On June 2, 2024, Justice Masley of the New York County Commercial Division issued a decision in Grosso v. Cy Twombly Found., 2024 NY Slip Op. 31905(U), holding that a fraud claim was untimely because of the plaintiff’s failure to sue within two years of being on inquiry notice of the possible fraud, explaining:
An action based upon fraud [or negligent misrepresentation] must be commenced within the greater of six years from the date of the fraud [or misrepresentation] or within two years from the time plaintiffs discovered, or with reasonable diligence, could have discovered the fraud or misrepresentation. Grosso does not and cannot contest the Movants’ assertion that its fraud and negligent misrepresentation claims are subject to the greater of the six-year limitation or the two-year discovery rule. Grosso also does not contest the fact that it knew that the Catalogue Raisonne was published in 2013 without including the Work.
Even if Grosso believed that the Catalogue Raisonne could be supplemented in due course, it was incumbent upon him to exercise reasonable diligence and inquire of the Foundation when the Catalogue Raisonne would be supplemented to include the Work. Despite his knowledge of the significance of being included in a Catalogue Raisonne for an artwork’s authenticity and consequently marketability, Grosso made no effort to contact the Foundation and inquire about the inclusion of the Work in any forthcoming of Twombly’s forthcoming catalogue raisonnes. Grosso’s alternate argument that he only discovered the fraud regarding the Authentication during the discovery in the Phillips Action is also without merit as actual knowledge of fraud is not required to trigger the limitation period and such period began to run from the time Grosso could have with reasonable diligence discovered the fraud or misrepresentation.
The court finds that Grosso was on inquiry notice in 2013 when the Catalogue Raisonne was published without inclusion of the Work and his fraud and negligent misrepresentation claims are time-barred. The court does not address the Movants arguments on dismissal of the fraud and negligent misrepresentation claims pursuant to 3211 (a) (1) and (7) since the court has already determined that these claims are untimely.
(Internal quotations and citations omitted).