This action was commenced on May 31, 2013 by the State of New York Workers' Compensation Board ("WCB") in its capacities as the governmental entity charged with the administration of the Workers' Compensation Law and as successor to the OHI Workers' Compensation Trust ("Trust"). Pending before the Court are five motions and cross-motions to dismiss made pursuant to CPLR 3211.

As alleged in the WCB's 119-page complaint ("Complaint"), the Trust is a group self-insured trust ("GSIT") formed pursuant to Workers' Compensation Law ("WCL") § 50 (3-a). Members of the Trust were employers in petroleum, propane, gasoline and related industries that conducted business in New York State and were required to provide workers' compensation insurance to their employees.

The Trust was formed on or about October 21, 1997 and began operations on January 1, 1998. Following several reviews by the WCB identifying the Trust as underfunded and the [*2]execution of several consent decrees, the Trust ceased offering workers' compensation insurance effective December 31, 2009. On July 1, 2011, the WCB assumed administration of the Trust and allegedly became its successor. A forensic analysis commissioned by the WCB shows an accumulated deficit of approximately $8.27 million as of July 11, 2012.

At all times prior to the WCB takeover, defendant Cody Management, Inc. ("Cody") served as the Trust's third party administrator.^[FN1] During this period, Cody retained defendant Fuller & LaFiura CPA's, P.C. ("Fuller & LaFiura") to provide auditing and accounting services to the Trust, defendant Milliman, Inc. ("Milliman") to provide actuarial services and Claims Services, Inc. ("CSI") to provide claims administration and risk management services.^[FN2] Defendants Ottman, Persico, Hart, Hastings, Alonzo and Eldredge are alleged to have served as trustees of the Trust at pertinent times.

Separate pre-answer motions to dismiss the complaint have been filed by the following defendants: (1) Fuller & LaFiura; (2) Persico, Hart and Eldredge; and (3) Hastings. In addition, the WCB moves to dismiss the counterclaim and certain affirmative defenses alleged in Alonzo's answer, and Alonzo cross-moves in response for the dismissal of certain claims as failing to state a cause of action.

On a motion to dismiss made pursuant to CPLR 3211 (a) (7), "the Court must afford the pleadings a liberal construction, take the allegations of the complaint as true and provide plaintiff the benefit of every possible inference" (EBC 1, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005]). The Court's "sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail" (Polonetsky v Better Homes Depot, Inc., 97 NY2d 46, 54 [2001] [internal quotations omitted]). However, the Court need not "accept as true legal conclusions or factual allegations that are either inherently incredible or flatly contradicted by documentary evidence" (1455 Washington Ave. Assoc. v Rose & Kiernan, 260 AD2d 770, 771 [3d Dept 1999] [internal citations omitted]).

Dismissal is warranted under CPLR 3211 (a) (5) where the movant establishes that a cause of action may not be maintained due to the expiration of the statute of limitations. The movant bears the initial burden of supporting the motion with "an affidavit or other competent proof sufficient, if uncontroverted, to establish the [statute of limitations] defense as a matter of law" (Matter of Dean v Bradford, 158 AD2d 771, 771 [3d Dept 1990]; accord Romanelli v DiSilvio, 76 AD3d 553, 554 [2d Dept 2010]). Upon such a showing, "the burden shifts to the party opposing the motion to aver evidentiary facts" sufficient to defeat the statute of limitations defense or at least raise factual questions concerning the defense (Hoosac Val. Farmers Exch. v AG Assets, 168 AD2d 822, 823 [3d Dept 1990]; see Doyon v Bascom, 38 AD2d 645 [3d Dept 1971]).

Fuller & LaFiura is a certified public accounting ("CPA") firm that was retained to provide accounting and auditing services to the Trust. WCB regulations require GSITs to annually submit "audited financial statements prepared in accordance with GAAP, for the preceding fiscal year, certified by an independent certified public accountant" (12 NYCRR § 317.19 [a] [2]). Fuller & LaFiura prepared audited financial statements for fiscal years 1998 through 2010. The Complaint further alleges that Fuller & LaFiura provided routine accounting services for the Trust, including reviewing and recording monthly transactions and investment statements in a general ledger and preparing reconciliations.

The Complaint alleges numerous deficiencies in the auditing services provided by Fuller & LaFiura, including lack of compliance with relevant professional standards and lack of independence. In addition, it is alleged that Fuller & LaFiura knowingly and intentionally manipulated the financial statements it prepared for the purpose of concealing the Trust's true financial condition. The Complaint also alleges that Fuller & LaFiura allowed its audit approach to be influenced by other considerations, including its desire to continue collecting auditing fees. Thus, the WCB alleges that Fuller & LaFiura knowingly manipulated its audit reports, intentionally misstated the Trust's financial condition, knowingly participated in and facilitated Cody's submission of inaccurate financial statements and failed to implement proper audit procedures — all of which allegedly caused or contributed to the substantial accumulated deficit of the Trust.

