On January 9, 2025, the First Department issued a decision in Black v. Phoenix Cayman Ltd., 2025 NY Slip Op. 00147, holding that a claim was time-barred because of the Plaintiffs’ failure diligently to investigate their claim, explaining:
The first cause of action for fraud should be dismissed as time-barred. This claim was not asserted within six years of its accrual in 2011, and we find that it was also not asserted within two years of the time when plaintiffs could with reasonable diligence have discovered it. Plaintiffs stopped receiving regular monthly distributions in November 2014 and stopped receiving financial statements in September 2015. Although they made repeated inquiries about these issues in 2015 and 2016, it is undisputed that the responses received were unsatisfactory. Further, plaintiffs’ receipt of information about Garg’s alleged malfeasance from a former business partner (Raza Khan) in April 2017 put plaintiffs on inquiry notice of its fraud claim.
Plaintiffs’ reliance on the doctrine of equitable estoppel to save their fraud claim is unavailing. Even if there was affirmative wrongdoing by Garg, it predated plaintiffs’ communication with Khan. That communication should have prompted further investigation.
(Internal citations omitted).