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Smile Train, Inc. v. Ferris Consulting Corp.

Supreme Court, Appellate Division, First Department, New York.
May 27, 2014
117 A.D.3d 629 (N.Y. App. Div. 2014)

Summary

stating a contractual provision shortening time for filing claim must "not be so vague and ambiguous that it is unenforcible"

Summary of this case from CDG Int'l Corp. v. Q Capital Strategies, LLC

Opinion

2014-05-27

SMILE TRAIN, INC., Plaintiff–Appellant, v. FERRIS CONSULTING CORP., et al., Defendants–Respondents. Smile Train, Inc., Plaintiff–Appellant, v. Ferris Consulting Corp., et al., Defendants. Brian Mullaney, Nonparty Respondent.

Kaye Scholer LLP, New York (Vincent A. Sama of counsel), for appellant. Peter Brown and Associates, New York (Peter Brown of counsel), for Ferris Consulting Corp. and Gregory Shaheen, respondents.



Kaye Scholer LLP, New York (Vincent A. Sama of counsel), for appellant. Peter Brown and Associates, New York (Peter Brown of counsel), for Ferris Consulting Corp. and Gregory Shaheen, respondents.
Kravet & Vogel, LLP, New York (Joseph A. Vogel of counsel), for Brian Mullaney, respondent.

SWEENY, J.P., ACOSTA, RENWICK, ANDRIAS, FREEDMAN, JJ.

Order, Supreme Court, New York County (Eileen Bransten, J.), entered February 25, 2013, which, to the extent appealed from, granted defendants' motion to dismiss the amended complaint pursuant to CPLR 3211 (a)(1), unanimously affirmed, without costs. Order, same court and Justice, entered September 16, 2013, which granted the motion of nonparty Brian Mullaney to quash plaintiff's subpoena, unanimously modified, on the law and in the exercise of discretion, to deny that motion but to grant his motion, in the alternative, for a protective order, to the extent of limiting discovery to defendants' allegedly poor performance of their contract with plaintiff prior to Mullaney's resignation as plaintiff's president in late October 2010, and as so modified, affirmed, without costs.

“[A]n agreement which modifies the Statute of Limitations by specifying a shorter, but reasonable, period within which to commence an action is enforceable provided it is in writing” ( John J. Kassner & Co. v. City of New York, 46 N.Y.2d 544, 551, 415 N.Y.S.2d 785, 389 N.E.2d 99 [1979] [internal citations omitted] ). In addition, it must not be “so vague and ambiguous that it is unenforcible” (Matter of Brown & Guenther [North Queensview Homes], 18 A.D.2d 327, 330, 239 N.Y.S.2d 482 [1st Dept.1963] ). Contrary to plaintiff's claim, section 18 of the contract between it and defendant Ferris Consulting Corp. is not so vague and ambiguous as to be unenforcible.

We also disagree with plaintiff's contention that section 18 does not apply to its claim for breach of the implied covenant of good faith and fair dealing. It is true that I.C.C. Metals v. Municipal Warehouse Co. 50 N.Y.2d 657, 431 N.Y.S.2d 372, 409 N.E.2d 849 (1980) says that a party may not limit its liability for an intentional tort ( see id. at 663, 431 N.Y.S.2d 372, 409 N.E.2d 849). However, breach of the implied covenant of good faith and fair dealing is not a tort; rather, it “is a contract claim” ( Deloitte [Cayman] Corporate Recovery Servs., Ltd. v. Sandalwood Debt Fund A, LP, 31 Misc.3d 1225[A], *3, 2011 WL 1833282 [Sup.Ct., N.Y. County];see also Canstar v. Jones Constr. Co., 212 A.D.2d 452, 453, 622 N.Y.S.2d 730 [1st Dept.1995] [“a breach of an implied covenant of good faith and fair dealing is intrinsically tied to the damages allegedly resulting from a breach of the contract”] ). A claim for “breach of the implied covenant of good faith and fair dealing ... may not be used as a substitute for a nonviable claim of breach of contract” ( Sheth v. New York Life Ins. Co., 273 A.D.2d 72, 73, 709 N.Y.S.2d 74 [1st Dept.2000] ). It would be anomalous if plaintiff's contract claim were subject to a three-month statute of limitations but its claim for breach of the implied covenant were not.

Plaintiff does not contend that the shortened statute of limitations is inapplicable to its claims for breach of fiduciary duty and aiding and abetting breach of fiduciary duty. In any event, its aiding and abetting claim is inadequately pled ( see Bullmore v. Ernst & Young Cayman Is., 45 A.D.3d 461, 464, 846 N.Y.S.2d 145 [1st Dept.2007];Brasseur v. Speranza, 21 A.D.3d 297, 299, 800 N.Y.S.2d 669 [1st Dept.2005] ).

The motion court did not have the benefit of Matter of Kapon v. Koch, 23 N.Y.3d 32, ––– N.Y.S.2d ––––, ––– N.E.2d ––––, 2014 N.Y. Slip Op. 2327, 2014 WL 1315590 (Apr. 3, 2014) when it decided Mullaney's motion to quash plaintiff's subpoena or, in the alternative, for a protective order. The Court of Appeals has rejected the argument “that CPLR 3101(a) contains distinctions between disclosure required of parties and nonparties” ( id. at *3) and has said that CPLR “3101(a)(4) imposes no requirement that the subpoenaing party demonstrate that it cannot obtain the requested disclosure from any other source” ( id. at *5).

Even under Kapon, plaintiff is not entitled to discovery from Mullaney about its allegedly converted donor list: its conversion claim is limited to its network credentials and back-up tapes, and the donor list relates to its dismissed claims. However, in light of Kapon, plaintiff is entitled to discovery from Mullaney about defendants' allegedly poor performance of their contract with plaintiff prior to Mullaney's resignation as plaintiff's president in late October 2010.


Summaries of

Smile Train, Inc. v. Ferris Consulting Corp.

Supreme Court, Appellate Division, First Department, New York.
May 27, 2014
117 A.D.3d 629 (N.Y. App. Div. 2014)

stating a contractual provision shortening time for filing claim must "not be so vague and ambiguous that it is unenforcible"

Summary of this case from CDG Int'l Corp. v. Q Capital Strategies, LLC

applying a contractually shortened statute of limitations

Summary of this case from Barrie House Coffee Co. v. Teampac, LLC
Case details for

Smile Train, Inc. v. Ferris Consulting Corp.

Case Details

Full title:SMILE TRAIN, INC., Plaintiff–Appellant, v. FERRIS CONSULTING CORP., et…

Court:Supreme Court, Appellate Division, First Department, New York.

Date published: May 27, 2014

Citations

117 A.D.3d 629 (N.Y. App. Div. 2014)
117 A.D.3d 629
2014 N.Y. Slip Op. 3785

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