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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: December 14, 2014

Where Contract Calls for Continuing Performance, Breach of Contract Claim Accrues Continuously With Each Failure to Perform

On December 5, 2014, Justice Platkin of the Albany County Commercial Division issued a decision in NYAHSA Services, Inc. Self Insurance Trust v. People Care Inc., 2014 NY Slip Op. 51711(U), applying the statute of limitations for breach of a contract requiring repeated performance.

In NYAHSA Services, the plaintiff moved to dismiss counterclaims for, among other things, breach of contract, on statute of limitations grounds. The court explained in granting the motion only in part:

The statute of limitations for a breach of contract claim is six years. Under New York law, a breach of contract cause of action accrues at the time of the breach. The date of the breach is controlling even where damages from the breach are not sustained until later and even where the injured party may be ignorant of the existence of the wrong or injury.

. . .

Where, as here, a contract provides for continuing performance over a period of time, each breach may begin the running of the statute anew such that accrual occurs continuously and plaintiffs may assert claims for damages occurring up to six years prior to filing of the suit. However, so much of the causes of action asserted by plaintiff as accrued more than six years prior to the commencement of the instant action must be dismissed as time-barred.

Applying the foregoing principles, the Court concludes that [the defendant’s] claim for breach of contract was not time-barred when the [plaintiff] commenced this action on July 15, 2010 and, therefore, it may pursue this counterclaim for breaches of contract that occurred on and after July 15, 2004, six years prior to the commencement of Action No. 1. However, the counterclaim is time-barred insofar as it seeks recovery of damages flowing from any breaches of contract that occurred prior to July 15, 2004.

(Internal quotations and citations omitted).

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