On July 8, 2022, Justice Borrok of the New York County Commercial Division issued a decision in Apollo Global Mgt., Inc v. Cernich, 2022 NY Slip Op. 32187(U), applying a six-year statute of limitations to a claim for aiding and abetting a breach of fiduciary duty because the aiding and abetting involved fraud, explaining:
A six-year statute oflimitations applies to the plaintiffs’ claims because they sound in fraud. The underlying conduct to which these defendants are alleged to have aided and abetted were found by the arbitrator to constitute fraud:
The elements of a common law fraud against Dang have been satisfied. Dang made misrepresentations to Apollo during the course of his employment. He made repeated and false certifications of his compliance with Apollo Code of Ethics. He also certified falsely that he had not engaged in any outside business activities. His extensive and time-consuming work for Caldera makes clear that his representations were false. This conduct was clearly deliberate. Given that Dang did not reveal the true facts, Apollo continued to employ him under false pretenses. As an entity that required annual certifications on these subjects Apollo reasonably relied on their truthfulness. The testimony of Apollo’s Chief Compliance Officer made clear the importance to Apollo of compliance with these requirements.In Tiny 1, Ltd. v Samfet Marble, Inc., the Appellate Division affirmed the trial court’s application of a six-year statute of limitations on the causes of action for breach of fiduciary duty and aiding and abetting breach of fiduciary duty because fraud was an essential element of the claims. Specifically, the plaintiffs in Tiny 1 alleged that the defendants schemed to fraudulently conceal wire transfers, increase debt, and deny access to books and records which had been falsified to force the sale of a company for far less than it was worth. These allegations almost mirror the allegations levelled in this case.
In this case, the fraud element of plaintiffs’ claims are not incidental to the plaintiffs’ aiding and abetting breach of fiduciary duty claims. Specifically, the defendants are alleged to have concealed Messrs. Siddiqui and Dang’ s involvement with Caldera by removing their electronic fingerprints from documents, lying about their involvement in Caldera, deleting emails and scrubbing desks presented to Caldera investors so that it appeared they were not taken directly from the plaintiffs. Stated differently, the fraud and fraudulent concealment is fundamental to the claim. Thus, a six-year statute of limitations applies. For the avoidance of doubt, the cases primarily relied upon by the defendants do not compel a different result because in those cases the fraud claims were either not viable (i.e., IDT Corp.) or incidental (i.e., Romanoff).
(Internal quotations and citations omitted).