The opinion of the court was delivered by: Scullin, District Judge.
MEMORANDUM-DECISION AND ORDER
Plaintiff Svenska Finans International BV files this complaint
as the successor in interest to Gewics Holding AG ("Gewics"). In
October 1989, Defendant Scolaro, Shulman, Cohen, Lawler &
Burstein, P.C. ("Scolaro, Shulman") filed a proof of claim on
behalf of Gewics in a bankruptcy case involving ICS Cybernetics,
Inc. ("ICS"). Scolaro, Shulman successfully recovered on that
claim. This lawsuit arises out of a dispute as to whether
Scolaro, Shulman — and in particular its two attorneys who
handled the Gewics matter, Defendants David A. Holstein and
William J. Leberman — properly disbursed the proceeds of the ICS
Federal jurisdiction is based upon diversity of citizenship.
Plaintiff's complaint alleges three state law causes of action:
(1) breach of contract; (2) breach of fiduciary duty; and (3)
conversion. Presently before the Court is a joint motion brought
by all of the Defendants, pursuant to Fed. R.Civ.P. 12(b)(6), to
dismiss Plaintiff's complaint on the grounds that each cause of
action is time barred under the applicable statutes of
The dates upon which the events at issue occurred are critical
to determining whether the statutes of limitations have expired.
For this reason, a short timeline of those events is provided, as
they are represented in Plaintiff's complaint.
On February 8, 1989, Gewics commenced liquidation. At this
time, because Gewics maintained its principal place of business
in Switzerland, Swiss law mandated that Gewics' former officers
ceased to have any authority to act on behalf of the company.
Only the liquidator had such authority. On October 25, 1989,
Defendants filed the proof of claim against ICS on behalf of
Gewics. In an order dated August 20, 1992, the Bankruptcy Court
for the Northern District of New York (Gerling, J.) allowed a
portion of the claim, in the amount of $750,000.
By letter dated and telecopied December 30, 1992, Christian
Monney of Progressia Management Ltd. informed Defendants that his
company was acting as liquidator for Gewics and asked for
information regarding the Gewics/ICS bankruptcy claim. Defendants
responded on January 13, 1993 by forwarding a copy of the ICS
disclosure statement and plan of reorganization. No specific
mention was made of the Bankruptcy Court's approval of the
$750,000 claim. On February 1, 1993, Defendant Leberman wrote to
Gert Wihlborg, a former officer of Gewics, to inform him of the
Bankruptcy Court's August 1992 order.
Mr. Monney sent another telecopy to Defendants dated February
8, 1993, in which he asked about a disputed claim of Gewics that
was listed in the ICS claims register. Mr. Monney asked whether
the claim was lost or could be recovered through legal action.
Defendant Leberman inquired of Mr. Wihlborg in a February 12,
1993 letter as to how much detail should be provided. Plaintiff's
complaint does not indicate whether Mr. Wihlborg answered this
request or whether Defendants provided a response to Mr. Monney's
On February 18, 1993, Defendant Leberman sent a fax to Mr.
Wihlborg to inform him that ICS would waive an appeal of the
Bankruptcy Court's decision and pay 43.19% of the claim within
two months for a $5,000 concession. Around March 19, 1993,
Defendants received a check from ICS for $340,975.00 as a partial
distribution on the claim. Mr. Wihlborg instructed Defendants to
wire the money (less attorneys' fees) to a Swiss bank account
with the remark "G. Wihlborg." Defendants did so on March 29,
1993. When Defendants received a second partial payment of
$111,900 on May 12, 1993, they again wired the money to the same
Swiss bank account per Mr. Wihlborg's directions.
Mr. Monney on June 3, 1993 telecopied a letter to Defendants
stating that Progressia had been informed of the allowance of
Gewics' claim against ICS for $750,000, and that Progressia knew
Defendants had received $340,975 of that amount and would receive
another payment soon. Mr. Monney expressed surprise that
Defendants had not provided this information, and reminded
Defendants that only Progressia, as liquidators, had authority to
act on Gewics' behalf.
On July 14, 1993, Seestatt telecopied letters to Defendants and
ICS to inform them that Seestatt had been appointed as substitute
liquidators of Gewics. Defendant Leberman acknowledged receipt of
this letter on July 16, 1993. ICS's counsel wrote to Seestatt on
July 19, 1993 to explain that further payments under the claim
would still be forwarded to Defendants. ICS sent a copy of this
letter to Defendant Leberman.
Gewics was placed under bankruptcy administration in
Switzerland on February 2, 1995. On June 29, 1995, Defendants
received the final payment of $78,572.25 on the ICS claim.
Whereas the previous two checks were made out to the Scolaro,
Shulman law firm, this last check was payable to Gewics.
Defendant Holstein endorsed the check on Gewics' behalf.
Defendant Holstein wrote Mr. Wihlborg on August 1 and September
7, 1995 for instructions on where to deposit the money. On
September 14, 1995, Defendants received a letter from Guus Mineur
on behalf of Victum Holdings BV. Mr. Mineur claimed that Victum
Holdings BV was the assignee of the ICS claim from Gewics as of
January 12, 1989, and ...