Commercial Division Blog
Breach of Contract Statute of Limitations Extended by Continuing Wrong Doctrine
On July 29, 2015, Justice Emerson of the Suffolk County Commercial Division issued a decision in Affordable Housing Association, Inc. v. Town of Brookhaven, 2015 NY Slip Op. 25247, extending the statute of limitations for breach of contract based on the continuing wrong doctrine.
In Affordable Housing Association, "the defendant Town of Brookhaven (the 'Town') solicited proposals for the services of a professional consultant to assist it in developing wireless telecommunications facilities on Town-owned properties." The plaintiff and the Town subsequently entered into a contract "in which the plaintiff agreed to identify specific locations on Town-owned properties where telecommunications towers could be built, to construct such towers, and to lease them to telecommunications carriers." The plaintiff submitted proposals to the Town, but later learned that the Town had accepted proposals for those sites from another consultant.
The plaintiff brought an action for, among other things, breach of contract. The court refused to dismiss the claims on statute of limitations grounds, a decision it adhered to on reargument, explaining:
The continuing-wrong doctrine tolls running of the statute of limitations to the date of the commission of the last wrongful act when there is a series of continuing wrongs. It is an exception to the general rule that the statute of limitations for breach of contract runs from the time of the breach though no damage occurs until later. As in tort actions, the doctrine is predicated on continuing wrongful acts and not on the continuing effects of earlier wrongful conduct Moreover, there must be an affirmative breach of the contract within the applicable statutory limitations period, and recovery of damages is limited to those wrongs committed within such period.
(Internal quotations and citations omitted). The court went on to explain that the Town breached its "continuing duty to act in good faith and deal fairly with the plaintiff in the performance of their agreement."