On December 9, 2022, Justice Cohen of the New York County Commercial Division issued a decision in Nelson Bros. W. Seneca, LLC v. Kaplan, 2022 NY Slip Op. 34240(U), holding that a pre-breach agreement to waive the statute of limitations is unenforceable, explaining:
The Premier Closing Note provides “[t]he right to plead any and all statutes of limitation as a defense to any demand on this Note is expressly waived by Maker and all sureties, guarantors and endorsers hereof to the full extent permitted by law.” The Note is governed by New York law. Relevant here, General Obligations Law § 17-103 provides, in relevant part:
(1) A promise … not to plead the statute of limitation applicable to an action arising out of a contract. . . if made after the accrual of the cause of action and made, either with or without consideration, in a writing signed by the promisor or his agent is effective, according to its terms, to prevent interposition of the defense of the statute of limitation 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.
(3) A promise to waive, to extend, or not to plead the statute of limitation has no effect to extend the time limited by statute for commencement of an action or proceeding for any greater time or in any other manner than that provided in this section, or unless made as provided in this section.
Defendants do not dispute that the Premier Closing Note’s waiver of the statute of limitations defense does not comply with Section 17-103 and that Plaintiffs therefore may assert a statute of limitations defense.
(Internal quotations and citations omitted).