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Estate of Parr v. Buontempo Insurance Services

A-4784-06T1 (N.J. Super. App. Div. 2008) (Unpublished)

SECURITIES; STATUTE OF LIMITATIONS — For consumer fraud claims, the statute of limitations is six years from the time the cause of action accrues, but it may not accrue until the damage was first realized or realizable.

A decedent’s estate sued a securities broker and an insurance company alleging that the broker induced the decedent, who was an elderly woman, into making inappropriate investments and that the insurance company wrongly allowed the broker to sell certain annuities to her. The estate claimed professional malpractice by the broker and breach of fiduciary duty. It also claimed consumer fraud by all of the parties named in the action. Following a court-ordered deposition and re-filing of the claims, the action was dismissed on the grounds that the statute of limitations had passed. The lower court found that the decedent’s cause of action accrued, or was first actionable, when she originally purchased the annuities and that the estate’s action was filed beyond the statute of limitations. On that basis, the lower court ruled that the estate was not entitled to discovery.

On appeal, the Appellate Division pointed out that for consumer fraud claims, the statute of limitations was six years from the time the cause of action accrued. It agreed with the estate that the claims against the broker and the insurance company accrued when the decedent first discovered that her investments were losing value, not when they were purchased. The Court found that even if the cause of action accrued earlier, the discovery rule would have been tolled, or extended, to start running when the damage was first realized. It also found that the lower court incorrectly required the estate to prove its claims following depositions but without allowing further discovery. The lower court’s dismissal of the estate’s claims was reversed and the matter was remanded to the lower court to proceed with pre-trial discovery.

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