Second Department Declines to Apply the Continuing Wrong Doctrine in Breach of Contract Action

By: Jonathan H. Freiberger

As discussed previously in this BLOG, and most recently in “You Can’t Always Waive Bye-Bye to Statutes of Limitations,” statutes of limitation govern the time in which a cause of action must be interposed after accrual. Article 2 of the CPLR addresses statute of limitations issues in New York. Section 201 of the CPLR provides that “[a]n action … must be commenced within the time specified in this article unless a different time is prescribed by law or a shorter time is prescribed by written agreement. No court shall extend the time limited by law for the commencement of an action.” Prior to the enactment of the statutes of limitation “there was no fixed time for the bringing of an action [and p]ersonal actions were merely confined to the joint lifetimes of the parties.” Flanagan v. Mount Eden General Hospital, 24 N.Y.2d 427, 429) (1969). “The Statute of Limitations was enacted to afford protection to defendants against defending stale claims after a reasonable period of time had elapsed during which a person of ordinary diligence would bring an action. The statutes embody an important policy of giving repose to human affairs.” Flanagan, 24 N.Y.2d at 429 (citation omitted). Generally, statutes of limitation “begin[] to accrue when a cause of action accrues or, in other words, when all of the facts necessary to the cause of action have occurred so that the party would be entitled to obtain relief in court.” QK Healthcare, Inc. v. InSource, Inc., 108 A.D.3d 56, 66 (2d Dept. 2013) (citations and internal quotation marks omitted); see also North Shore Cent. School Dist. v. Glen Cove School District, 236 A.D.3d 806, 811 (2d Dept. 2025).

As relevant to today’s article, both breach of contract and breach of the implied covenant of good faith and fair dealing causes of action are governed by a six-year statute of limitations and each accrues at the time of the respective breaches. See, e.g., New York Bus Operators Compensation Trust v. American Home Assurance Co., 241 A.D.3d 563, 566-67 (2d Dept. 2025) (as to breach of contract); Frydman v. Endurance American Ins. Co., 253 A.D.3d 848, 850 (2d Dept. 2025) (as to good faith and fair dealing).

While there are several ways in which a limitations period can be tolled, today’s article relates solely to the continuing wrong doctrine (the “Doctrine”), an exception to the general rule that limitations periods begin to run from the date of accrual of a cause of action. This BLOG has previously addressed the continuing wrong doctrine. See, e.g., “Continuing Wrong Doctrine Found Not Applicable to Toll the Limitations Period for Fraud and Other Causes of Action.” The 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” and “may only be predicated on continuing unlawful acts and not on the continuing effects of earlier unlawful conduct.” Henry v. Bank of America, 147 A.D.3d 599, 601 (1st Dept. 2017) (citations and internal quotation marks omitted). The Doctrine is applied in contract actions “when the contract imposes a continuing duty on the breaching party.” Id. (Citations omitted.)

These issues were addressed in Coyle v. JPMorgan Chase Bank, N.A., a case decided on July 8, 2026, by the Appellate Division, Second Department. The plaintiff in Coyle borrowed money from the lender and secured the repayment obligations with a mortgage on real property. The lender declared a default in 2014, which the borrower claims was in error. In 2015 and 2018, the borrower received notices from the lender that the loan was in default, that it was advancing funds for taxes, that escrows were going to increase and/or warning that it intended to commence foreclosure proceedings. The lender refused to accept installment payments from the borrower.

In 2018, the lender commenced a mortgage foreclosure action (the “First Foreclosure Action”). Subsequently, the lender recognized its error in declaring the default and undertook corrective measures. The Court, in 2020, ultimately discontinued the First Foreclosure Action. Later in 2020, the lender commenced a new foreclosure action based on new alleged defaults that occurred earlier that year (the “Second Foreclosure Action”).

During the pendency of the Second Foreclosure Action, the borrower commenced an action against the lender for breach of contract and breach of the implied covenant of good faith and fair dealing predicated on the erroneous default declaration from 2014 (the “Contract Action”). The lender moved to dismiss the Contract Action on, inter alia, statute of limitation grounds as the asserted causes of action accrued in 2014 -- more than six years prior to the commencement of the Contract Action. In opposition to the lender’s prima facie case that the applicable limitations period expired, the borrower argued that the limitations period was tolled by virtue of the application of the continuing wrong doctrine. The motion court granted the lender’s motion and the borrower appealed.

In affirming the motion court’s rejection of the borrower’s continuing wrong doctrine argument, the Court stated:

Contrary to the [borrower]'s contention, the untimeliness of the breach of contract and breach of the implied covenant of good faith and fair dealing causes of action is not cured by tolling under the continuing wrong doctrine. The continuing wrong 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. The doctrine allows only tolling 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. Here, the [borrower]'s allegations amount to a single wrong that has continuing effects.

Citations and internal quotation marks omitted.

Jonathan H. Freiberger is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes and is not intended to be and should not be taken as legal advice.