In Ely-Cruikshank Co. v. Bank of Montreal. 81 N.Y.2d 399, 615 N.E.2d 985, 599 N.Y.S.2d 501 (1993), the plaintiff, a real estate broker, signed a brokerage agreement with the defendant bank in 1980. Id. at 401.
The agreement stated in part that all negotiations regarding the lease of a particular building would be "conducted by or under the direction of the plaintiff. Id. at 401.
The defendant lawfully terminated the agreement on November 30, 1983, and sold the building without the participation of the plaintiff on February 1, 1984. Id. at 402.
On January 26, 1990, the plaintiff sued for breach of contract, alleging that the defendant had secretly negotiated the building sale prior to terminating the agreement and thus deprived the plaintiff of its right to negotiate and earn a commission pursuant to the contract. Id. at 402.
The defendant moved to dismiss, in part, on the grounds that the action was barred by the six-year statute of limitations. Id. at 401.
In its analysis, the Court of Appeals noted that the plaintiff did not--and could not--allege that the sale of the building itself constituted a breach of the parties' contract, since the sale occurred after the contract was terminated. Ely-Cruikshank Co., 81 N.Y.2d. at 402.
Furthermore, the contract granted the plaintiff rights to a commission for the lease of the building, not its sale. Id. at 402.
Given these facts, the Court concluded that "the alleged breach, if any, occurred when the bank purportedly failed to reveal its preliminary discussions with the buyer prior to termination of the brokerage agreement." Id. at 403.
Because the alleged breach thus occurred prior to the November 30, 1983 contract. termination--more than six years prior to initiation of the suit--the Court concluded that 'the claim was barred by the six-year statute of limitations, regardless of the actual date of the building's sale. Id. at 404.