Bayridge Air Rights, Inc. v. Blitman Constr. Corp.

Bayridge Air Rights, Inc. v. Blitman Constr. Corp.

Opinion

 [*779]  [**674]  [***270]    MEMORANDUM:

The order of the Appellate Division should be affirmed, with costs.

Plaintiff, a developer, contracted with defendant Blitman Construction Corporation to construct a cooperative apartment complex in Brooklyn. Physical construction of the complex was substantially completed in April 1972.

Four years later, in 1976, plaintiff, Blitman and the building's shareholders entered into an agreement to transfer management control to the tenants. Under the terms of the agreement, the Statute of Limitations governing plaintiff's claims against Blitman, which would have expired [****3]  in April 1978, was extended so as to commence upon final payment to Blitman from an escrow account. The escrow payment was contingent on final approval from the Division of Housing and Community Renewal.

In 1981, five years after the contract was signed, plaintiff commenced the present action against Blitman and its surety, Traveler's Indemnity Company, alleging breach of the construction contract. As the original Statute of Limitations would have expired in 1978, plaintiff's action was untimely unless the agreement validly extended the limitations period. Plaintiff does not argue that the limitations period was extended to 1985--six years from the final payment from the escrow account--as specified in the parties' contract. Rather, plaintiff would read General Obligations Law § 17-103 as extending the applicable limitations period to six years from the date of the agreement, in this case 1982, regardless of the actual terms of the agreement. We agree with Supreme Court and the Appellate Division that the extension agreement is void and unenforceable.

General Obligations Law § 17-103 (1) provides that a promise to extend the Statute of Limitations is effective "according  [****4]   to its terms, to prevent interposition of the defense of the statute of limitation[s] in an action or proceeding commenced within the time that would be applicable if the cause of action had arisen at the date of the promise, or within such shorter time as may be provided in the promise". (Emphasis supplied.) As the present agreement purported to extend the limitations  [*780]  period to an indefinite date in the future in contravention of the six-year maximum provided by the statute, it cannot be enforced "according to its terms."

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