In this proceeding the petitioner, a son of the decedent, seeks, inter alia, a declaration that the conveyance of a 50% interest in a two-family home from the decedent's cousin, a non-party, to the decedent's surviving spouse is null and void. Specifically, the petitioner contends that although the decedent was the record owner of only a 50% interest in the realty, the decedent was actually the sole owner. The decedent's wife, who is the administrator of the estate, objects to the relief requested.

The conveyance at issue was made on June 22, 1987, the day after the decedent's death. Although the petition sets forth various theories as to why the deed should be voided, the parties agreed on the record in open court that the portion of the objections alleging that the causes of action based upon fraud are time-barred under the applicable statute of limitations (see CPLR 213 [8]) would be treated as a motion to dismiss by the spouse (see CPLR 3211 [a] [5]). Accordingly, the petitioner's other theories for voiding the deed, including that the property was either the subject of a constructive or resulting trust will not be discussed.

The decedent died intestate on June 21, 1987. His distributees are the surviving spouse, the petitioner and five other children who defaulted in this proceeding. After he was divorced from his first wife, but before he married the surviving spouse, by a deed dated November 25,1974 the realty was conveyed to the decedent and his cousin as tenants in common. The June 22, 1987 deed transferring the cousin's interest in the realty to the surviving spouse indicates that the transfer was for $10 consideration. It is undisputed that the other half of the realty is an estate asset. The spouse filed her petition for letters of administration on August 23, 2006 and letters [*2]issued to her on December 7, 2006. The petitioner alleges: (1) the cousin co-signed the mortgage note as an accommodation because the decedent did not have sufficient credit; (2) the cousin never paid any money toward the purchase or upkeep of the realty; and, (3) although the decedent resided at the realty, the cousin never resided there.

The spouse argues that, assuming arguendo, there was a fraud, any such claim is barred under CPLR 213 [8] because the six-year period clearly expired as the deed from the cousin to her was recorded in July, 1987 and the petitioner did not file his petition to set aside the deed until June 2, 2011. She also asserts that the petitioner failed to commence this proceeding until well after two years from the date he could have discovered the alleged fraud with reasonable diligence . Specifically, the spouse, relying upon Oggioni v Oggioni (46 AD3d 646 [2007]), contends that when the petitioner received notice of the spouse's application for letters of administration which was mailed to him on August 23, 2006, he could have obtained a copy of the spouse's administration petition, which indicated that the decedent held only a 50% interest in the realty, and with this information he could have discovered the alleged fraud with reasonable diligence. The spouse concludes that as the petitioner did not assert his fraud claim until almost five years after August 2006, the claim is time-barred.

An action based upon fraud must be commenced within six years from the date the cause of action accrued or two years from the date the plaintiff discovered the fraud, or with reasonable diligence could have discovered it (see CPLR 213 [8]). Here, any cause of action for fraud accrued in 1987 when the realty was conveyed by the cousin to the spouse, and as the petition in this proceeding was not filed until 2011, it is clear that the proceeding was not commenced within six years from the date the fraud cause of action accrued. Nonetheless, there remains the question of whether the petitioner "could with reasonable diligence have discovered" the fraud two years prior to June 2, 2011, the date he commenced his proceeding (CPLR 213 [8]).

In Oggioni v Oggioni (46 AD3d at 646) the decedent conveyed realty to his two daughters on May 8,1997 and he died in 1998. The daughters commenced a probate proceeding and on January 24, 2001 they served upon the decedent's son their probate petition in which they stated that the decedent died without owning any real property. On November 6, 2003 the son commenced an action to set aside the 1997 deed. The court stated the "cause of action to set aside the deed on the ground of fraud was time-barred because the plaintiff possessed knowledge of facts from which fraud could reasonably have been inferred when he was served with the probate petition indicating that his father owned no real property at the time of his death" (id., at 648).

Here, the decedent's son was served only with notice of the administration proceeding and he was not served with a copy of the underlying administration petition prior to the time he commenced this proceeding. The obvious reasons that a petitioner seeking letters of administration is required under SCPA 1005 to serve notice of the application upon all of the distributees are: (1) so that the distributees are made aware of the application; and (2) to advise the distributees that they might be entitled to an intestate share upon the completion of the administration of the estate. There is no requirement that the administration petition accompany the notice of application for letters and there is no reason for any child-distributee upon receipt of the notice of the application to either question why a surviving spouse is seeking to be appointed as the administrator or to be concerned about the assets listed in the administration petition. This [*3]is so because a surviving spouse has priority to be appointed as the administrator (see SCPA 1001 [1] [a]) and the child-distributee retains the right to seek a compulsory accounting in the future in the event that he or she is concerned that the administrator has not accounted for all of the assets of the estate (see SCPA 2205 and 2206).

Accordingly, the court finds that the instant case is distinguishable from Oggioni v Oggioni (46 AD3d at 646), and that the petitioner could not have discovered the alleged fraudulent conveyance with reasonable diligence merely because he was served with a notice of an application for letters of administration. Moreover, Oggioni is of limited value as a precedent for several reasons, including: (1) the statements therein with regard to the conveyance are dicta, as the son had withdrawn his objections to probate prior to the court's determination and, as he was not a beneficiary under the will, the son had no standing to object to the alleged fraudulent conveyance; (2) it was fortuitous that the daughters also served a copy of their probate petition upon the son as they were required to serve only a citation and a copy of the will upon the son; and, (3) the court did not elaborate upon why the son, upon receiving the probate petition stating that the decedent did not own any realty when he died, should have suspected that the realty was transferred to the daughters without consideration at a time when the decedent was incompetent. It can also be argued that Oggioni overlooks the fact that a fiduciary of an estate or trust has the duty to collect on behalf of the estate all of the assets to which it is entitled, including those in his or her possession, and even if such an asset is not listed in the petition seeking the appointment of the fiduciary, the fiduciary can be held accountable for the asset until six years after the fiduciary openly repudiates his or her fiduciary responsibilities (see Matter of Barabash, 31 NY2d 76, 81 [1972] reh'g denied 31 NY2d 963 [1972]).

At or about the time that the motion to dismiss was submitted there was also an issue with regard to whether the petitioner should be permitted to take the testimony of the cousin by open commission. That issue appears to have been rendered academic as the petitioner now indicates that he seeks only a deposition on written questions. The petitioner clearly has the right to take the deposition of the cousin by written questions as she resides without this state (see CPLR 3108). In the event the son finds it necessary or convenient, he may submit an order on notice for an open commission or letters rogatory for the taking of the cousin's deposition (see CPLR 3108).

Accordingly, for the reasons stated herein this decision constitutes the order of the court denying the motion to dismiss the causes of action based on fraud as time-barred by CPLR 213 (8). This proceeding will appear on the court's ready for trial calendar upon compliance with Uniform Rules for Surrogate's Court (22 NYCRR) §§ 207.29 and 207.30. The Chief Clerk is directed to mail a copy of this decision and order to all counsel.

Proceed accordingly.



SURROGATE