Nine causes of action are asserted against Fuller & LaFiura: (1) breach of its contractual obligations to the Trust (3rd Cause of Action); (2) breach of the implied covenant of good faith and fair dealing (7th Cause of Action); (3) breach of fiduciary duty (10th Cause of Action); (4) aiding and abetting breach of fiduciary duty (14th Cause of Action); (5) fraud (19th Cause of Action); (6) aiding and abetting fraud (23rd Cause of Action); (7) unjust enrichment (26th Cause of Action); (8) professional negligence (32nd Cause of Action); and (9) common law indemnification (39th Cause of Action).

Fuller & LaFiura moves to dismiss the causes of action for breach of fiduciary duty, fraud, common law indemnity, breach of the duty of good faith and fair dealing and unjust enrichment for failure to state a claim. In addition, Fuller & LaFiura maintains that the three-year limitations period established by CPLR 214 (6) compels the dismissal of so much of plaintiff's claims as arise out of the professional services provided prior to May 31, 2010.

Settled principles of New York law hold that the duties owed by an accountant to a client generally are not fiduciary in nature (Bitter v Renzo, 101 AD3d 465 [1st Dept 2012], aff'g 39 Misc 3d 1208 [A] [Sup Ct, New York County]; Able Energy, Inc. v Marcum & Kliegman LLP, 69 AD3d 443, 444 [1st Dept 2010]; Friedman v Anderson, 23 AD3d 163, 166 [1st Dept 2005]; DG Liquidation, Inc. v Anchin, Block & Anchin,, 300 AD2d 70, 70-71 [1st Dept 2002]; see also New York State Workers'Compensation Bd. v. SGRisk, LLC, 38 Misc 3d 1229 [A] [Sup Ct, Albany County 2013], aff'd in pertinent part 116 AD3d 1148 [3d Dept 2014]).

While there are limited circumstances in which an accountant may be found to owe fiduciary duties to a client, there is nothing in the Complaint or the WCB's filings in opposition [*4]to the motion that provide a legal basis for concluding that this is such a case (cf. Lavin v Kaufman, Greenhut, Lebowitz & Forman, 226 AD2d 107, 109 [1st Dept 1996] [discretionary investment authority]; Kanev v Turk, 187 AD2d 395, 395 [1st Dept 1992] [advice regarding the making of an unsecured loan]). The fact that a client reposes trust and confidence in its accountant to provide accurate and timely information regarding accounting matters does not transform a conventional professional relationship into a fiduciary one (see e.g. Bitter, 39 Misc 3d 1208). Moreover, the allegations of misconduct directed against Fuller & LaFiura focus almost exclusively on its audit function, a role that plainly is inconsistent with the existence of a fiduciary relationship. Accordingly, the cause of action for breach of fiduciary duty is dismissed against Fuller & LaFiura for failure to state a claim.

Fuller & LaFiura seek dismissal of the fraud claim on the ground that it is unsupported by specific and detailed factual allegations of a non-conclusory nature. A cause of action for fraud requires plaintiff to allege a misrepresentation or concealment of a material fact, falsity, scienter, justifiable reliance on the deception, and resulting injury (Lusins v Cohen, 49 AD3d 1015, 1017 [3d Dept 2008]). The circumstances constituting the fraud must be stated in detail (CPLR 3016 [b]).

The Complaint alleges, in essence, that Fuller & LaFiura continually and knowingly concealed the true financial condition of the Trust by providing inaccurate and/or misleading information relative to the Trust's assets and liabilities and by failing to state the Trust's true financial condition in its annual audits. Plaintiff further alleges that the Trust and its members relied upon these intentional misrepresentations and sustained damages as a result.

"These allegations are specific enough to satisfy the pleading requirement of CPLR 3016 (b), which is intended to inform a defendant with respect to the incidents complained of'" (SGRisk, 116 AD3d at 1154, quoting Pludeman v Northern Leasing Sys., Inc., 10 NY3d 486, 491[2008]). The fact that the vast majority of the factual allegations against Fuller & LaFiura

