Plaintiff, a non-resident of New York, filed a suit against Defendant in the United States District Court for the Southern District of New York alleging breach of contract for failure to pay consulting fees. The complaint was dismissed for lack of subject matter jurisdiction and Plaintiff filed a similar suit in the Supreme Court of New York County.
Plaintiff argued that the cause of action accrued in New York State because most of the events relating to the contract - including negotiations, execution, performance and breach - occurred in New York.
Defendant argued that under N.Y. C.P.L.R. 202 the cause of action accrued in either Delaware, Plaintiff's state of incorporation, or in Pennsylvania, Plaintiff's principal place of business. In both states, the Plaintiff's claims would have been time barred by the Statute of Limitations.
The New York Supreme Court held that the Plaintiff's cause of action accrued at the place of injury, where Plaintiff resides or is incorporated. This place of injury is where the economic loss was sustained or where the injury occurred. The Appellate Division affirmed.
The Court granted leave to appeal to resolve this issue of first impression. The Court determined that according to the generally accepted meaning of "accrued" under N.Y. C.P.L.R. Article 2, a cause of action accrues in the place of injury. In cases of pure economic loss, this is usually where the plaintiff resides because that is where the loss is felt.
A non-resident plaintiff's cause of action for breach of contract or quantum meruit accrues at the place where the injury occurred. For economic claims, this is usually the place where Plaintiff resides and sustains the economic impact of the loss.
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