In this breach of an oral contract action, the Plaintiff alleges that in 2008 he invested $200,000.00 with the Defendant and was promised an 8 percent ownership interest in the company. The Complaint alleges that in 2017, the Defendant for the first time stated unequivocally that in fact the Plaintiff had no equity interest in the company. This action was commenced on May 18, 2023, seeking two declarations: 1) Declaring that the $200,000 transferred by Cinquemani to Money Source in or about 2008 was an equity investment as a result of which Cinquemani holds an eight percent equity interest in Money Source, and 2) declaring that Cinquemani has the full rights of a shareholder of Money Source regarding reviewing its books and records. The Defendant moves to dismiss on the ground that the action is time-barred as a matter of law, and that the complaint fails to state a cause of action pursuant to CPLR 3211 (a) (1), (7). In support, the Defendant contends that the Plaintiff should have commenced a breach of contract action some time in 2014 to avoid the running of the statute of limitations, but instead commenced in 2023, fifteen years after investing in the Defendant company. Moreover, the Plaintiff’s attempt to couch this action as one for declaratory relief is inappropriate. The Defendant relies upon Apple Records, Inc. v. Capitol Records, Inc., (137 AD2d 50, 54, 529 NYS2d 279 [1st Dept 1988]), which held that a cause of action for a declaratory judgment is unnecessary and inappropriate when the plaintiff has an adequate, alternative remedy in another form of action, such as breach of contract.” The Plaintiff could have pursued a claim, but he never availed himself of that opportunity. The Defendant also cites Akhunov v. 771620 Equities Corp. (78 AD3d 870, 871, 911 NYS2d 448 [2d Dept 2010]), which held that “since the cause of action for declaratory relief was commenced more than six years after the date upon which a cause of action for reformation of the parties’ contract, which carries a six-year statute of limitations, would have accrued, the declaratory judgment cause of action is time-barred.” The Defendant further relies upon Deutsche Bank Natl. Trust Co. v. Flagstar Capital Mkts., (32 NY3d 139, 145, 88 NYS3d 96 [2018]), which expressly stated that the Court does not apply the discovery rule to statutes of limitations in contract actions. In opposition, the Plaintiff disputes the Defendant’s contention that the declaratory judgment cause of action is inapplicable on the ground that there is an alternative recovery. The Plaintiff relies on Zwarycz v. Marnia Constr., Inc., (102 AD3d 774, 958 NYS2d 440 [2d Dept 2013]), which held that the statute of limitations accrued when the “plaintiff received direct, definitive notice that the defendant is repudiating his or her rights.” Thus, the Plaintiff states that it received a repudiation of his rights in 2017, therefore, the claim is within the statute of limitations since he commenced the action in 2023. A cause of action for declaratory relief accrues when there is a bona fide, justiciable controversy between the parties (CPLR 3001). The CPLR does not prescribe a specific limitations period for declaratory judgment actions. Rather, the applicable statute of limitations for such an action depends on the underlying claim and the nature of the relief sought. In order to determine the statute of limitations applicable to a particular declaratory judgment action, the substance of the action must be examined to identify the relationship out of which the claim arises, and the relief sought (Solnick v. Whalen, 49 NY2d 224, 425 NYS2d 68 [1980]). Here, inasmuch as this action centers around an oral agreement which is governed by a six-year statute of limitations, the declaratory judgment cause of action is governed by the same six years. On a motion pursuant to CPLR 3211 (a) (5) to dismiss a cause of action on the ground that it is barred by the statute of limitations, the movant bears the initial burden of establishing, prima facie, that the time in which to sue has expired. Once this initial showing is made, the burden shifts to the proponent to raise a question of fact as to whether the statute of limitations has been tolled or was otherwise inapplicable, or by establishing that an exception to the statute of limitations exists (Swift v. New York Med. Coll., 25 AD3d 686, 808 NYS2d 731 [2d Dept 2006]). The statute of limitations applicable to a breach of contract cause of action is six years (CPLR 213[2]), “and begins at the time of the breach, even when no damage occurs until later, and even though the injured party may be ignorant of the existence of the wrong or injury” (Houtenbos v. Fordune Assn., Inc., 200 AD3d 662, 666, 160 NYS3d 57 [2d Dept 2021], citing Ely-Cruikshank Co. v. Bank of Montreal, 81 NY2d 399, 402-403, 599 NYS2d 501 [1993]). Here, the Defendant has demonstrated, prima facie, that the breach occurred in 2008 since although the Plaintiff tendered $200,000, no terms of the purported exchange were alleged in the complaint and no writing was attached to the pleadings (see Statharos v. Statharos, 219 AD3d 651, 194 NYS3d 530 [2d Dept 2023]). The Plaintiff must have brought suit sometime in 2014 to enforce the existence of the agreement. Therefore, the time to sue has expired. Contrary to the Plaintiff’s contention, the fact that he learned in 2017 that the Defendant had no intention of transferring 8 percent in equity ownership to him did not raise a question of fact regarding whether the statute of limitations would be tolled and is not an exception to the six-year statute of limitations for contract actions. Therefore, the Plaintiff has failed to raise an issue of fact. The Plaintiff provides no legal support which allows him to seek a declaratory judgment when the statute of limitations has run, since the breach of contract claim would be confined to those periods of time not barred by the applicable statute of limitations (see Apple Records, Inc. v. Capitol Records, Inc., supra at 54). If the underlying dispute could have been resolved through a form of action or proceeding for which a specific limitation period is statutorily provided, that limitation period governs the declaratory judgment action (see Save the Pine Bush v. City of Albany, 70 NY2d 193, 202, 518 NYS2d 943 [1987]). The Plaintiff’s only remedy would be under a breach of contract claim which is time-barred. Moreover, since the statute of limitations has run on the purported contract, the Plaintiff’s request for a declaratory judgment of this contract issue is also time-barred and, therefore, has no basis in law or fact. Therefore, this Court declines to declare that the Plaintiff is not entitled to 8 percent of equity interest in the Defendant. Defendant’s motion is granted. The remaining arguments are rejected as without merit. Accordingly, it is ORDERED that the Defendant’s motion (Mot. Seq. 001) for an order dismissing the complaint is granted; and it is further ORDERED that the Court declines to declare that the $200,000 transferred by Cinquemani to Money Source in or about 2008 was an equity investment as a result of which Cinquemani holds an eight percent equity interest in Money Source; and it is further ORDERED that the Court declines to declare that Cinquemani has the full rights of a shareholder of Money Source regarding reviewing its books and records; and it is further ORDERED that the matter is disposed. The foregoing constitutes the decision and ORDER of this Court. Dated: January 11, 2024
