Ordered that the order is modified, on the law, by deleting the
In October 1990 the plaintiff sold his shares of stock in the defendant Yuenger Woodworking Corp. (hereinafter Yuenger) and entered into a restrictive covenant in favor of Yuenger in exchange for the sum of $1,750,000. Yuenger was to make the payments to the plaintiff in monthly installments over a 15-year period. On March 31, 2000, however, Yuenger apparently stopped making payments. In October 2004 the plaintiff commenced this action against Yuenger and its officers, directors, and shareholders (hereinafter the individual defendants). The plaintiff's first two causes of action were to recover damages for constructive fraudulent transfers of corporate assets under Debtor and Creditor Law §§ 273 and 273-a, and his third cause of action was to recover damages for actual fraudulent transfers of corporate assets under Debtor and Creditor Law § 276. The plaintiff alleged that Yuenger began to make fraudulent transfers of assets to the individual defendants "beginning in or about October of 1990" in order to render Yuenger unable to pay its debt to him.
The Supreme Court incorrectly determined that the plaintiff's claims sounding in actual and constructive fraud were barred by the statute of limitations. Claims based on constructive fraud, such as those recognized by Debtor and Creditor Law §§ 273 and 273-a, are governed by the six-year statue of limitations set forth in CPLR 213 (1), and such claims arise at the time of the fraud or conveyance (see Wall St. Assoc. v Brodsky, 257 A.D.2d 526, 530 ; Avalon LLC v Coronet Props. Co., 306 A.D.2d 62 ). Where actual fraud is alleged, such as that recognized under Debtor and Creditor Law § 276, the statute of limitations is six years from the fraudulent transfer or two years from the time the fraud was discovered or could have been discovered (see Island Holding v O'Brien, 6 A.D.3d 498 ; CPLR 203 [g]), whichever is later (see Miller v Polow, 14 A.D.3d 368 ; Liberty Co. v Boyle, 272 A.D.2d 380, 381 ).
The plaintiff's constructive fraud claims under Debtor and Creditor Law §§ 273 and 273-a were based on Yuenger's
Finally, as the plaintiff's second cause of action to recover damages for constructive fraud pursuant to Debtor and Creditor Law § 273-a was predicated on the existence of a July 2003 judgment in a prior action which was entered only against Yuenger, the plaintiff may not assert this cause of action against the individual defendants.