Chapter 30 STATUTES OF LIMITATIONS
Jurisdiction | New York |
Chapter Thirty
Statutes of Limitations
I. Statute of Limitations
As noted by the Court of Appeals in Ely-Cruikshank, "[g]enerally, any Statute of Limitations begins to run when a cause of action accrues. A breach of contract cause of action accrues at the time of the breach. The statute runs from the time of the breach though no damage occurs until later."5165 A cause of action also accrues when one omits the performance of an obligation although damages may not accrue until a later date. But, the statute of limitations does not begin to run until there is opportunity to enforce the obligation.5166 New York does not apply the two-year discovery rule to statutes of limitations in contract actions5167 so that knowledge of the occurrence of the wrong on the part of the plaintiff is not necessary to start the statute of limitations running in a contract action.5168 A breach of contract can be said to occur when payment is expressly rejected, or when the party seeking payment should have viewed his claim as having been constructively rejected.5169
"A breach of contract cause of action accrues, and the relevant six-year statute of limitations begins to run, at the time of the breach (CPLR 213(2)), which, as a general rule, 'occurs when all of the factual elements necessary to maintain the lawsuit and obtain relief come into existence.' "5170
Generally, the choice of applicable statute of limitations is properly related to the remedy rather than to the theory of liability. It is also a well-established principle of law that where an allegation of fraud is not essential to the cause of action pleaded except as an answer to an anticipated defense of statute of limitations, courts "look for the reality, and the essence of the action and not its mere name."5171
It seems to be settled law that a cause of action accrues when the right to sue has become vested.5172 In keeping with the important purposes of avoiding stale claims and providing defendants with a degree of certainty and predictability in risk assessment, precedent authority, including from the Court of Appeals, has rejected accrual dates which cannot be ascertained with any degree of certainty, in favor of a bright line approach.5173 Generally, any statute of limitations begins to run when a cause of action accrues.5174 A claimant's cause of action does not accrue until it possesses the legal right to be paid and to enforce its right to payment in court.5175 A particular cause of action accrues as soon as a claimant is able to state the elements of that cause of action and, thus, to assert a valid right to some sort of legal relief. It seems a logical corollary to this rule that the statute of limitations may not begin to run before all the elements of a cause of action may be truthfully alleged, and it may not continue to run for any period of time during which an element of the cause of action can no longer be truthfully alleged.5176 The time within which a plaintiff must commence an action "shall be computed from the time the cause of action accrued to the time the claim is interposed."5177
The statutory period of limitations begins to run from the time when liability for wrong has arisen even though the injured party may be ignorant of the existence of the wrong or injury. This is so even though the result may at times be "harsh and manifestly unfair, and creates an obvious injustice because a contrary rule would be entirely dependent on the subjective equitable variations of different Judges and courts instead of the objective, reliable, predictable and relatively definitive rules that have long governed this aspect of commercial repose.5178
"[W]here the claim is for payment of a sum of money allegedly owed pursuant to a contract, the cause of action accrues when the [party making the claim] possesses a legal right to demand payment" . . . In other words, the statute of limitations in these cases was triggered when the party that was owed money had the right to demand payment, not when it actually made the demand."5179
The expression "claim accrued" is not identical with the expression "cause of action accrued." The claim accrues when it matures, and the words "claim accrued" have the same meaning as "damages accrued."5180 The expression "claim accrues" is synonymous with "damages accrue," and a claim accrues when damages are ascertainable.5181
In Allard v. Allard,5182 the separation agreement required defendant to transfer title to the marital residence to plaintiff. The agreement provided that "[w]hen and if the house is sold," the parties would equally share in the profit. Plaintiff obtained additional loans against the property, significantly increasing the mortgages. The defendant filed a postjudgment motion for an order to either sell the property or to direct plaintiff to pay off the loans because the additional loans constituted a breach as they encumbered his contingent interest in the property. The motion was denied. Denial affirmed because the wife was under no obligation to sell the home. The claim was speculative and abstract as there was no justiciable case or controversy ripe for adjudication.5183 The agreement further provided that neither party would "at any time in the future incur or contract any debt, charge or liability whatsoever for which the other party, or his or her property . . . is now or may become liable." Defendant's contention that the loans and mortgages constituted a present encumbrance on his "property"—his contingent share of the equity in the residence—was time barred under the six-year rule. Also, the loans did not constitute a continuing wrong.5184 The limitations period began to run from the time when the wrong arose even though the injured party was unaware of the wrong.
