all other respects on
equitable estoppel grounds. Specifically, the court found that
defendant met her initial burden of demonstrating that the action
was commenced 26 years after the 1988 deed conveyance, long after
the expiration of any arguably relevant limitations period, but
that plaintiffs met their shifted burden of demonstrating that
defendant should be equitably estopped from asserting a statute
of limitations defense because she was alleged to be in a
fiduciary relationship with them, which obligated her to inform
them of the deed transfer. Defendant appeals.

      The doctrine of equitable estoppel applies where a
defendant's fraudulent or deceptive conduct induces a plaintiff
to refrain from filing a timely action (see Zumpano v Quinn, 6
NY3d 666, 673-674 [2006], Simcuski v Saeli, 44 NY2d 442, 448-449
[1978]). Here, plaintiffs' only allegation that defendant
dissuaded them from bringing a timely action by affirmatively
misrepresenting her status as sole owner of the property is that,
in 2010, plaintiff David Picard questioned defendant about a "For
Sale" sign on a portion of the property. Defendant is alleged to
have responded that she was attempting to sell it because "we
don't use it and if we sell it the three of us . . . would be
                              -3-                521687

able to . . . benefit financially." Even assuming the truth of
this allegation, the interaction occurred 22 years after
defendant took title to the property, making it irrelevant to
plaintiffs' failure to commence a timely action challenging the
validity of the 1988 conveyance.

      Supreme Court recognized that "concealment without actual
misrepresentation may form the basis for invocation of the
doctrine [of equitable estoppel] if 'there was a fiduciary
relationship which gave [the] defendant an obligation to inform
[the] plaintiff of facts underlying the claim'" (Doe v Holy See
[State of Vatican City], 17 AD3d 793, 795 [2005], lv denied 6
NY3d 707 [2006], quoting Jordan v Ford Motor Co., 73 AD2d 422,
424 [1980]; accord Robare v Fortune Brands, Inc., 39 AD3d 1045,
1046 [2007], lv denied 9 NY3d 810 [2007]; see Zumpano v Quinn, 6
NY3d at 675). Here, the court found that plaintiffs had
sufficiently alleged that defendant owed them a fiduciary duty to
disclose the conveyance when it occurred in 1988 because of her
nomination as executor-trustee in the 1977 will, as well as their
familial relationship.

      We note, however, that the existence of a familial
relationship does not equate to a fiduciary relationship for
equitable estoppel purposes (see Scheuer v Scheuer, 308 NY 447,
452 [1955]; see also Rattner v York, 174 AD2d 718, 721 [1991]).
Nor does the mere fact that a will has nominated an executor, in
and of itself, create a fiduciary relationship between the
nominee and the will's beneficiaries. Indeed, because of the
ambulatory nature of a will, a nominated executor is prohibited
from acting in a fiduciary capacity until the testator dies (see
EPTL 11-1.3; Gaentner v Benkovich, 18 AD3d 424, 426 [2005];
Matter of Yarm, 119 AD2d 754, 754 [1986]). Similarly, "a
testamentary trust cannot become effective prior to the
testator's death" (27B Carmody-Wait 2d § 164:1; see EPTL 11-2.1
[c] [1]; Matter of Hennel, 133 AD3d 1120, 1121 [2015]; Gridley v
Gates, 228 App Div 579, 583 [1930]), and the presumptive trustee
of such a trust does not assume that role – and the fiduciary
obligations that come with it – before that point in time (see
SCPA 103 [49]). Thus, the earliest point at which defendant
would have assumed a fiduciary duty to plaintiffs that arguably
required her to disclose the 1988 conveyance of the property was
                               -4-                521687

when decedent died in 1997.

