Hopkinson v. Estate of Siegal ( 2012 )

11-1842-cv
Hopkinson v. Estate of Siegal
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held at
the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New
York, on the 21st day of May, two thousand twelve.
PRESENT: JON O. NEWMAN,
CHESTER J. STRAUB,
GERARD E. LYNCH,
Circuit Judges.
__________________________________________________
JUDITH L. HOPKINSON,
Plaintiff-Appellant,
v. No. 11-1842-cv
THE ESTATE OF RICHARD SIEGAL, GAIL SIEGAL,
MICHAEL SIEGAL, JEFFREY SIEGAL, BIPPY SIEGAL,
MARIA SCIBELLI, BISTATE OIL MANAGEMENT
CORPORATION, SST HOLDING COMPANY, LLC,
PALACE EXPLORATION COMPANY, TTO DRILLING
COMPANY, INC., THO DRILLING COMPANY, INC., TAH
DRILLING COMPANY, INC., TAQ DRILLING
COMPANY, INC., VAIL DRILLING COMPANY, INC., OIL
AND GAS TITLE HOLDING CORPORATION,
Defendants-Appellees.
__________________________________________________
FOR APPELLANT : STEVEN G. STORCH (Rena Andoh, on the brief), Storch
Amini Munves PC, New York, New York.
FOR APPELLEE: STEVEN MICHAEL KAPLAN, Rosenfeld & Kaplan, LLP,
New York, New York.
Appeal from the United States District Court for the Southern District of New York
(Leonard B. Sand, J).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED that the judgment of the district court is AFFIRMED.
Plaintiff-appellant Judith Hopkinson brought this action against defendants-
appellees (collectively, “Siegal”),1 alleging several false representations relating to
Hopkinson’s investment in partnerships set up as both tax shelters and investment
vehicles for the purpose of oil and gas exploration. Hopkinson appeals the district court’s
decision granting summary judgment to Siegal on the basis of Hopkinson’s failure to file
suit within the applicable limitations period. We assume the parties’ familiarity with the
procedural history and facts of the case.
We review a grant of summary judgment de novo, “construing the evidence in the
light most favorable to the non-moving party and drawing all reasonable inferences in its
favor.” Allianz Ins. Co. v. Lerner, 416 F.3d 109, 113 (2d Cir. 2005). “Summary
judgment is appropriate only if the moving party shows that there are no genuine issues of
material fact and that the moving party is entitled to judgment as a matter of law.” Miller
v. Wolpoff & Abramson, L.L.P., 321 F.3d 292, 300 (2d Cir. 2003).
1
Richard Siegal, the lead defendant, died prior to the filing of this suit.
2
The applicable statute of limitations requires a plaintiff to file suit by the greater of
six years from the date of accrual, or two years after the “facts were discovered or . . .
[the] facts could with reasonable diligence have been discovered.” N.Y. C.P.L.R. §§
203(g), 213(8). The parties agree that, in this case, the statute’s accrual must be before
March 4, 2008, two years before Hopkinson filed suit.
For substantially the same reasons outlined in the district court’s thorough opinion,
we conclude that the facts of Siegal’s alleged fraud could have been discovered, with the
plaintiff’s reasonable diligence, before March 4, 2008. As early as 2005, Hopkinson
knew that she was not receiving the return on investment she had been promised by
Siegal. Moreover, she knew by December 2006 that the Internal Revenue Service was
investigating the tax deductions offered by the Siegal vehicles in which she had invested.
Courts applying New York law have already determined that plaintiffs, such as
Hopkinson, who purport to have invested in fraudulent tax shelters may be on notice
when the Internal Revenue Service announces an investigation of those shelters. See
Kottler v. Deutsche Bank AG, 607 F. Supp. 2d 447, 460 (S.D.N.Y. 2009); Mirman v.
Berk & Michaels, PC, No. 91 Civ. 8606, 1992 WL 332238, at *2-*3 (S.D.N.Y. Oct 30,
1992).
Moreover, Hopkinson’s receipt in 2007 of the Arnall Complaint, which alleged
that several of the same frauds and representations had been made by some of the same
defendants in connection with similar oil and gas investments/tax shelters, was also
sufficient to put her on inquiry notice. It is of no moment that the prior complaint alleged
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a fraud involving significantly larger sums of money, concerned a joint venture rather
than a partnership, or made additional unrelated allegations of misconduct by Siegal. The
point is that Hopkinson, by her own admission, had access to allegations that Siegal had
engineered a fraudulent investment and tax shelter scheme that bore a striking
resemblance to her own partnerships with Siegal. New York law has recognized court
documents less detailed than the Arnall complaint as an adequate basis for triggering the
accrual period. See CSAM Capl., Inc. v. Lauder, 885 N.Y.S.2d 473, 479-80 (1st Dep’t
2009) (holding plaintiffs were on notice that they may have been defrauded by
misrepresentations of the fund’s hedging strategy upon receipt of related arbitration
notification). Thus, because the district court properly found that no reasonable fact
finder could conclude that the suit was filed within the limitations period, summary
judgment was appropriately granted to the defendants.2
We have considered the appellant’s remaining arguments and find them to be
without merit. For the foregoing reasons, the judgment is AFFIRMED.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk of Court
2
Hopkinson’s reliance on two federal cases interpreting the Securities Exchange Act’s
statute of limitations period is unavailing. See Merck & Co., Inc. v. Reynolds, 130 S. Ct.
1784 (2010); City of Pontiac Gen. Emps. Ret. Sys. v. MBIA, Inc., 637 F.3d 169 (2d Cir.
2011). As Hopkinson acknowledged at oral argument, the relevant statute of limitations for
Hopkinson’s fraud claim is determined by reference to New York law.
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