Source: http://blog.wcmlaw.com/tag/statute-of-limitations/
Timestamp: 2019-04-25 07:48:57+00:00

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Plaintiffs attempting to circumvent an intentional tort’s short statute of limitations by reframing it as a negligence action was recently addressed in the July 5, 2018 Third Department decision, McCarthy v. Mario Enterprises, 2018 NY Slip Op 05006, where a lower court’s dismissal of a plaintiff’s concealed intentional tort claim’s dismissal was affirmed, while the lower court’s dismissal of the hiring and supervising was reversed.
In McCarthy, an employee bouncer punched a person in the face causing injuries. More than two years later, plaintiff commenced an action against the bouncer and the entities that operated the bar and employed the bouncer. Plaintiff’s complaint alleged a breach of duty to keep the premises safe and the negligent hiring, supervising, or retaining of the employees. Defendants filed a pre-answer motion to dismiss the complaint which was granted by the lower court. Plaintiff only appealed as to the operator of the bar and the employer of the bouncer.
The 3rd Department affirmed the dismissal of the claim to keep the premises safe, but reversed the claim for negligent hiring, supervising, or retaining the employee. In doing so, the 3rd Department reasoned that plaintiff’s breach of duty to keep the premises safe, as already separately alleging negligent hiring and supervising claims, was a reframing of the employee’s intentional tort as a negligent tort to circumvent the statute of limitations. As such, the claim was filed past the statute of limitations and the lower court’s dismissal as to this part was affirmed.
However, the Third Department ruled that the negligence of an employer was not transformed into intentional conduct simply because an employee’s conduct was intentional. As such, the three year statute of limitation still applied. The operator and employer could still be held liable for negligently hiring, supervising, or retaining an employee despite knowing or should have knowing the employee’s propensity to assault or intentionally inflict harm on others. As such, the lower court’s dismissal as to the negligent hiring, supervising, or retaining of an employee was reversed.
Despite the reversal of the negligent hiring, supervising, or retaining dismissal, the ruling in McCarthy v. Mario Enterprises, Inc. affirmed a powerful tool of defense counsel. According to McCarthy, smart, aggressive defense counsel may dismiss a plaintiff’s late-filed intentional torts, reframed as negligence actions. Such a strategy when taken may lower an employer and their insurer’s exposure, as well as their legal costs, by simplifying the plaintiff’s action for discovery, motion practice, appeals, and trial. Thanks to Jonathan Pincus for his contribution to this post. Please email Vincent Terrasi with any questions.
In Contact Chiropractic, P.C. v. New York City Transit Authority, the Court of Appeals, the highest Court in NY, tackled the split between the First and Second Departments regarding the statute of limitations in no-fault claims. In 2001, Girtha Butler was injured as a passenger on a bus owned by the New York City Transit Authority. NYCTA did not have no-fault coverage, but was self-insured with respect to that risk. Contact Chiropractic provided medical treatment to Butler and she assigned to them her right to recover first-party benefits from NYCTA. Contact Chiropractic submitted its claims to NYCTA from March 14, 2001 – August 27, 2001. On January 8, 2007, plaintiff commenced an action seeking reimbursement for outstanding invoices under CPLR §213 (2) which establishes a six-year period of limitations for an action based upon contractual obligation or liability.
NYCTA moved for dismissal under CPLR §214 (2) which applies a three-year statute of limitations to actions to recover upon a liability created or imposed by a statute because NYCTA is self-insured. NYCTA relied on the First Department case of M.N. Dental Diagnostics, PC v. NYCTA which stated that the obligation to provide no-fault benefits arises out of the no-fault statute and as such, the three-year statute of limitations applies. Contact Chiropractic opposed based on the Second Department case of Matter of ELRAC, Inc. v. Suero which stated that while an injured person’s claims for benefits are statutorily mandated, they arise out of an insurance contract and as such, are subject to the six-year statute of limitations. The Court of Appeals resolved the split in authority in favor of the First Department and held that self-insured entities are bound by a three, not six, year statute of limitations.
In matters involving no-fault claims against insurance companies liable for no-fault benefits due to the issuance of an insurance policy, the six-year statute of limitations still applies. This is a critical distinction among those of us who deal in No Fault or PIP law from time to time. Thanks to Mehreen Hyatt for her contribution to this post. Please email Brian Gibbons with any questions.

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