In Boardman v. Kennedy,5185 plaintiff-ex-wife of decedent, John R. Kennedy, commenced an action against decedent's widow, individually and as executrix of decedent's estate. Pursuant to the terms of a matrimonial stipulation between plaintiff and decedent, plaintiff received, a one-half interest in decedent's IRA. Plaintiff did not receive her share. Held: Supreme Court properly granted defendant's motion to dismiss the complaint under CPLR 3211 and summary judgment under CPLR 3212: the cause of action was governed by the six-year statute of limitations in CPLR 213(1) and (2), not by the 20–year statute of limitations for an action to enforce a money judgment pursuant to CPLR 211(b) because plaintiff did not have to wait until decedent retired in order to obtain her share of the IRA. She was immediately entitled to her half of that account; it should not have taken her nearly 20 years to realize that she had not received her share.
A breach can not in any way be equated with an option to discontinue or cancel, the exercise of which would constitute an alternative performance of the agreement. A breach by definition can never constitute a mode of fully performing an agreement. Performance, if it means anything at all, is "carrying out the contract by doing what it requires or permits"; a breach is the unexcused failure to do so.5186
Commonly, an action to recover for a liability created by statute is required to be instituted according to the language of the statute generating the liability.5187
The legislatively prescribed period of limitations is the outside limit within which a party must pursue its remedy if it is to be found to have pursued it diligently.5188 In General Stencils, Inc. v. Chiappa,5189 the Court of Appeals cited the U.S. Supreme Court regarding the strong role of equity in fraud cases as they relate to limitation periods:
The principle that a wrongdoer should not be able to take refuge behind the shield of his own wrong is a truism. The United States Supreme Court has espoused the doctrine in these terms: "To decide the case we need look no further than the maxim that no man may take advantage of his own wrong. Deeply rooted in our jurisprudence this principle has been applied in many diverse classes of cases by both law and equity courts and has frequently been employed to bar inequitable reliance on statutes of limitations."
In New York, a breach of contract cause of action accrues at the time of the breach.5190
II. Societal Interest and Public Policy; Benefits of the Statute of Limitations
A statute of limitations does not make an agreement that was void at its inception valid by the mere passage of time.5191 The histories of statutory and common law defenses to contract actions, to wit, statutes of limitations, waiver, abandonment, equitable estoppel, and laches, represent parallel determinations by the Legislature and the judiciary to relieve debtors from living in perennial uncertainty attributable to creditors' inexcusable delays to timely and diligently prosecute their claims. Both bodies of law acknowledge that after a protracted period of time it is unfair to require a defendant to attempt to piece together his defense to an old claim.5192 Our statute of limitations doctrine "serve[s] the . . . objectives of finality, certainty and predictability".5193
There is no obligation upon a debtor, legal or moral, to make a public confession or to alert people who may have claims against him—it is up to the creditor to keep himself advised.5194
" Although the statute of limitations is generally viewed as a personal defense 'to afford protection to defendants against defending stale claims,' it also expresses a societal interest or public policy 'of giving repose to human affairs.' "5195
In Hernandez v. New York City Health & Hospitals Corp.,5196 the Court of Appeals repeated: "Statutes of Limitation are 'statutes of repose' representing 'a legislative judgment that . . . occasional hardship [resulting from not applying the tolling provisions] is outweighed by the advantage of barring stale claims.' " The statute of limitations establishes a deadline after which the defendant may legitimately have peace of mind; it also...
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