      To the extent that statutory tolling provisions for
individuals under a disability may have extended plaintiffs'
claim that decedent lacked the capacity to execute the 1988 deed
(see CPLR 208; 213 [1]),1 we note that "equitable estoppel will
not toll a limitations statute when parties possess 'timely
knowledge' sufficient to place them 'under a duty to make inquiry
and ascertain . . . all the relevant facts'" (Ramsay v Mary
Imogene Bassett Hosp., 113 AD2d 149, 153 [1985], lvs dismissed 67
NY2d 608, 1028 [1986], quoting Augstein v Levey, 3 AD2d 595, 598
[1957], affd 4 NY2d 791 [1958]; see Rite Aid Corp. v Grass, 48
AD3d 363, 364-365 [2008]). Such is the case here, inasmuch as
the 1988 deed was duly recorded, and the effect of that recording
was to give plaintiffs and anyone else with an interest in the
subject property constructive notice of that transfer (see Andy
Assoc. v Bankers Trust Co., 49 NY2d 13, 20-24 [1979]; Puchalski v
Wedemeyer, 185 AD2d 563, 565 [1992]; see also Real Property Law
art 9). We also conclude that plaintiffs should have inquired
about the ownership status of the property before commencing this
action because of their undisputed awareness that decedent's will
was never probated, that its terms never went into effect and
that, even though their expected shared interest in the property
never came to fruition, they continued to work in a business on
the subject property for many years following decedent's death.
This knowledge placed them under a duty to make inquiry (see
Pulver v Dougherty, 58 AD3d 978, 980 [2009]; Davis v Smith Corp.,
262 AD2d 752, 754 [1999]; Contento v Cortland Mem. Hosp., 237
AD2d 725, 726 [1997], lv denied 90 NY2d 802 [1997]). Again, had
they done so, the recorded deed would have immediately given them
actual knowledge of the property's owner.

      Finally, we cannot agree with the dissent's attempt to base
the application of equitable estoppel upon an alternate fiduciary
relationship arising out of the parties' participation in a
business on the property. Plaintiffs did not raise such an
argument on appeal (see Johnson v First Student, Inc., 54 AD3d


     1
        Plaintiffs do not argue on appeal that any particular
tolling period applies to their surviving causes of action.
                              -5-                521687

492, 493 [2008]), and neither the complaint nor the supporting
affidavits describe the nature of the business or the parties'
working relationship. Only decedent's will suggests that it was
a partnership at the time that her will was drawn, but there is
no allegation that such a relationship existed during the many
years following her death. Thus, even if the sparse complaint
and plaintiffs' affidavits are read liberally, a timely business
fiduciary relationship sufficient to support equitable estoppel
cannot reasonably be found here (see Lusins v Cohen, 49 AD3d
1015, 1018 [2008]; Doe v Holy See [State of Vatican City], 17
AD3d at 795-796; cf. Rafferty Sand & Gravel, LLC v Kalvaitis, 116
AD3d 1290, 1291 [2014]). Accordingly, we agree with defendant
that Supreme Court erroneously applied the doctrine of equitable
estoppel to her statute of limitations defense.

     Peters, P.J., and Clark, J., concur.


Garry, J. (dissenting).

      We respectfully dissent. Initially, we agree with the
majority that no fiduciary relationship was established arising
from either the familial relationship of defendant Jeanne Picard
Fish (hereinafter defendant) with plaintiffs – her brothers – or
by her nomination as executrix of their mother's will.
Nonetheless, we would affirm, finding that plaintiffs have
averred facts sufficient to support an alternate ground for
potentially finding a fiduciary relationship, arising from the
parties' operation of a family business located upon the subject
real property.

      Upon this motion, Supreme Court was required to "accept the
facts as alleged in the complaint as true, accord plaintiff[s]
the benefit of every possible favorable inference, and determine
only whether the facts as alleged fit within any cognizable legal
theory" (Faison v Lewis, 25 NY3d 220, 224 [2015] [internal
quotation marks, brackets and citation omitted]; see Zumpano v
Quinn, 6 NY3d 666, 681 [2006]). "A fiduciary relationship arises
between . . . persons when one of them is under a duty to act for
or to give advice for the benefit of another upon matters within
the scope of the relation. Put differently, a fiduciary relation
                              -6-                521687

