John J.D. McFerrin–Clancy, New York, for appellants.
Orrick, Herrington & Sutcliffe LLP, New York (J. Peter Coll of counsel), for respondent.
Richter, J.P., Manzanet–Daniels, Andrias, Kern, Singh, JJ.
Order, Supreme Court, New York County (Saliann Scarpulla, J.), entered June 17, 2016, which granted defendant's motion to dismiss the complaint, unanimously modified, on the law, to deny the motion as to the first cause of action (actual fraud), and otherwise affirmed, without costs.
The court properly dismissed the second cause of action (constructive fraud) as time-barred. "[T]he two-year discovery provision [of CPLR 213(8) ] ... does not apply to constructive fraud" ( Monaco v. New York Univ. Med. Ctr., 213 A.D.2d 167, 168, 623 N.Y.S.2d 566 [1st Dept. 1995], lv dismissed in part and denied in part 86 N.Y.2d 882, 635 N.Y.S.2d 944, 659 N.E.2d 767 [1995] ). The alleged fraud occurred, at the latest, on January 22, 2004, but plaintiffs did not sue until July 13, 2015.defendant), Derivium's fraud was not common knowledge.
It is true that plaintiffs sued Derivium's clearing broker-dealers in March 2010 (see Berman v. Morgan Keegan & Co., 2011 WL 1002683, 2011 U.S. Dist LEXIS 27867 [S.D.N.Y., March 14, 2011, No. 10 Civ. 6866(PKC) ], affd 455 Fed.Appx. 92 [2d Cir.2012] ). However, plaintiffs would have had far more reason to suspect Derivium's brokers than their own attorneys. Plaintiffs were entitled to place "ultimate trust and confidence" in defendant, who represented them ( Johnson v. Proskauer Rose LLP, 129 A.D.3d 59, 72, 9 N.Y.S.3d 201 [1st Dept. 2015] [internal quotation marks omitted] ).
Contrary to defendant's contention, the actual fraud claim is not a malpractice claim in disguise (see id. at 68–69, 9 N.Y.S.3d 201 ).
The complaint adequately alleges scienter (see Houbigant, Inc. v. Deloitte & Touche, 303 A.D.2d 92, 98, 753 N.Y.S.2d 493 [1st Dept. 2003] ).