Busher v. Barry
20-3587-cv
| 2d Cir. | Nov 2, 2021Background:
- WFHC (a for‑profit NY corporation) owns the 280‑acre property used by Winged Foot Golf Club (a nonprofit membership corp.); a long‑term lease between them originated in 1924.
- The 1947 lease amendment fixed annual rent at $30,000; renewals followed in 1974, 1984, 2002, and a 2013 extension (running to 2071).
- The Club stopped requiring individual WFHC share ownership over mid‑20th century and had acquired a majority of WFHC shares by 1983.
- Plaintiffs (derivatively for WFHC) sued in 2014 alleging directors and the Club engineered below‑market leases and a scheme to entrench control, causing waste and misappropriation of WFHC’s sole asset.
- The district court held most claims time‑barred under New York’s six‑year statute, found only the 2013 renewal potentially timely, denied plaintiffs’ partial summary judgment on that issue, and plaintiffs voluntarily dismissed the remaining claims with prejudice.
- On appeal the Second Circuit affirmed the statute‑of‑limitations dismissal, rejected equitable estoppel tolling, and dismissed the appeal of the denial of partial summary judgment for lack of jurisdiction.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether pre‑June 16, 2008 claims are time‑barred | Busher: tolling applies (equitable estoppel/fraud concealment) | Defs: six‑year statute bars claims before June 16, 2008 | Claims except those tied to 2013 lease are barred |
| Whether equitable estoppel/fraud concealment tolled limitations | Busher: defendants concealed WFHC’s for‑profit purpose so plaintiffs reasonably delayed suit | Defs: public records and “storm warnings” put shareholders on inquiry notice | No equitable estoppel; plaintiffs on inquiry notice, tolling not warranted |
| Accrual date for unjust enrichment based on 2002 renewal option | Busher: claim accrued when option exercised (2013) | Defs: wrongful act occurred when option was granted (2002) | Accrual is when wrongful act occurred; claim accrued in 2002 (time‑barred) |
| Reviewability of denial of partial summary judgment | Busher: adverse dispositive ruling + voluntary dismissal permits appellate review | Defs: denial of summary judgment is interlocutory and not appealable | Appeal of the denial dismissed for lack of jurisdiction; only time‑bar dismissal reviewable |
Key Cases Cited
- Pearl v. City of Long Beach, 296 F.3d 76 (2d Cir. 2002) (distinguishing equitable tolling and New York equitable estoppel concepts)
- Zumpano v. Quinn, 6 N.Y.3d 666 (N.Y. 2006) (equitable estoppel requires inducement and reasonable reliance to excuse delay)
- Kaufman v. Cohen, 760 N.Y.S.2d 157 (App. Div. 2003) (unjust enrichment accrues when the wrongful act giving rise to restitution occurs)
- Palmieri v. Lynch, 392 F.3d 73 (2d Cir. 2004) (arguments not raised below are waived on appeal)
- DiStiso v. Cook, 691 F.3d 226 (2d Cir. 2012) (denial of summary judgment is generally not appealable)
- Ortiz v. Jordan, 562 U.S. 180 (U.S. 2011) (interlocutory orders retain their character and are not immediately appealable)
- Ali v. Fed. Ins. Co., 719 F.3d 83 (2d Cir. 2013) (party may obtain review of an adverse dispositive ruling by abandoning remaining claims, but review is limited to the dismissed claims)
- Empire Volkswagen, Inc. v. World‑Wide Volkswagen Corp., 814 F.2d 90 (2d Cir. 1987) (a voluntary dismissal with prejudice bars appellate review of the voluntarily dismissed matters)