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2138747 Ontario, Inc. v Samsung C&T Corp.

Supreme Court of New York, Appellate Division, First Department

 October 11, 2016, Decided ; October 11, 2016, Entered

653270/14, 1509

Opinion

 [**11]  [*123] Gische, J.

On this appeal, we are called upon to decide whether a broadly drawn contractual choice-of-law provision, that provides for the agreement to be "governed by, construed and enforced" in accordance with New York law, precludes the application of New York's borrowing statute (CPLR 202). We find that it does not. Where, as here, the plaintiff is a nonresident, alleging an economic [***2]  claim that took place outside of New York, the time limitations provisions in the borrowing statute apply, regardless of whether the parties' contractual choice-of-law agreement can be broadly construed to include the application of New York's procedural as well as its substantive law. Pursuant to New York's borrowing statute, the time within which plaintiff had to commence this action was the shorter of either Ontario's or New York's statute of limitations. Since this action would be untimely under Ontario's two-year statute of limitations, [*124]  even though it would be timely under New York's domestic, six-year statute of limitations, the trial court correctly dismissed the action as time-barred. Contrary to plaintiff's argument, the recent Court [****2]  of Appeals decision in Ministers & Missionaries  [**12]  Benefit Bd. v Snow (26 NY3d 466, 25 NYS3d 21, 45 NE3d 917 [2015]) does not prohibit the application of the borrowing statute, nor does it support applying New York's domestic, six-year statute of limitations to the parties' dispute in this case.

Plaintiff is incorporated under the law of the Province of Ontario, Canada, and is a creditor of SkyPower Corp., a Canadian renewable energy developer. SkyPower filed for bankruptcy in August 2009, and by Canadian court order dated October 27, 2014, [***3]  the bankruptcy trustee assigned to plaintiff all of SkyPower's claims made against the defendants in this action. Plaintiff seeks damages in connection with the alleged breach of a nondisclosure and confidentiality agreement (NDA), dated September 26, 2008, between SkyPower and defendants, who were potential investors. No transaction ever materialized and, pursuant to the NDA, defendants were obligated to destroy certain proprietary information that SkyPower had provided. It is alleged, however, that in violation of the NDA, defendants used the confidential information to enter into a secret memorandum of understanding with the Ontario government, in December 2008, for the development of a renewable energy project. It is alleged further that SkyPower first learned of this breach in January 2010, when defendants' agreement with the Ontario government was made public. This action was commenced in October 2014.

] New York's general statute of limitations for a breach of contract action is six years (CPLR 213 ). ] The Ontario equivalent limitations period is only two years (Ontario Limitations Act, 2002, SO 2002, ch 24, schedule B, § 4). CPLR 202, New York's borrowing statute, provides as follows:

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144 A.D.3d 122 *; 39 N.Y.S.3d 10 **; 2016 N.Y. App. Div. LEXIS 6563 ***; 2016 NY Slip Op 06671 ****

 [****1]  2138747 Ontario, Inc., Appellant, v Samsung C&T Corporation et al., Respondents.

Subsequent History: Leave to appeal granted by Ontario, Inc. v. Samsung C&T Corp., 29 N.Y.3d 913, 2017 N.Y. LEXIS 1668, 63 N.Y.S.3d 3, 85 N.E.3d 98 (June 22, 2017)

Affirmed by 2138747 Ontario, Inc. v. Samsung C&T Corp., 31 N.Y.3d 372, 2018 N.Y. LEXIS 1447, 78 N.Y.S.3d 703, 103 N.E.3d 774 (June 12, 2018)

Prior History: Appeal from an order of the Supreme Court, New York County (Jeffrey K. Oing, J.), entered October 8, 2015. The order, to the extent appealed from as limited by the briefs, granted defendants' motion to dismiss as time-barred the claims assigned by Skypower Corp. to plaintiff.

2138747 Ontario Inc. v. Samsung C&T Corp., 2016 N.Y. Misc. LEXIS 3152 (N.Y. Sup. Ct., Aug. 29, 2016)

CORE TERMS

borrowing statute, choice-of-law, statute of limitations, courts, contractual, six-year, procedural law, arbitration, domestic, accrued, lawsuit, parties

Contracts Law, Defenses, Affirmative Defenses, Statute of Limitations, Civil Procedure, Preliminary Considerations, Federal & State Interrelationships, Choice of Law, Governments, Legislation, Statute of Limitations, Time Limitations, Business & Corporate Compliance, Contract Conditions & Provisions, Contracts Law, Contract Conditions & Provisions