Tick, Tick: Trial Court Reversed By Misapplying The Statute Of Limitations (NJ)
Venkateswaran v. Wilmers, 570101/2021 (1st Dep’t Oct. 1, 2021) concerned defendants’ appeal from an order denying their motion to dismiss the complaint as time-barred. The subject dispute arose when, in 2011, plaintiff contracted to purchase defendants’ cooperative apartment. One provision of the contract allegedly represented “sellers have not made any material alterations or additions to the unit without complying with all applicable law.” In 2018, the cooperative board discovered that defendants, sellers, were issued a permit in 1992 for plumbing work to the apartment, that the permit was still “open,” and required plaintiff, as current owner, to correct the condition. Consequently, plaintiff initiated the action alleging, inter alia, the misrepresentations in the contract of sale fraudulently induced him to purchase the unit.
Here, the basis of plaintiff’s action was the contract of sale, executed in 2011. Plaintiff alleged that the fraud arose exclusively from the representations made in the contract, rather than independent misrepresentations that were collateral or extraneous to the contract. Accordingly, courts do not apply the fraud statute of limitations “if the fraud allegation is only incidental to the claim asserted; otherwise fraud would be used as a means to litigate stale claims.” Powers Mercantile Corp. v. Feinberg, 109 A.D.2s 117, 120 (1985), aff’d 67 N.Y.2d 981 (1986).
The takeaway from Venkateswaran is relatively straightforward: when a suit is predicated on a breach of contract, the statute of limitations for breach of contract applies. Litigators should think carefully about the essence of the claim.
Thanks to John Amato for his contribution to this post. If you have any questions, please contact Matthew Care.