Fuller & LaFiura contends that the complaint fails to state a cause of action for implied indemnity. The Court agrees, for substantially the reasons stated in State of NY Workers' Compensation Bd. v. Madden (119 AD3d 1022, 1023-1024 [3d Dept 2014], aff'g in pertinent part 38 Misc 3d 1229 [A] [Sup Ct, Albany County 2013]). In brief, to the extent that the WCB sues as successor-in-interest to the Trust, it has failed to allege that the Trust and its accountant shared common duties to third parties that were discharged by the Trust, but should have been discharged by the accountant. "Instead, the gravamen of the claim is that defendants breached . . . duties that were owed, not to third parties, but to the Trust — and, by extension, to plaintiff. Thus, plaintiff's claims against defendants arising from its role as successor in interest are direct, and do not sound in common-law indemnification" (id. at 1024 [internal citations omitted]). Insofar as the WCB sues in its governmental capacity, the complaint fails to allege the accountant [*5]had duties "in common with [the WCB's] statutory obligation to maintain the Trust's solvency; instead, the complaint alleges that [Fuller & LaFiura] owed duties to the Trust to provide professional auditing [and] accounting . . . services" (id.).

The ninth cause of action alleges that Fuller & LaFiura breached an express or implied contractual promise to deal with the Trust fairly and in good faith by failing to properly perform the auditing and accounting services and by intentionally misrepresenting and/or concealing the Trust's true financial condition. This claim arises from the same operative facts as the breach of contract claim and demands the same measure of damages. Accordingly, this cause of action is dismissed as redundant, and the allegations of breach of the duty of good faith and fair dealing shall be deemed incorporated into the third cause of action for breach of contract (see Mill Fin., LLC v Gillett, 122 AD3d 98 [1st Dept 2014]; Amcan Holdings, Inc. v Canadian Imperial Bank of Commerce, 70 AD3d 423, 426 [1st Dept 2010]; Logan Advisors, LLC v Patriarch Partners, LLC, 63 AD3d 440, 443 [1st Dept 2009]).

Fuller & LaFiura argues that the cause of action for unjust enrichment must be dismissed due to the existence of a valid and enforceable contract. As there does not appear to be any dispute as to the existence of a binding and enforceable contractual arrangement by which the accounting firm rendered services on behalf of the Trust, the cause of action seeking recovery in quasi-contract must be dismissed (Kosowsky v Willard Mtn., Inc., 90 AD3d 1127, 1128 [3d Dept 2011]), and the allegations of plaintiff's complaint appearing under the rubric of unjust enrichment shall be deemed to be part of its claim for express breach of contract (Polonetsky, 97 NY2d at 54).

The second branch of Fuller & LaFiura's motion argues that the remaining causes of action represent a claim of professional malpractice that is untimely as to professional services rendered prior to May 31, 2010, three years prior to the date of commencement. "A cause of action charging that [an accounting] professional failed to perform services with due care and in accordance with the recognized and accepted practices of the profession is governed by the three-year Statute of Limitations applicable to negligence actions" (Ackerman v Price Waterhouse, 84 NY2d 535, 541 [1994]; see CPLR 214 [6]).

With respect to the claim for breach of contract, the three-year statute of limitations of CPLR 214 (6) applies to claims that "arise out of the accounting services provided by the defendant pursuant to a contract . . . , and out of the accountant-client relationship which resulted therefrom" (Harris v Kahn, Hoffman, Nonenmacher, & Hochman, LLP, 59 AD3d 390, 391 [2d Dept 2009]; see Matter of R.M. Kliment & Frances Halsband, Architects [McKinsey & Co. Inc.], 3 NY3d 538, 542 [2004]). This is true even where the claimed breach of contract is based upon an express contractual promise, so long as the promise is of the sort that the professional would be expected to accomplish using due care even in the absence of a specific contractual provision (Kliment, 3 NY3d at 542; see Winegrad v Jacobs, 171 AD2d 525, 525 [1st Dept 1991]).

For the most part, the breach of contract claim is founded upon allegations that Fuller & [*6]LaFiura negligently and improperly performed accounting services by failing to follow or consistently apply relevant professional standards and by failing to exercise reasonable diligence in identifying improper accounting methods employed by others. As these allegations arise directly out of the contractual accountant-client relationship, they are governed by CPLR 214 (6) (SGRisk, 116 AD3d at 1150).

However, liberally construed, plaintiff's complaint also claims intentional misconduct by Fuller & LaFiura, including allegations that the accounting firm knowingly and intentionally employed improper and misleading accounting methods for the purpose of disguising or concealing the true financial condition of the Trust. In light of the Third Department's recent decision in a substantially similar case holding that allegations of this sort "are not in essence a malpractice claim", which "does not generally encompass intentional acts", the WCB's allegations of intentional misconduct are governed by the six-year limitations period of CPLR 213 (2) (id. at 1151).

