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Monday, November 07, 2016

Consultant’s breach of contract claim rejected as time barred and for failure to state a cause of action


Consultant’s breach of contract claim rejected as time barred and for failure to state a cause of action
Kyer v Ravena-Coeymans-Selkirk Cent. Sch. Dist., 2016 NY Slip Op 07254, Appellate Division, Third Department 

The Ravena-Coeymans-Selkirk Central School District [District] Board of Education approved a contract between the District and Lisa Kyer [Plaintiff] that provided that Plaintiff would research and review the District’s financial and student records to determine whether it could seek additional special education aid for the 2012-2013 and 2013-2014 school years.  By letter dated June 27, 2013, the District advised Plaintiff that it was "terminating the contract . . . effective June 30, 2013 because it determined that the information provided by Plaintiff was inaccurate and excessively overstated the true costs involved" and the District would not pay her for her services.

Plaintiff then submitted an invoice seeking payment in the amount of $29,635.04 for her services. The invoice was rejected by School Superintendent Alan McCartney, who advised Plaintiff that payment was declined “because the work had been performed by his staff and others.” By letter dated July 17, 2013, Plaintiff asserted that “for services rendered in connection with the 2012-2013 school year, the ‘total amount due’ was $65,677.05.”

On August 27, 2014, Plaintiff commenced filed her complaint in Supreme Court asserting breach of contract and account stated claims, together with two causes of action sounding in tort, stemming from the District’s nonpayment of her invoice submitted July 17, 2013. Supreme Court granted the District’s motion to dismiss, finding that Plaintiff's claims sounding in tort “failed to state a cause of action” and her breach of contract and account stated causes of action were time-barred. Plaintiff appealed the Supreme Court’s rulings, which rulings were affirmed by the Appellate Division.

With respect to Plaintiff’s claims “sounding in tort,” the Appellate Division said that Supreme Court properly dismissed these claims as "there is no cause of action for negligent performance of a contract."

Citing Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, the Appellate Division explained that "[i]t is a well-established principle that a simple breach of contract is not to be considered a tort unless a legal duty independent of the contract itself has been violated. This legal duty must spring from circumstances extraneous to, and not constituting elements of, the contract, although it may be connected with and dependent upon the contract."

With respect to Plaintiff’s breach of contract claim, the Appellate Division said Education Law §3813 (2-b) provides that, "no action . . . shall be commenced against [a school district] more than one year after the cause of action arose." The court then noted that a breach of contract cause of action accrues and begins to run when the Plaintiff possesses “a legal right to demand payment.”

In this instance, said the court, June 15, 2013 was the earliest date on which Plaintiff could have exercised her legal right to request full payment for her services in securing additional aid for the 2012-2013 school year and, thus, this was “the operative date” and she had until June 15, 2014 to file her complaint. However, Plaintiff’s breach of contract cause of action was filed on August 27, 2014 and thus it is time-barred.

Submitting invoices on later dates does not toll or extend the one-year statute of limitations as a cause of action for an account stated "accrues on the date of the last transaction in the account." Plaintiff posted a letter dated July 17, 2013, in which she stated that she was enclosing a revised invoice that reflected "the total amount due" for the additional aid she secured for the District's 2012-2013 school year. However, said the Appellate Division, her “revised invoice, dated July 16, 2013, sought payment from [the School District] in the amount of $65,677.05 for ‘Special Education Aid Claim,’ and this is the last transaction reflected in the invoice.”

The bottom line: As Plaintiff did not commence this action until August 27, 2014, the Appellate Division ruled that Supreme Court properly dismissed her “account stated cause of action” as time-barred.

The court then said that Plaintiff’s claim that her “cause of action began to run when she filed her notice of claim” was incorrect. In the words of the Appellate Division, “…. Education Law §3813(2-b) plainly states that ‘no action . . . shall be commenced against any [school district] more than one year after the cause of action arose,’ and there is no authority indicating that the statute of limitations begins to run when a Plaintiff files a notice of claim, especially here, where accrual of a claim for purposes of the notice of claim is ‘deemed to have occurred as of the date payment for the amount claimed was denied.’”

The decision is posted on the Internet at:

Handbooks focusing on State and Municipal Public Personnel Law continue to be available for purchase via the links provided below:

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A Reasonable Penalty Under The Circumstances at http://nypplarchives.blogspot.com

The Disability Benefits E-book: at http://section207.blogspot.com/

Layoff, Preferred Lists at http://nylayoff.blogspot.com/

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