Henry v. Bank of Am.

• Decision Date: 23 February 2017
• Citation: 48 N.Y.S.3d 67,147 A.D.3d 599
• Parties: Jonathan M. HENRY, Plaintiff–Appellant, v. BANK OF AMERICA, et al., Defendants–Respondents.
• Court: New York Supreme Court — Appellate Division

147 A.D.3d 599

48 N.Y.S.3d 67

Jonathan M. HENRY, Plaintiff–Appellant,

v.BANK OF AMERICA, et al., Defendants–Respondents.

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

Feb. 23, 2017.

Henry & Regan–Henry, White Plains (John V. Henry of counsel), for appellant.

Goodwin Procter LLP, New York (Lindsay E. Hoyle of counsel), for respondents.

MAZZARELLI, J.P., ANDRIAS, SAXE, FEINMAN, GISCHE, JJ.

Order, Supreme Court, New York County (Anil C. Singh, J.), entered on or about May 8, 2015, which, to the extent appealed from, granted defendants' motion to dismiss as time-barred the causes of action for statutory fraud, common-law fraud, breach of the covenant of good faith and fair dealing, breach of fiduciary duty, and unconscionability, unanimously affirmed, without costs.

Plaintiff was enrolled in defendants' Credit Protection Plan (CPP) on March 8, 2001 and their Privacy Assist Service (PAS) program in March 2007.¹ HE WAS BILLED FOR the services in his monthly account statements. on March 6, 2009, when plaintiff advised defendants of his dire financial situation and unemployment since on or about November 17, 2007, defendants enrolled plaintiff in a less expensive CPP program that provided lesser benefits.

Plaintiff closed his credit card account on June 14, 2010. CPP and PAS fees plus interest and penalties were included in plaintiff's account balance which reached $29,246.06 as of approximately February 7, 2011. On May 31, 2013, defendants issued a refund check to plaintiff for PAS fees improperly charged during the period of March 2007–November 2008, when no PAS services were actually provided.

On August 27, 2014, plaintiff, alleging that he was enrolled in the two optional credit card products without his consent, for which he received no benefit, commenced this action seeking, inter alia, compensatory and punitive damages. Plaintiff asserts that he became aware of defendant's scheme in or about November/December 2012 when he was advised of a California CPP class action, and on May 31, 2013 when he was informed by defendants that he had been charged PAS fees for which he received no services.²

Supreme Court granted defendants' motion to dismiss as time barred the first (Delaware Consumer Fraud Act), second (New York Consumer Fraud and General Business Law statutes), and seventh (breach of fiduciary duty) causes of actions, governed by a three-year statute of limitations, and the third (common law fraud), fifth (breach of covenant of good faith and fair dealing), and eighth (unconscionability) causes of action, governed by a six-year statute of limitations.³ We now affirm.

The subject causes of action accrued either in March 2001, when defendants allegedly enrolled plaintiff without his consent in the CPP, or in March 2007, when they allegedly enrolled him without his consent in the PAS program, more than six years before the commencement of this action in 2014 (see State ex rel. Brady v. Pettinaro Enters., 870 A.2d 513, 526, ––– N.Y.S.3d –––– [Del.Ch.2005] ; Gaidon v. Guardian Life Ins. Co. of Am., 96 N.Y.2d 201, 210, 727 N.Y.S.2d 30, 750 N.E.2d 1078 [2001] ).

Plaintiff's reliance on the continuing wrong doctrine to toll the limitations periods is misplaced. The continuous wrong doctrine is an exception to the general rule that the statute of limitations " ‘runs from the time of the breach though no damage occurs until later’ " ( Ely–Cruikshank Co. v. Bank of Montreal, 81 N.Y.2d 399, 402, 599 N.Y.S.2d 501, 615 N.E.2d 985 [1993] ). The doctrine "is usually employed where there is a series of continuing wrongs and serves to toll the running of a period of limitations to the date of the commission of the last wrongful act" (Selkirk v. State, 249 A.D.2d 818, 819, 671 N.Y.S.2d 824 [3d Dept.1998] ). Where applicable, the doctrine will save all claims for recovery of damages but only to the extent of wrongs committed within the applicable statute of limitations (see Jensen v. General Elec. Co., 82 N.Y.2d 77, 83–85, 88, 603 N.Y.S.2d 420, 623 N.E.2d 547 [1993] ; Sutton Inv. Corp. v. City of Syracuse, 48 A.D.3d 1141, 1143, 853 N.Y.S.2d 233 [4th Dept.2008], lv. dismissed 10 N.Y.3d 858, 859 N.Y.S.2d 619, 889 N.E.2d 497 [2008] ).

The doctrine "may only be predicated on continuing unlawful acts and not on the continuing effects of earlier unlawful conduct. The distinction is between a single wrong that has continuing effects and a series of independent, distinct wrongs" (Doukas v. Ballard, 39 Misc.3d 1227(A), 2013 WL 2129137 [Sup.Ct., New York County 2013] ; see also Roslyn Sav. Bank v. National Westminster Bank USA, 266 A.D.2d 272, 699 N.Y.S.2d 421 [2d Dept.1999] ). The doctrine is inapplicable where there is one tortious act complained of since the cause of action accrues in those cases at the time that the wrongful act first injured plaintiff and it does not change as a result of " ‘continuing consequential damages' " (Town of Oyster Bay v. Lizza Indus., Inc., 22 N.Y.3d 1024, 1032, 981 N.Y.S.2d 643, 4 N.E.3d 944 [2013] ; see also Quintana v. Wiener, 717 F.Supp. 77, 80 [S.D.N.Y.1989] ). In contract actions, the doctrine is applied to extend the statute of limitations when the contract imposes a continuing duty on the breaching party (see Bulova Watch Co. v. Celotex Corp., 46 N.Y.2d 606, 611, 415 N.Y.S.2d 817, 389 N.E.2d 130 [1979] ; Meadowbrook Farms Homeowners Assn., Inc. v. JZG Resources, Inc., 105 A.D.3d 820, 822, 963 N.Y.S.2d 300 [2d Dept.2013], lv. dismissed 21 N.Y.3d 1024, 972 N.Y.S.2d 209, 995 N.E.2d 171 [2013] ; King v. 870 Riverside Dr. Hous. Dev. Fund Corp., 74 A.D.3d 494, 496, 902 N.Y.S.2d 86 [1st Dept.2010] ). Thus, where a plaintiff asserts a single breach-with damages increasing as the breach continued-the continuing wrong theory does not apply (see Kahn v. Kohlberg, Kravis, Roberts & Co., 970 F.2d 1030, 1041 [2d Cir.1992], cert. denied 506 U.S. 986, 113 S.Ct. 494, 121 L.Ed.2d...