Court Applies Continuing Wrong Doctrine to Find Breach of Contract Claims Timely

John Lundin

John Lundin

Trusted business advisor and litigator; authority on practice in the New York State courts, and, in particular, the Commercial Division.

Published Jul 19, 2020

In the past week, Schlam Stone & Dolan LLP's Commercial Division Blog has posted on a number of issues, including the July 1, 2020, decision by Justice Cohen of the New York County Commercial Division in Tsui v. Chou, 2020 NY Slip Op. 32158(U), applying the continuing wrong doctrine to find breach of contract claims timely, explaining:

As a threshold matter, Defendants argue that Plaintiffs' breach of contract claims are untimely. The applicable statute of limitations for a breach of contract claim is six years. Defendants contend that Plaintiffs' breach of contract claims accrued when Katherine and Robert first failed to offer unsold Units for sale and amend the Plan, on December 16, 1987. Therefore, Defendants argue, the statute of limitations expired in 1993.
The Court disagrees. In contract actions, the continuing wrong doctrine is applied to extend the statute of limitations when a contract imposes a continuing duty on the breaching party. The continuing wrong doctrine may only be predicated on continuing unlawful acts and not on the continuing effects of unlawful conduct. The distinction is between a single wrong that has continuing effects and a series of independent, distinct wrongs. Katherine and Robert have, each year, refused to offer up the unsold Units for sale and/or subsequently amend the Plan to represent their Unit ownership. Thus, Plaintiffs have presented sufficient evidence to demonstrate a series of independent, distinct wrongs committed by Katherine and Robert. Plaintiffs' breach of contract claims are not barred by the statute of limitations.

(Internal citations omitted).

Other posts included:

On July 1, 2020, Justice Cohen of the New York County Commercial Division issued a decision in J.G. Jewlry PTE. LTD. v. TJC Jewelry, Inc., 2020 NY Slip Op. 32153(U), holding that defendants were subject to personal jurisdiction in New York based on the actions of their agents.

On July 2, 2020, Justice Sherwood of the New York County Commercial Division issued a decision in Solomon Capital, LLC v. Lion Biotechnologies, Inc., 2020 NY Slip Op. 32154(U), dismissing an action for failure to file a Note of Issue.

On July 3, 2020, Justice Friedman of the New York County Commercial Division issued a decision in Zacharias v. Wassef, 2020 NY Slip Op. 32161(U), vacating a preliminary injunction undertaking because of the defendants' failure to obey the injunction.

On July 9, 2020, Justice Livote of the Queens County Commercial Division issued a decision in Chun You Cheng v. Yang, 2020 NY Slip Op. 50801(U), considering constructive dividends in the parties' ownership share of a corporation's assets.

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