In a case recently decided by the Supreme Court of New York, the issue was raised as to whether the plaintiff’s action was barred by the statute of limitations.

In January of 2014, a part ruptured at the Country Club of Ithaca (Country Club) resulting in a water leak and property damage. The plaintiff in the action, the insurance company, was the subrogee of the Country Club, where the water leak occurred with significant property damage. Each of the defendants in the case performed some work in connection with a renovation project at the Country Club in the year 2004.

Approximately 10 years later, the pipes burst and caused the damage at issue. The complaint alleged that one of the defendants was negligent or grossly negligent and failed to use due care in in maintaining and/or installing the hood system and fresh intake system and, as a result, the fresh air intake unit located on the roof malfunctioned and the air heating coils had failed to operate, thereby causing a sprinkler line to fracture. The complaint further alleged that one of the defendants was negligent, reckless, grossly negligent and/or failed to use due care in maintaining and/or installing the sprinkler system and that, as a result, a plastic collar around a sprinkler head failed, causing extensive damage. All of the above work by each of the defendants was concluded in 2004.

After the complaint was filed, each of the defendants filed a motion to dismiss the complaints, arguing that the complaints were barred by the statute of limitations. The plaintiff opposed each of the motions, arguing that the statute of limitations begins to run upon discovery of the defect and resulting damage and that the amended complaints were timely.

In discussing the case, the court indicated that a motion to dismiss was appropriately granted if the movant establishes that a cause of action cannot be maintained due to the escalation of the statute of limitations. It is the moving party’s burden, initially, to establish the affirmative defense by prima facie proof that the statute of limitations had elapsed. The statute of limitations for a negligence or property damage claim is three years. In cases against architects or contractors, the accrual date for the statute of limitations purposes is completion of performance, no matter how a claim is characterized in the complaint — negligence, malpractice or breach of contract.

With reference to limited claims, the court pointed out that the action was not filed until almost 11 years after the completion of the work, and outside the statute of limitations. The court concluded that the defendant made a prima facie case supporting its motion to dismiss. The burden then shifts to the plaintiff to raise a question of fact as to whether the action was timely commenced or an exception applied. The court then pointed out that the plaintiff’s evidence did not raise a material issue of fact. In each case, the plaintiff failed to provide any evidence of continuing maintenance services that would warrant consideration of a later date to begin the time for the statute of limitations. In each case, the court conceded that the statute of limitations began to run upon the completion of the work and not when the water damage occurred. Therefore, the motion of all three defendants to dismiss the complaints were granted.


Readers Ask

Q: We understand that under the California law, if you are doing any business in California under the Alarm Company Act, you are required to have a physical location in the state. Is that correct? Our company conducts sales in the state; however, our installation is done by licensed third party independent contractors. Do we require a physical location?

A: Under the law in the State of California, if you are doing business as an alarm company, you are required to maintain a physical location in the state. If your principal location is outside of the state, you can maintain a branch office, which requires a branch office manager who must spend 51 percent of his or her time at the branch office. The branch office manager must maintain an alarm agent's permit.

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