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Posted: March 22, 2015

Claim Not Barred by UCC’s Four-Year Statute of Limitations

On March 12, 2015, Justice Pines of the Suffolk County Commercial Division issued a decision in U.S. Nonwovens Corp. v. Pack Line Corp., 2015 NY Slip Op. 25078, discussing the statute of limitations for a claim governed by the UCC.

In U.S. Nonwovens Corp., the plaintiff brought an “action to recover damages for, among other things, breach of contract and breach of warranty.” The parties agreed that the plaintiff’s claims were governed by the United Nations Convention on Contracts for the International Sale of Goods (“CISG”). The defendant moved to dismiss on, among other grounds, the statute of limitations. The court denied the motion, explaining:

[B]ecause the CISG does not provide a statute of limitations, the four-year statute of limitations set forth in UCC 2-275 applies in this case. That section provides, in relevant part:

(1) An action for breach of any contract for sale must be commenced within four years after the cause of action has accrued.

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(2) A cause of action accrues when the breach occurs, regardless of the aggrieved party’s lack of knowledge of the breach. A breach of warranty occurs when tender of delivery is made, except that where a warranty explicitly extends to future performance of the goods and discovery of the breach must await the time of such performance the cause of action accrues when the breach is or should have been discovered.

Plaintiff claims that the breach of contract cause of action against Nuspark accrued in August 2010 when, as alleged in the Verified Complaint, the installation, integration and testing of the Auto Tubber machine was complete. Nuspark claims that Plaintiff’s claims accrued in December 2009 upon delivery of the Auto Tubber. However, Nuspark’s agreement with Plaintiff clearly and unequivocally obligated Nuspark to perform the installation and commissioning of the integrated machine. As such, the Plaintiff’s causes of action accrued when installation of the unit was complete. Accepting Plaintiff’s allegation that installation was not completed until August 2010 as true, as the Court must do, Nuspark has not met its burden of demonstrating that the time within which to commence the action expired before the action was commenced in May 2014. Although Nuspark may ultimately prevail on this defense, it has not demonstrated entitlement to dismissal under CPLR 3211(a)(5) on this pre-answer motion.

(Internal quotations and citations omitted).

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