New York Court Refuses to Apply Six-Year Statute of Limitations, Despite Architect's Failure to Comply with the Terms and Conditions of a Contract
The New York Court of Appeals held in Kliment v. McKinsey, 3 N.Y.3d 538, 2004 N.Y.Slip Op 09319 (2004), that while an architect’s failure to comply with the building code may have been a “particular bargained-for result,” that result is not inconsistent with the architect’s ordinary professional obligations for statute of limitations purposes pursuant to CPLR 214(6). In Kliment, the Court held that ordinary professional obligations which are contained in a contract will not remove a claim from the realm of negligence, nor convert the claim from malpractice to contract. Kliment, at 543.
CPLR 214 (6) states that “an action to recover damages for malpractice, other than medical, dental or podiatric malpractice, regardless of whether the underlying theory is based in contract or tort” is subject to a three-year statute of limitations. The Legislature specifically amended this statute in 1996 to counteract the effect of decisions by the courts that “abrogat[ed] and circumvent[ed] the original legislative intent” by allowing actions that were technically malpractice actions to proceed under a six-year contract statute of limitations. Id. at 541.
Kliment involved an architectural and interior design contract between McKinsey & Company, Inc. (“McKinsey”) and R.M. Kliment & Frances Halsband (“K&H”). Pursuant to the terms of the contract, K&H agreed to perform architectural and interior design services in connection with 13,000-plus square feet of office space McKinsey had leased in Stamford, Connecticut. The parties agreed that disputes arising from the contract will be subject to arbitration. Upon K&H’s completion of the project, the Stamford Building Department issued a certificate of occupancy for the premises, dated November 3, 1998. However, four years later, McKinsey claimed K&H failed to provide fire protection in compliance with the Connecticut Building Code and as specified in the parties’ agreement, and that McKinsey was required to install fire protection at its own expense. Id. at 540.
In April, 2002, four years after substantial completion of the project, McKinsey submitted a demand for arbitration. K&H responded by commencing an article 75 special proceeding for a permanent stay of arbitration, arguing that the claim was barred by the CPLR 214(6) three-year statute of limitations for non-medical malpractice actions. The trial court denied the petition, finding that McKinsey’s claim was for breach of contract rather than malpractice because the architect failed to perform a contractual obligation. The trial court determined that the claim was timely under the CPLR 213(2) six-year contract statute of limitations and directed the parties to proceed to arbitration. Id. The Appellate Division reversed, stating that “whether petitioner’s alleged failure to comply with the applicable code provisions was a breach of contract or tortious in nature is immaterial for statute of limitations purposes, since the resulting noncompliance is the same, as is the remedy sought.” Id. at 541.
McKinsey sought leave to appeal and certiorari was granted by the Court of Appeals. The Court of Appeals affirmed stating “[a]llowing this claim to proceed would accomplish the precise result the Legislature sought to prevent - - allowing what is essentially a malpractice claim to be couched in breach of contract terms in order to benefit from the six-year statute of limitations.” McKinsey’s claim is fundamentally a claim that K&H failed to perform services in a professional, non-negligent manner by neglecting to comply with the relevant building codes as promised in the agreement. As a result, the claim is barred by CPLR 214 (6). Id. at 543.
The Court of Appeals has taken a hard-line approach to restore symmetry to the period in which all professionals will remain exposed to malpractice suits. As a result of the Court of Appeals decision in Kliment, parties entering into contracts with non-medical professionals should act quickly in determining the viability of any potential claim they may have against these professionals despite the existence of a contract. Plaintiff’s attorneys and insurers should keep the Kliment decision in mind when exploring available means to recover damages related to a parties’ failure to perform “ordinary professional obligations,” as their window of opportunity will not extend beyond three years. Similarly, in light of Kliment, defense attorneys will do their clients a great service in aggressively moving for summary judgment where the sole claim, or cause of action, against their non-medical professional client is beyond the reach of CPLR 214(6). •