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Cause of Action Based Upon a Dispute About the Correct Rent-Increase Computation Accrues on the First Use of the Disputed Computational Methodology

The First Department determined a lawsuit stemming from a dispute about the proper rent computation in an ambiguous contract was time-barred. The lawsuit was started in 2009. However, the rent computation problem was apparent in 1999. That is when the statute of limitations started running and it does not start anew every year the problem persisted:

In Goldman Copeland [260 AD2d 370], this Court squarely held that a claim for breach of contract based on an allegedly erroneous computation of rent accrues upon the first use of that computational methodology, and the statute of limitations does not begin to run anew each time the same formula is used. * * *

Goldman Copeland is a precedent of this Court, and we adhere to it as a matter of stare decisis. Its holding applies to this case, as Tenant consistently paid, and Landlord accepted, rent based on two successive 50-cents-per-square-foot escalations from 1999 through 2009, when this action was commenced. Further, when the first rent escalation went into effect in late 1999, Landlord could have determined, through the use of simple arithmetic, that the lease’s rent illustrations for the initial 25-year term were not based on 10% increases. When Landlord subsequently discovered in 2001 that it had not been billing rent based on a 10% escalation since 1999, the discovery was not based on any information that Landlord had not possessed in 1999. K-Bay Plaza, LLC v Kmart Corp., 2015 NY Slip Op 07905, 1st Dept 10-29-15

 

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