On July 16, 2025, the Second Department issued a decision in Angel v. Strulovich, 2025 NY Slip Op. 04150, holding that the limitations period for a claim for a constructive trust based on conversion is three years, explaining:
To dismiss a cause of action pursuant to CPLR 3211(a)(5) on the ground that it is barred by the statute of limitations, a defendant bears the initial burden of establishing that the time in which to sue has expired. The burden then shifts to the nonmoving party to raise a question of fact as to the applicability of an exception to the statute of limitations, as to whether the statute of limitations was tolled, or as to whether the action was actually commenced within the applicable limitations period. Generally, a cause of action to impose a constructive trust is governed by a six-year statute of limitations, which begins to run at the time of the wrongful act giving rise to a duty of restitution, regardless of when it was discovered. However, a shorter, three-year statute of limitations governing conversion claims applies when the cause of action for the imposition of constructive trust sounds in conversion and legal remedies will afford the plaintiffs full and complete relief. A determination of when the wrongful act triggering the running of the Statute of Limitations occurs depends upon whether the constructive trustee acquired the property wrongfully, in which case the property would be held adversely from the date of acquisition, or whether the constructive trustee wrongfully withholds property acquired lawfully from the beneficiary, in which case the property would be held adversely from the date the trustee breaches or repudiates the agreement to transfer the property. In applying the Statute of Limitations, courts must look to the essence of the claim, and not to the form in which it is pleaded.
Here, the Supreme Court properly determined that the constructive trust causes of action with respect to the recent properties are time-barred under the three-year conversion statute of limitations. The plaintiffs do not dispute that their constructive trust causes of action sound in conversion. Moreover, as the plaintiffs seek to recover economic loss, including the loss of future profits from the appreciation or development of certain properties, and not any unique real property loss, legal remedies would afford them complete relief. Whether the plaintiff can recover all of their alleged damages is not a relevant factor.
The Supreme Court also properly determined that the statute of limitations accrued when Yechezkel Strulovich failed to infuse the plaintiffs’ investment funds into certain feeder LLCs, which he admittedly created for the express purpose of being the repository of those funds. Based on the record, the alleged wrongful withholding, which gave rise to a duty of restitution, fell outside the applicable three-year statute of limitations. Accordingly, the court properly adhered to the prior determination in the July 1, 2020 order granting those branches of the moving defendants’ separate motions which were to dismiss the causes of action seeking to impose constructive trusts on the recent properties insofar as asserted against each of them as time-barred.
(Internal quotations and citations omitted).