The WCB's claim of fraud is predicated upon allegations that Fuller & LaFiura knowingly and intentionally participated in a scheme to defraud by using inappropriate and improper accounting practices to misrepresent and conceal the true financial condition of the Trust. The Complaint challenges as fraudulent Fuller & LaFiura's representations to the Trust and the WCB that it would accurately identify and disclose any changes in the Trust's financial status, including the danger of incurring operating deficits, and any improper accounting practices that did not conform to relevant accounting standards.

A cause of action for fraud cannot be used to challenge the substance of the audits and the other accounting actions (or inactions) of Fuller & LaFiura with respect to its professional duty to render accounting services with due care and in accordance with applicable standards. However, plaintiff's claim that Fuller & LaFiura became a knowing participant in an intentional scheme to defraud the Trust and its members by misrepresenting the financial condition of the Trust is not based upon mere accounting errors, disagreements concerning the exercise of professional judgment or a failure to disclose any such errors; rather "defendants [also] are alleged to have perpetrated [an intentional] fraud on plaintiff from the time they were retained to provide accounting services" (Mitschele v Schultz, 36 AD3d 249, 254 [1st Dept 2006]; see also Serio v PricewaterhouseCoopers LLP, 9 AD3d 330, 331 [1st Dept 2004]; Balta v Ayco Co., LP, 626 F Supp 2d 347, 358 [WDNY 2009]; Malmsteen v Berdon, LLP, 477 F Supp 2d 655, 662-663 [SDNY 2007]).

"Since plaintiff's fraud cause of action is not merely a malpractice claim with a claim for concealment of malpractice superimposed on it, the parallel nature of the damages is not determinative of whether the fraud claim is governed by [CPLR 214 (6)]" (Mitschele, 36 AD3d at 255). And since such a claim is not premised solely upon a failure to exercise due care or errors in professional judgment, but is also predicated on allegations of the commission of an intentional tort, application of the fraud statute of limitations does not run afoul of the Legislature's intent in adopting CPLR 214 (6) (id.).

Accordingly, the cause of action for fraud is not governed by CPLR 214 (6) insofar as it is predicated upon allegations that Fuller & LaFiura "knowingly participated in an intentional scheme to defraud the Trust and its members by misrepresenting its financial condition" [*7](Madden, 119 AD3d at 1027; see SGRisk,116 AD3d at 1150).

The causes of action for aiding and abetting breaches of fiduciary duty and aiding and abetting fraud are governed by CPLR 214 (6) to the same extent as causes of action alleging breach of fiduciary duty and fraud against the accountant. And plaintiff's thirty-second cause of action for professional negligence plainly is governed by CPLR 214 (6).

In response to the motion to dismiss, the WCB seeks to invoke the doctrine of continuous representation so as to toll the statute of limitations until Fuller & LaFiura's delivery of its final audit report to the Trust on May 4, 2011.

The continuous representation doctrine "recognizes that a person seeking professional assistance has a right to repose confidence in the professional's ability and good faith, and realistically cannot be expected to question and assess the techniques employed or the manner in which the services are rendered" (Williamson v PricewaterhouseCoopers LLP, 9 NY3d 1, 9 [2007], quoting Shumsky v Eisenstein, 96 NY2d 164, 167 [2001], quoting Greene v Greene, 56 NY2d 86, 94 [1982] [internal quotation marks omitted]). Thus, the statute of limitations is tolled in cases of professional malpractice "where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim" (McCoy v Feinman, 99 NY2d 295, 306 [2002]; see Williamson, 9 NY3d at 10-11; Greene, 56 NY2d at 95).

In Williamson, the Court of Appeals applied the foregoing principles to an action alleging audit malpractice against an accountant. In concluding that the continuous representation doctrine was not available to toll the statute of limitations, the Court explained:

Each annual audit was a separate and discrete function, and there are no allegations that Fuller & LaFiura undertook, or was obliged to undertake, remedial or additional work with respect to completed audits from prior years. Accordingly, there was no "mutual understanding of the need for further representation on the specific subject matter underlying [this aspect of the] malpractice claim" (Rodeo Family Enterprises, LLC v Matte, 99 AD3d 781, 784 [2d Dept 2012], quoting McCoy v Feinman, 99 NY2d at 306; Apple Bank for Sav. v PricewaterhouseCoopers LLP, 70 AD3d 438 [1st Dept 2010] ["Although defendant audited plaintiff's year-end financial statements, prepared its tax returns and provided ad hoc tax advice to plaintiff, it never had any express, mutual agreement to advise plaintiff on the effect of the stock buy back, after the original advice"]; Mitschele, 36 AD3d at 253).

Based on the foregoing, the WCB has failed to establish the applicability of the continuous representation doctrine with respect to its challenge to annual financial audits performed by Fuller & LaFiura.^[FN3]

Finally, the Court rejects the WCB's invocation of the doctrine of equitable estoppel.

