Summary
In Pereyron, the court applied the statutory period set forth in Section 1309(1) by measuring one year from when "the conveyance could reasonably have been discovered."
Summary of this case from Burkhart v. Genworth Fin., Inc.Opinion
Civil Action No. 20509-NC.
Submitted April 23, 2004.
Decided April 29, 2004.
Thomas P. Preston Blank Rome LLP Wilmington, DE.
James S. Green Kevin A. Guerke Seitz, Van Ogtrop Green, P.A., Wilmington, DE.
Dear Counsel:
This letter addresses plaintiff's motion for summary judgment. For the reasons briefly set forth below, the motion is granted.
Background. Plaintiff, Marie-Christine Pereyron, filed this declaratory judgment action against Leon Constantin Consulting, Inc. ("LCCI") and Sofie Cahen Vorburger on August 26, 2003. The complaint seeks to establish that Pereyron is the legal owner of 2,400 shares of LCCI common stock.
Both defendants have answered the complaint. Defendant Vorburger has also asserted a cross-claim against LCCI and a counterclaim against Pereyron. Vorburger's answer, cross-claim, and counterclaim was subsequently amended. In the interim, Pereyron moved for summary judgment. That motion is now fully briefed.
Analysis. Pereyron argues that the undisputed facts establish that Vorburger's counterclaim and affirmative defense of fraudulent conveyance is barred under 6 Del. C. § 1309. Section 1309 provides:
A cause of action with respect to a fraudulent transfer or obligation under this chapter is extinguished unless action is brought:
(1) Under § 1304(a)(1) of this title, within 4 years after the transfer was made or the obligation was incurred or, if later, within 1 year after the transfer or obligation was or could reasonably have been discovered by the claimant;
(2) Under § 1304(a)(2) or § 1305(a) of this title, within 4 years after the transfer was made or the obligation was incurred; or
(3) Under § 1305(b) of this title, within 1 year after the transfer was made or the obligation was incurred.
Under the plain language of section 1309, Vorburger's cause of action for fraudulent conveyance must have been brought within four years from the date Pereyron obtained an interest in the LCCI stock or one year after Pereyron's ownership interest reasonably could have been discovered by Vorburger.
The undisputed facts show that the LCCI stock was conveyed to Pereyron on August 11, 1999. The undisputed facts also show that Vorburger could reasonably have discovered that the LCCI stock was conveyed to Pereyron on June 12, 2002. On that date, counsel for Vorburger took the deposition of Jonathan B. Lapin, Esquire, of Lapin Enterprises, Inc. (transferor of the LCCI stock) in an unrelated proceeding. Vorburger was present at this deposition. During the deposition, Lapin testified about the August 11, 1999 transaction. Vorburger's original answer and counterclaim was filed on November 13, 2003 — more than four years after the initial conveyance and more than one year after the date when Vorburger should have discovered the conveyance.
Mem. of Law in Supp. of Pl.'s Mot. for Summ. J., Ex. H (assignment and assumption agreement between Lapin Enterprises, Inc. and Pereyron dated August 11, 1999).
Id., Ex. L (excerpt from deposition of Jonathan B. Lapin on June 12, 2002).
In the face of these undisputed facts, Vorburger makes four arguments: (1) that the facts are in dispute as to the nature of Pereyron's ownership interest in the LCCI stock; (2) that granting summary judgment at this stage of the litigation is premature; (3) that Pereyron failed to plead the statute of limitations as an affirmative defense and has therefore waived her ability to pursue it now; and (4) that Pereyron's fraudulent concealment of her acquisition of the LCCI stock tolls the statute of limitations. I will address each of these arguments in turn.
Dispute Over Pereyron's Ownership is Not Material to the Statute of Limitations Issue. Although not challenging the fact that the transaction which gave Pereyron an interest in LCCI stock occurred on August 11, 1999, Vorburger nonetheless argues that the agreement between Lapin Enterprises, Inc. and Pereyron does not support Pereyron's claim that she is the legal owner of the stock. Vorburger argues that Pereyron may have only obtained a "beneficial interest" in the LCCI stock, rather than legal or record ownership. This argument is wide of the mark. At issue is not whether Pereyron is in fact the owner of the LCCI stock, but whether Vorburger can challenge Pereyron's ownership on the grounds that it was a fraudulent conveyance. There being no dispute as to the date of the transaction (and the date when Vorburger should have known about the transaction), uncertainty as to the precise nature of Pereyron's ownership does not prevent summary judgment on the statute of limitations issue. Summary Judgment is Not Premature. Vorburger argues that "[w]e are in the nascent stages of this litigation" and that she "has been denied a reasonable opportunity to develop material facts in opposition to Pereyron's motion." Vorburger's argument is without merit because there is no dispute as to the material facts under section 1309 — the transfer date of August 11, 1999, and the discovery date of June 12, 2002. Indeed, Vorburger herself was present at Lapin's deposition on June 12, 2002. Discovery will not change the critical dates and is only a recipe for frivolous delay. Pereyron Did Not Waive a Statute of Limitations Defense. Pereyron's answer to Vorburger's amended counterclaim does not use the words "statute of limitations." Vorburger argues, therefore, that any argument based on the statute of limitations found in section 1309 has been waived under Court of Chancery Rule 8(c). The facts and circumstances in the instant case, however, demonstrate that not allowing Pereyron to invoke section 1309 would unnecessarily allow form to triumph over substance. Pereyron raised this issue in her summary judgment motion on February 10, 2004 — over a month before Vorburger filed her amended answer to the complaint and counterclaim. No prejudice will accrue, and judicial economy will be enhanced, if I deem the pleadings amended. As such, Pereyron "will be regarded as having amended its pleadings, and the other parties will be assumed to have filed amended responses consistent with the positions taken in the briefs." The Statute of Limitations Will Not Be Tolled. Vorburger argues that under the doctrine of equitable tolling, the four-year statute of limitations in section 1309 did not begin to run until Lapin's deposition on June 12, 2002. This argument is absurd. Section 1309 already includes a tolling provision. Under the statute, the limitations period expires four years after the conveyance or one year after the conveyance could reasonably have been discovered. The plain language of section 1309 does not allow this Court to permit "equitable tolling" over and above the tolling period explicitly contained in the statute. "[S]tatutes of limitations are to be strictly construed because the General Assembly has evinced its intent to bar claims filed after the stated time." Conclusion. There is no genuine issue of material fact regarding the date on which Pereyron was conveyed an interest in the LCCI stock or the date on which Vorburger should have known of the transfer. Pursuant to 6 Del. C. § 1309, Vorburger's counterclaim and affirmative defense of fraudulent conveyance is barred as a matter of law.
See Def. Sophie Cahen Vorburger's Mem. of Law in Opp'n to Pl.'s Mot. for Summ. J., at 5.
I do not rule today on the issue of whether Pereyron is the legal owner of the LCCI stock.
Id. at 6.
Id. at 9.
Mem. of Law in Supp. of Pl.'s Mot. for Summ. J., Ex. L (Lapin deposition).
I should note that this Court had to advise Vorburger that a default judgment would be entered in order get her to answer the complaint. Letter from Chandler, C. to Preston and Naylor of 11/12/03.
Chrysler Corp. v. New Castle County, 464 A.2d 75, 84 (Del.Super. 1983).
Wilson v. King, 673 A.2d 1228, 1231 (Del. 1996).
IT IS SO ORDERED.