exists when confidence is reposed on one side and there is
resulting superiority and influence on the other" (Roni LLC v
Arfa, 18 NY3d 846, 848 [2011] [internal quotation marks, brackets
and citations omitted]). As acknowledged by the majority, the
doctrine of equitable estoppel may apply in circumstances where a
plaintiff is prevented from commencing suit within the
limitations period as a result of a fiduciary's concealment of
facts giving rise to the claim (see Doe v Holy See [State of
Vatican City], 17 AD3d 793, 795 [2005], lv denied 6 NY3d 707
[2006]; compare Rattner v York, 174 AD2d 718, 721 [1991]).

      Here, viewing plaintiffs' amended complaint and the limited
evidence in the record, it appears that the parties were
collectively engaged in operating a family business upon the
property as a partnership, and that defendant was responsible for
handling the financial aspects of that business.2 It is well
settled that partners in business "are bound by a fiduciary duty
requiring 'the punctilio of an honor the most sensitive'"
(Graubard Mollen Dannett & Horowitz v Moskovitz, 86 NY2d 112, 118
[1995], quoting Meinhard v Salmon, 249 NY 458, 464 [1928]; see
Morris v Crawford, 304 AD2d 1018, 1021 [2003]). The fiduciary
duties owed between business partners are "inflexible"•and "bar[]
not only blatant self-dealing, but also requir[e] avoidance of
situations in which a fiduciary's personal interest possibly
conflicts with the interest of those owed a fiduciary duty"
(Birnbaum v Birnbaum, 73 NY2d 461, 466 [1989] [internal quotation
marks and citation omitted]). Plaintiffs allege that in the
course of managing the financial aspects of the business – and
thus acting in a position of superior knowledge and
responsibility relative to the business affairs – defendant
actively concealed the fact that the real property upon which
their business was located had been conveyed to her. The
operations of the business upon the property carried on as they
always had (compare Marincovich v Dunes Hotels & Casinos, Inc.,
41 AD3d 1006, 1007-1011 [2007]), while defendant allegedly led
plaintiffs to believe that the property was still a part of their


    2
        The form of the family business remains unclear, but the
will of the parties' mother states that the business is "operated
by my three children as a partnership."
                              -7-                  521687

mother's estate. Plaintiffs continued to expect that their
interests would be distributed at the time that the property was
ultimately sold and the will probated. In 2010, upon observing a
"for sale" sign upon a separate portion of the property, one of
the plaintiffs questioned defendant about it and was allegedly
advised, in substance, that the sale would benefit all three
parties. The conveyance to defendant was not ultimately
discovered until 2013 – a full 25 years following the conveyance
– when, in the course of an argument with one of the plaintiffs,
defendant revealed to him that he did not, in fact, own any part
of the property. Having been thus alerted to investigate,
plaintiffs then discovered the deed and commenced suit shortly
thereafter.

      The pertinent facts have been poorly developed, in part due
to the early stage of this litigation. However, if ultimately
proven, defendant's position of responsibility within the family
business may be sufficient to establish the existence of a
fiduciary duty owed to plaintiffs, including the duty to inform
them of any conveyance effecting their interests. Thus, viewing
the allegations in the light most favorable to plaintiffs, we
find no error in Supreme Court's application of the doctrine of
equitable estoppel, and would affirm (see Local No. 4, Intl.
Assn. of Heat & Frost & Asbestos Workers v Buffalo Wholesale
Supply Co., Inc., 49 AD3d 1276, 1278 [2008]; see also Niagara
Mohawk Power Corp. v Freed, 288 AD2d 818, 820 [2001]).

     Lynch, J., concurs.


      ORDERED that the order is modified, on the law, with costs
to defendant Jeanne Picard Fish, by reversing so much thereof as
denied said defendant's motion to dismiss the amended complaint;
motion granted in its entirety and amended complaint dismissed;
and, as so modified, affirmed.



                             ENTER:




                             Robert D. Mayberger
                             Clerk of the Court