Defendants Ottman, Persico, Hart, Eldredge, Hastings, and Alonzo are sued as former trustees of the Trust. Nine causes of action are alleged against them: (1) breach of the Trust Agreement (2nd Cause of Action); (2) breach of the implied covenant of good faith and fair dealing (6th Cause of Action); (3) breach of fiduciary duty (9th Cause of Action); (4) aiding and abetting breach of fiduciary duty (13th Cause of Action); (5) fraud (17th Cause of Action); (6) aiding and abetting fraud (21st Cause of Action); (7) negligence (28th Cause of Action); (8) gross negligence (30th Cause of Action); and (9) common law indemnification (39th Cause of Action). Trustees Persico, Hart and Eldridge move to dismiss the claims for failure to state a cause of action and as barred, at least in part, by the statute of limitations. Trustees Hastings

The WCB alleges that the Trustees assumed broad contractual duties with respect to the management and oversight of the Trust, including: acceptance of applications for membership; fixing contribution rates, administrative costs and assessments; administration and management of the Trust; adoption and issuance of rules, regulations, policies and procedures in connection with the payment of workers' compensation and employer liability claims and losses incurred by members; purchase of insurance or reinsurance, surety bonds, directors and officers liability insurance and other reasonable and prudent insurances; and determination of the financial security, if any, required from Trust members (Complaint ¶ 238). The Complaint alleges that the Trustees breached these contractual obligations by, inter alia: failing to adequately capitalize the Trust; setting inadequate claims reserves; allowing the use of improper accounting methods; setting inappropriate discount and contribution rates; engaging in inadequate underwriting practices; and admitting new members with poor loss histories (Complaint ¶¶ 239-282). These alleged breaches are said to have caused the Trust's substantial accumulated deficit.

In arguing for dismissal of the cause of action, the Trustees contend that plaintiff's allegations of breach of contract, which they characterize as vague and conclusory, fail to identify the particular provisions of the Trust Agreement that allegedly were breached or particularize the damages caused by any such breaches. The Court does not find this argument availing. The Complaint pleads the existence of an enforceable contract between the Trust and the Trustees (the Trust Agreement), the Trustees' breaches of the Trust Agreement, the Trust's performance of its contractual obligations and resulting damages. No more is required (see Clearmont Prop., LLC v Eisner, 58 AD3d 1052, 1055 [3d Dept 2009]). Further, the Complaint sufficiently delineates the Trustees' alleged breaches of the Trust Agreement, and the Trustees have not conclusively demonstrated that the alleged breaches fall outside the scope of their contractual obligations to the Trust or the duty of good faith and fair dealing implicit therein.^[FN5] Nor have the Trustees established that no part of the damages claimed by the WCB flow from their alleged persistent breaches.

The Trustees also contend that the cause of action is time barred, at least in part. The statute of limitations for a breach of contract claim is six years (CPLR 213 [2]). "[A] breach of contract cause of action accrues at the time of the breach", even in cases where damages from the breach are not sustained until later and the "injured party may be ignorant of the existence of the wrong or injury" (Ely-Cruikshank Co. v Bank of Montreal, 81 NY2d 399, 403 [1993] [internal quotation marks omitted]; see CPLR 203 [a]). Where, as here, "a contract provides for continuing performance over a period of time, each breach may begin the running of the statute [*10]anew such that accrual occurs continuously and plaintiffs may assert claims for damages occurring up to six years prior to filing of the suit" (Airco Alloys Div. v Niagara Mohawk Power Corp., 76 AD2d 68, 80 [4th Dept 1980]). However, "so much of the causes of action asserted by [plaintiff] as accrued more than six years prior to the commencement of the instant action must be dismissed as time-barred" (Westchester County Correction Officers Benevolent Assn., Inc. v County of Westchester, 65 AD3d 1226, 1228 [2d Dept 2009]).

Accordingly, the WCB may sue the Trustees on a contractual theory for any breaches on and after May 31, 2007, six years prior to the commencement of this action. While the Trustees may well be correct that "most" of the alleged breaches occurred prior to this date, their failure to conclusively establish that all of the alleged breaches occurred outside the statutory period compels the denial of this branch of their motions.

The Trustees seeks dismissal of the fraud claim for failure to state a claim. The Complaint alleges that "the Trustees knowingly, and in concert with the Cody Defendants and Fuller & LaFiura, engaged in improper accounting practices and setting of claims reserves to artificially bolster [the Trust's] equity ratio" (Complaint ¶ 492). It is further alleged that "the Trustees knowingly, and in concert with the Cody Defendants, redacted or omitted sections of the 2003 through 2010 Trustee meeting minutes provided to the WCB to conceal potentially negative information from the members of [the Trust] and the WCB with regard to inappropriate conduct of the Trustees, the Cody Defendants, the CSI Defendants, and Fuller & LaFiura in the administration of [the Trust" (¶ 495). The Complaint further alleges that the Trust (and others) justifiably relied upon the alleged misrepresentations and concealments of this material information and sustained injury as a result thereof.

