Johnson Gallagher LLC, New York (Peter J. Gallagher of
counsel), for appellants.
Garfinkel Margolis Bergson, LLP, New York (Barry G. Margolis
of counsel), for respondents.
Richter, J.P., Mazzarelli, Kahn, Moulton, JJ.
Supreme Court, New York County (Jeffrey K. Oing, J.), entered
July 16, 2015, which granted defendants' motion to
dismiss the complaint, unanimously modified, on the law, to
deny the motion as to the breach of contract claims to the
extent they allege breaches of continuing obligations that
accrued during the six years before the commencement of the
action, with appropriate credit for any applicable tolling
periods pursuant to the parties' agreements, and
otherwise affirmed, without costs. Appeal from order, same
court and Justice, entered December 16, 2016, which denied
plaintiffs' motion to renew certain parts of
defendants' motion, unanimously dismissed, without costs,
Patrick Moses and Kevin Kaufman, two of the three creators
and executive producers of the first season of the reality
television series The Real Housewives of Orange
County (the Series), and Ventana Ventures LLC, the
production company through which they provided these
services, seek to recover against defendant Scott Dunlop, the
third executive producer of the Series, related entities, and
defendant Bravo Media LLC, for monies allegedly owed them in
connection with the Series.
Co-Production Agreement (the CPA) dated January 23, 2005,
Dunlop of defendant Dunlop Group (DG) and Kaufman and Moses,
of nonparty Kaufman Films (KF), agreed to exclusively produce
the Series and share equally all fees, profits, and revenues
generated by the Series and any sequels or spin-offs. In the
spring of 2006, after meeting with Bravo, Dunlop allegedly
informed Moses and Kaufman that Bravo had terminated
Ventana's services as producer of the Series but retained
Dunlop as a "local fixer, " a limited role for
which Dunlop would receive a few thousand dollars at most.
Two senior executives at Bravo later confirmed to Moses that
Bravo had decided to replace Ventana with another production
company. Later that summer, Dunlop entered into a letter
agreement (the Dunlop Agreement), with defendant Realand
Productions LLC, an affiliate of Bravo, to serve as executive
producer for the Series, for which he would receive, inter
alia, a per-episode fee, an executive producer credit, and a
share of "Modified Adjusted Gross Receipts" from
the exploitation of the Series.
January 2007, Dunlop presented Moses and Kaufman each with a
settlement and release agreement. Under the terms of the
release, which only Kaufman signed, Kaufman and Moses were to
relinquish "any and all rights [they] may have had in
the Series" and "in Ventana, " in exchange
for, inter alia, $30, 000, and were to "release...
Dunlop... from any and all claims." In the release, the
parties acknowledged that they had been given the opportunity
to consult with counsel and entered into the agreement
"after independent investigation and in the absence of
fraud, duress, or undue influence." By Termination
Agreement and Release (the Termination Agreement) dated June
23, 2009, between Realand, Dunlop, and Ventana Ventures Inc.
(Ventana Inc.), a corporation organized during production of
the Series, the parties agreed, inter alia, to terminate the
Ventana Agreement, by which Bravo Company had retained
Ventana to produce the Series if Bravo ordered its
production, and the Dunlop Agreement.
fraud claims, to the extent they arise from conduct that
occurred in 2006, are time-barred (see CPLR 213).
Plaintiffs failed to establish that the fraud could not have
been discovered earlier (see CSAM Capital, Inc. v
Lauder, 67 A.D.3d 149, 156-157 [1st Dept 2009]). At the
very latest, they were on inquiry notice by January 2007,
when Dunlop presented Moses and Kaufman with the settlement
and release agreement - more than two years before the
commencement of this action (see CPLR 213;
Bezoza v Bezoza, 83 A.D.3d 578, 580 [1st Dept
2011]). Unlike the situation in CSAM Capital,
plaintiffs allowed years to go by without confronting Dunlop
or Bravo about any concerns they may have had in the face of
Dunlop's highly publicized continued involvement in the
Series, his participation in and receipt of credits for
spin-offs in other locations.
extent the fraud claims arise from Dunlop's entering into
the Termination Agreement, in 2009, the claims fail to state
a cause of action since plaintiffs could not have relied upon
an agreement that they were unaware of (see generally
Eurycleia Partners, LP v Seward & Kissel, LLP, 12
N.Y.3d 553, 559 ).
extent the breach of fiduciary duty claim arises from
Dunlop's entering into the Termination Agreement, it is
subject to a three-year, rather than a six-year, statute of
limitations, because the fraud allegations are incidental to
the claim, and only money damages are sought (see Kaufman
v Cohen, 307 A.D.2d 113, 119 [1st Dept 2003]). By the
time Dunlop entered into the Termination Agreement,
plaintiffs had not had a relationship with the Series for
years, and any alleged fraud had already occurred and was not
essential to the fiduciary duty claim.
complaint states causes of action for breaches of the CPA and
the Ventana Agreement, to the extent indicated above, because
the contracts impose continuing obligations, each of which
can be breached, triggering a new cause of action with its
own limitations period (see Makarchuk v Makarchuk,
59 A.D.3d 1094, 1095 [4th Dept 2009]; see also Jobim v
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