On November 19, 2024, Justice Ruchelsman of the Kings County Commercial Division issued a decision in OTR Media Group, Inc. v. Vizible Media Group, LLC, 2024 NY Slip Op. 34117(U), rejecting the application of the continuing wrong doctrine and dismissing claims as untimely, explaining:
Although the lawsuit was filed more than six years from that date, the plaintiff asserts the action is timely because where there is a series of independent, distinct wrongs, like here, the statute of limitations runs from the last breach and, in the case of breach of contract claims, reaches back six years from the date of the filing of the complaint. That argument is based on the fact the defendant allegedly committed numerous wrongs that began in 2014 and continued through September 2022 which extended the statute of limitations. This continuing wrong doctrine is usually employed where there is a series of continuing acts years before the filing of the lawsuit and serves to toll the running of a period of limitations to the date of the commission of the last wrongful act. However, a distinction must be drawn between a single wrong that has continuing effects which does not extend the statute of limitations and a series of independent, distinct wrongs, which does extend the statute of limitations. The key determinant is whether a single breach occurred with accruing damages as the breach continues or whether each breach gives rise to a new cause of action. Thus, in Doukas v. Ballard, 135 AD3d 896, 24 NYS3d 174 [ 2d Dept., 2016] the court rejected the continuing wrong theory. In that case, in 1994 or 1995 Doukas agreed to invest in technology development with Ballard and he provided capital in exchange for a fifty percent interest in the company. In 2009 he sued Ballard alleging Ballard breached the contract and diverted the ownership interests to Ballard’s wholly owned companies. The plaintiff argued the continuing wrong doctrine applied because even at this date he was still being denied profits that were due. The court, citing earlier authority, held. the lawsuit time barred. The court explained that this case is not an example of continuing contractual breaches in which new and timely claims continue to arise. The acts of which the plaintiffs complain are alleged to have occurred during a discrete period of time in the late 1990’s and early 2000. It is irrelevant for purposes of the statute of limitations that the plaintiffs may continue to be damaged as a result of those acts. The Appellate Division affirmed holding that the breach of contract causes of action accrued, at the latest, in 2000, when a certain patent application submitted by Ballard was approved. Therefore, the breach of contract causes of action, asserted against the defendants in 2011, were time-barred. In Comm Trade USA, Inc., v. INTL FCStone, Inc., 2014 WL 787912 [S.D.N.Y. 2014] the court explained that the continuing wrong doctrine only applies where action can give rise to future damages which cannot be predicted at the time of the initial act. However, by contrast, assuming that a breach of the contract occurred, damages were apparent arid calculable once defendants refused to pay plaintiff for introductions that plaintiff claimed to have made. To the extent that plaintiff asserts simply an ongoing breach of the contract-with damages increasing as the breach continued-the continuing wrong theory does not apply.
However, the theory does apply where the contract requires continuing performance over a period of time. The continuing performance can take the form of payments due at certain intervals or any other continuing duty. For example, in Beller, the court applied the doctrine where a plaintiff sued alleging the defendant life insurance company breached the agreement by failing to conduct rate reviews every five years. The court explained that the subject insurance contract the subject insurance contract imposed a continuing duty upon the defendant to consider the factors comprising the cost of insurance before changing rates, and to review the cost of insurance rates at least once every five years to determine if a change should be made. Accordingly, the plaintiff’s claim for damages accrued each time the defendant allegedly breached these obligations, and only claims for damages accruing more than six years before the commencement of this action are time-barred. Clearly, in Beller, every five years a new breach occurred unrelated to any previous breach. Thus, the court properly applied the doctrine to extend the statute of limitations.
In this case, while the initial breach occurred when the defendant created a competing entity in 2014, the complaint alleges the defendant committed further breaches, in addition to the first wrong and extending the statute of limitations thereby. Thus, an examination of those breaches must be examined.
The only conduct allegedly committed within six years of the filing of the lawsuit consists of corporate renewals concerning the corporate entity that was formed in 2014. The nature of such corporate renewals is not really explained; however, the Complaint does not include any specific breach of the non-compete that occurred within six years of the filing of the complaint. While it is true that distinct conduct regarding a non-compete clause can fall under the continuing wrong doctrine, some continuing wrong must be alleged. Merely extending the corporate status of the entity is not a new wrong, it is simply a continuation of an existing wrong and relates back to the formation in 2014. It is true the complaint alleges Barnes sent emails which may have violated the non-compete and which may be independent of the formation of the entity in 2014. However, all those emails were sent more than six years before the filing of the lawsuit. As noted, the only activity within the requisite period is the extension of the corporate status. That is insufficient to constitute a continuing wrong.
Therefore, the continuing wrong doctrine is inapplicable and consequently the motion seeking to dismiss the breach of contract claim is granted.
(Internal quotations and citations omitted).