The foregoing allegations, liberally construed and read in light of the Complaint's detailed supporting allegations (see e.g. ¶¶ 251-260, 280-282), suffice to state a claim for fraud. Taken as a whole, the Complaint alleges the Trustees were knowing participants in a continuing scheme to fraudulently conceal the Trust's true financial condition by purposely causing improper accounting methods to be employed, thereby misrepresenting or concealing the Trust's true financial condition. Contrary to the Trustees' contention, the misconduct alleged against them goes well beyond mere passive acceptance of the financial statements prepared by the Trust's professional advisers, and they have not established as a matter of law that the alleged misconduct falls short of alleging an actionable misrepresentation or concealment that was detrimentally relied upon by the Trust. The Complaint further alleges that the Trustees fraudulently concealed the true financial condition of the Trust by causing the minutes of meetings at which adverse financial information was discussed to be redacted or concealed.

Accepting the truth of these allegations and giving plaintiff the benefit of all reasonable inferences at this early stage, the Complaint alleges and sufficiently particularizes a plausible scheme to fraudulently misrepresent and/or conceal material information regarding the finances and management of the Trust so as to state a claim.^[FN6]

The Trustees also contend that the fraud claim is barred by the statute of limitations, at least in part. Claims of fraud generally are subject to a six-year statute of limitations, but may

"To plead a cause of action to recover damages for aiding and abetting fraud, the complaint must allege the existence of an underlying fraud, knowledge of the fraud by the aider and abettor, and substantial assistance by the aider and abettor in the achievement of the fraud"

The Complaint alleges that the Trustees aided and abetted frauds committed by the Cody Defendants, the CSI Defendants and/or Fuller & LaFiura. The Court has sustained the facial sufficiency of the allegations of fraud against Fuller & LaFiura, and no challenge is made to the fraud claims lodged against the Cody Defendants and the CSI Defendants. Further, the circumstances alleged in the Complaint, including the allegations that the Trustees were knowing participants in the alleged fraud and took affirmative actions to conceal the Trust's true financial condition, suffice to permit a rational inference that the Trustees had actual knowledge of the fraud perpetrated by the other defendants (see AIG Fin. Prods. Corp. v ICP Asset Mgt., LLC, 108 AD3d 444, 446 [1st Dept 2013]). Finally, the Trustees are alleged to have rendered substantial assistance to the other alleged fraudsters by affirmatively assisting, helping conceal, or failing to disclose the fraud, in contravention of their fiduciary duties (see Stanfield Offshore Leveraged Assets, Ltd. v Metro. Life Ins. Co., 64 AD3d 472, 476 [1st Dept 2009]).^[FN8]

The foregoing allegations suffice to put the Trustees on notice of the basis of the aiding-and-abetting claim. Further, while many of the pertinent allegations are made upon information [*11]and belief, the Court does not find this to be a fatal defect at this early stage of the litigation, where elements such as actual knowledge need be pleaded only generally (see AIG Fin. Prods., 108 AD3d at 451; see supra), and the record otherwise permits the rational inference of a scheme to defraud.

Finally, the branch of the motions invoking the statute of limitations is denied for the reasons stated above with respect to the fraud claim against the Trustees.

The Complaint alleges that the Trustees breached their fiduciary duties to the Trust by failing to properly administer the affairs of the Trust. Among other things, the Complaint alleges that the Trustees failed to perform, or improperly or negligently performed, their obligations to: supervise the Trust's administrators and professional advisers; provide for the proper capitalization of the Trust; establish proper contribution rates; and comply with the Trust's membership requirements in relation to the admission and removal of members. The Complaint further alleges that the Trustees placed their own interests and interests of others above the Trust.

The Trustees contend that the breach of duty claim is barred by the statute of limitations. According to the Trustees, the claim is governed by a three-year limitations period and the alleged breaches of duty all occurred prior to December 31, 2009, when the Trust ceased offering workers' compensation insurance to its members. In response, the WCB maintains that the applicable limitations period is six years, based upon the allegations of actual fraud. The WCB further argues that the statute of limitations was tolled until the Trustees openly repudiated their fiduciary obligations and, in any event, the claim did not accrue until the Trust sustained damages.

