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The statute of limitations to recover on a breach of contract is six years.  Parties can extend that limitations periods by agreement, and New York General Obligations Law 17-101 governs the form of such agreements.  It provides that, “[a]n acknowledgment or promise contained in a writing signed by the party to be charged thereby is the only competent evidence of a new or continuing contract whereby to take an action out of the operation of the provisions of limitations of time for commencing actions under the civil practice law and rules. . . ”  Per GOL 17-101, only signed writings acknowledging the indebtedness and promising to pay are sufficient to extend the statute of limitations.

In considering whether a writing satisfies GOL 17-101 and extends a statute of limitations, Courts require three elements: Signature, Content, and Delivery.

First, the acknowledgement must be “signed by the party to be charged thereby.”  See 20 Plaza Hous. Corp. v. 20 Plaza E. Realty, 950 N.Y.S.2d 871, 874 (Sup. Ct. N.Y. Cty. Aug. 30, 2012) (Section 17-101 inapplicable because acknowledgment was “not signed by defendant”).

Second, the acknowledgment must convey “an intention to pay Plaintiff’s debt.”  See Knoll v. Datek Sec. Corp., 2 A.D.3d 594, 595 (2d Dep’t 2003) (“[T]he critical determination is whether the acknowledgment imports an intention to pay.”).  If the writing is at all inconsistent with an unequivocal intention to repay the debt, the writing fails the requirements of GOL 17-101.

Third, the acknowledgment “must have been communicated to the plaintiff or someone acting on his behalf, or intended to influence the plaintiff’s conduct.”  See Lynford v. Williams, 34 A.D.3d 761, 763 (2d Dep’t 2006) (Section 17-101 inapplicable where “plaintiff did not learn of the [purported acknowledgments] until after he commenced this action”).

In part because GOL 17-101 was intended to limit the instances in which an acknowledgment revives a cause of action, Courts strictly enforce each of the three requirements.  A writing failing any of the Signature, Content, or Delivery requirements is insufficient to restart the statute of limitations.  While the requirements of GOL 17-101 are strictly enforced, not every ambiguity in the acknowledgment will defeat its enforcement.  Recently, in Hawk Mtn. LLC v. RAM Capital Group LLC, 2021 NY Slip Op. 01349, the First Department held that an acknowledgement was sufficient to satisfy GOL 17-101 and restart the statute of limitations, despite its failure to specifically refer to the debt and inconsistencies between the acknowledgment and the underling note.


Continue Reading General Statement of Indebtedness is Sufficient to Restart Statute of Limitations Despite Ambiguities

The New York Commercial Division was created in 1993 “to test whether it would be possible, by concentrating on commercial litigation, to improve the efficiency with which such matters were addressed by the court and, at the same time, to enhance the quality of judicial treatment of those cases.”  By implementing rules and procedures developed with efficiency in mind and after careful consultation with Judges and practitioners alike, the Commercial Division has become a resounding success; it is one of the most efficient and effective forums in the world for the litigation of complex civil disputes.

It should therefore come as no surprise that other New York courts have taken notice of the innovative rule changes contributing to the success of the Commercial Division.  As Chief Administrative Judge Marks observes: “through the work of the Commercial Division Advisory Council – a committee of commercial practitioners, corporate in-house counsel and jurists devoted to the Division’ s excellence – the Commercial Division has functioned as an incubator, becoming a recognized leader in court system innovation, and demonstrating an unparalleled creativity and flexibility in development of rules and practices.”

Now, by Administrative Order effective February 1, 2021, the Uniform Civil Rules for the Supreme Court (the “Uniform Rules”) will incorporate, in whole or in part, nearly 30 Commercial Division Rules.  Some of these changes were foreshadowed by my colleague Paige Bartholomew in 2018 when the Unified Court System’s Advisory Committee on Civil Practice requested public comment on whether to adopt nine of the Commercial Division’s Rules.  
Continue Reading Innovation Becomes the Norm: Commercial Division Rules Shape Revised Uniform Rules for the Supreme Court and County Court

The statutes of limitations set forth in the CPLR are default rules, and parties generally are free to modify default rules by agreement.  But statutes of limitations also further the important public interests, such as avoiding stale claims and giving repose to our affairs.  In light of the public interests involved, there are substantial limits on how much parties can agree to lengthen, shorten, or waive the limitations periods applicable to claims arising under New York law.

For example, while parties can agree to a shorter limitations period than prescribed by the CPLR, a recent case by Albany County Commercial Division Justice Richard Platkin serves as a sharp reminder that a contractually shortened limitations period must be reasonable under the circumstances and, in many cases, the reasonableness of such an agreement depends not only on the length of the limitations period itself, but also on the accrual date.


Continue Reading Expect Careful Scrutiny of Contractually Shortened Statutes of Limitations

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