"New York law does not provide a single statute of limitations for breach of fiduciary duty claims. Rather, the choice of the applicable limitations period depends on the substantive remedy that the plaintiff seeks. Where the remedy sought is purely monetary in nature, courts construe the suit as alleging injuries to property' within the meaning of CPLR 214 (4), which has a three-year limitations period. Where, however, the relief sought is equitable in nature, the six-year limitations period of CPLR 213 (1) applies" (IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d 132, 139-140 [2009]). Further, a six-year limitations period is available where the claim for breach of fiduciary duty is grounded upon essential allegations of actual fraud (see Kaufman v Cohen, 307 AD2d 113, 119 [1st Dept 2003]).

A claim for breach of fiduciary duty generally accrues "as soon as the claim becomes enforceable, i.e., when all elements of the tort can be truthfully alleged in a complaint. As with other torts in which damage is an essential element, the claim . . . is not enforceable until damages are sustained" (IDT, 12 NY2d at 140-141 [internal quotation marks omitted]). Accordingly, the statute of limitations ordinarily begins to run on the earliest date upon which the alleged breach of duty causes the plaintiff to sustain damages (see Cator v Bauman, 39 AD3d 1263, 1264 [4th Dept 2007]; Kaufman v Cohen, 307 AD2d 113, 121 n3 [1st Dept 2003]).

For the most part, the breach of duty claim is subject to a three-year limitations period. The relief sought in the Complaint is purely monetary, and bulk of the allegations underlying the claim do not sound in actual fraud (see Complaint ¶¶ 246-248 [failure to adequately capitalize the Trust], ¶¶ 249-250 [negligently setting inadequate claim reserves], ¶¶ 261-264 [inappropriate discount and contribution rates], ¶¶ 265-267 [inadequate underwriting practices], ¶¶ 271-274 ["capping EMFs"], ¶¶ 275-27 [general misadministration of Trust]). However, the allegations [*12]that the Trustees fraudulently concealed the financial condition of the Trust by causing improper accounting practices to be utilized and by redacting or concealing meeting minutes sounds in actual fraud and, therefore, are governed by a six-year limitations period (see Complaint ¶¶ 251-260, ¶¶ 280-282]).

However, regardless of the applicable limitations period, the record does not foreclose plaintiff's invocation of the "open repudiation" rule, which serves to toll the statute of limitations "until the fiduciary has openly repudiated his or her obligation or the relationship has been otherwise terminated" (People v Ben, 55 AD3d 1306, 1308 [4th Dept 2008]). The fiduciary relationship between the Trustees and the Trust was severed no later than July 1, 2011, when the WCB assumed administration and the Trustees could no longer have been expected to perform their trust responsibilities (Tydings v Greenfield, Stein, & Senior, LLP, 11 NY3d 195, 202 [2008]). If applicable, this tolling would render the entire claim timely even under the three-year limitations period.

On the other hand, the Court rejects the WCB's argument that damages were not sustained from the alleged breaches of fiduciary duty until the Trust became insolvent and the WCB assumed administration in July 2011. The Complaint alleges that the Trustees failed to properly manage and supervise the Trust throughout their entire tenure and that the entire accumulated deficit of the Trust is attributable to the Trustees' breaches of duty. Given the nature and timing of the alleged breaches, it is apparent that actual damages were sustained on an continual and ongoing basis. The fact that the Trust may not have been aware of the damages does not prevent the cause of action from accruing; the requirement that damages be sustained before a tort cause of action accrues is not tantamount to a discovery rule (cf. CPLR 213 [8]). Accordingly, the breach of duty claim should be deemed to accrue continuously, unless a tolling is established.

Based on the foregoing, the Trustees have failed to demonstrate on the present record that the claim for breach of fiduciary duty is time-barred.

The thirteenth cause of action alleges that the Trustees aided and abetted breaches of fiduciary duty by the Cody Defendants and by Fuller & LaFiura. The following legal principles apply to a claim for abetting and abetting a breach of fiduciary duty:

Given the Court's conclusion that the duties owed by Fuller & LaFiura to the Trust were not fiduciary in nature, the claim must be dismissed to that extent. However, the claim states a cause of action with respect to the alleged breaches of duty by the Cody Defendants.^[FN9] Read as a whole, the Complaint alleges that the Trustees worked in concert with the Cody Defendants to cause the Trust's financial condition to be misrepresented. Further, contrary to the Trustees' claims, the allegations of the Complaint — including the allegations of affirmative, concerted, misconduct on the part of the Trustees — suffice to give rise to a reasonable inference that the Trustees had actual knowledge of the Cody Defendants' alleged breaches of fiduciary duty.

A claim for aiding and abetting a breach of fiduciary duty is subject to the same statute of limitations analysis as a claim for breach of fiduciary duty. As the claim seeks monetary relief and any alleged actual fraud on the part of the Trustees is not essential to the claim,^[FN10] it is governed by a three-year statute-of-limitations that accrued as damages were inflicted through the ongoing misconduct. However, the present record does not conclusively address the applicability, if any, of the open repudiation rule to the aiding-and-abetting cause of action.

Accordingly, this branch of the motion is denied.

The Trustees move for dismissal of the claims of negligence and gross negligence as time-barred. These causes of action are subject to a three-year statute-of-limitations that accrued continually throughout the Trustees' service. Accordingly, plaintiff is precluded from relying upon acts of alleged negligence or gross negligence prior to May 31, 2010.

The Trustees move to dismiss the cause of action for implied indemnification for failure to state a claim. To state a claim for implied indemnity, the cause of action must include allegations that the Trustees and the third-party defendants owed a common duty to some other party that should be discharged by the third-party defendants, rather than the former Trust members. In State of NY Workers' Compensation Bd. v Madden, 119 AD3d 1022 (3d Dept 2014]), the Appellate Division held that the trustees of a GSIT shared with the WCB "a common duty to the covered employees to ensure that the [GSIT] maintained adequate reserves such that its assets would cover its liabilities" (id.). To similar effect is Murray Bresky Consultants, Ltd v New York Compensation Manager's Inc. (106 AD3d 1255, 1259 [3d Dept 2013]), in which a former trust member's claim for implied indemnity against the trustees was sustained "given their common duty to plaintiff's covered employees and to the Workers' Compensation Board to maintain adequate reserves in the trust so that it was adequately funded and its assets would cover its liabilities" (id.). Applying these principles and recent precedents, the Court must conclude that the claim for implied indemnity against the Trustees, brought by the WCB in its governmental capacity, states a cause of action (New York State Workers' Compensation Bd. v [*14]Consolidated Risk Servs., Inc., 2015 NY Slip Op 01699 [3d Dept Feb. 26, 2015]).

In his answer, Trustee Alonzo asserts a counterclaim against the WCB in its governmental capacity for indemnification and/or contribution based upon advice and consultation allegedly furnished to the Trust regarding its operation, administration and management. According to the WCB, Alonzo's first, third, seventh and ninth affirmative defenses also claim a right of indemnification, contribution, apportionment and/or offset against the WCB in its governmental capacity. The WCB moves to dismiss the counterclaim and these affirmative defenses for lack of subject matter jurisdiction.

"The Court of Claims has exclusive jurisdiction over actions for money damages against state agencies, departments, and employees acting in their official capacity in the exercise of governmental functions" (Dinerman v NYS Lottery, 58 AD3d 669 [2d Dept 2009]). As the WCB is a State agency, any suit for monetary damages premised upon the official capacity actions of the agency or its employees must be heard in the Court of Claims, not Supreme Court. This is true even where the damages are sought in the form of a counterclaim, offset or set-off (State of New York v Dewey, 260 AD2d 924, 925 [3d Dept 1995]; Commissioners of State Insurance Fund v Rosenshield, 179 Misc 180 [App Term 1st Dept 1942]).

Applying these principles, it is apparent that Supreme Court lacks jurisdiction over the counterclaim directed at the WCB in its governmental capacity. In arguing that he may pursue his counterclaim (and affirmative defenses) at least to the extent of a set-off, Alonzo relies upon dicta in People v Dennison (84 NY 272 [1881]), but that dicta was predicated upon a federal statute that has no applicability here. Indeed, Dennison itself recognized that "[a] set-off is in the nature of a cross-action" (id. at 280-281).

The affirmative defenses at issue on this motion allege the following: the claimed injuries were caused by plaintiff or others (first); plaintiff failed to mitigate damages (third); unclean hands (seventh); and the government acts of the WCB in relation to the Trust (thirteenth). For the reasons stated above, the thirteenth affirmative defense must be dismissed for lack of subject matter jurisdiction. While there may be aspects of the remaining affirmative defenses that are barred by lack of subject matter jurisdiction, plaintiff has not met its burden of conclusively establishing as a matter of law that the defenses of lack of causation, failure to mitigate damages and unclean hands cannot be invoked in a manner consistent with this Court's jurisdiction.

Accordingly,^[FN11] it is.

ORDERED that defendants' motions are granted in part and denied in part in accordance with the foregoing; and it is further

ORDERED that prior to said preliminary conference, counsel shall consult and confer in accordance with Rule 8 of the Commercial Division.

This constitutes the Decision and Order of the Court. This Decision and Order is being transmitted to plaintiff's counsel for filing and service. The signing of this Decision and Order shall not constitute entry or filing under CPLR Rule 2220, and counsel is not relieved from the applicable provisions of that Rule respecting filing, entry and Notice of Entry.

March 6, 2015

RICHARD M. PLATKIN