2138747 Ontario, Inc. v Samsung C&T Corp. (
| 2138747 Ontario, Inc. v Samsung C&T Corp. |
| June 12, 2018 |
| Fahey, J. |
| Court of Appeals |
| Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. |
| As corrected through Wednesday, August 15, 2018 |
[*1]
| 2138747 Ontario, Inc., Appellant, v Samsung C&T Corporation et al., Respondents. |
Argued April 24, 2018; decided June 12, 2018
2138747 Ontario, Inc. v Samsung C&T Corp.,
On this appeal, we must determine whether CPLR 202—New York's borrowing statute—applies when contracting parties have agreed that their contract would be "enforced" according to New York law. We conclude that it does.{**
In September 2008, SkyPower Corp., an Ontario renewable energy developer, entered into a nondisclosure agreement (NDA) with defendants to facilitate defendants' evaluation of a potential transaction with SkyPower and its majority shareholder. The NDA allowed defendants to review SkyPower's confidential and proprietary information and contained provisions restricting the use and disclosure of that information, as well as provisions regarding destruction of the information furnished to defendants if they did not wish to proceed with the transaction.
[*2]The anticipated transaction never materialized. Plaintiff alleges that in December 2008, defendants entered into a "Memorandum of Understanding" with the Ontario government for development of a renewable energy project that improperly made use of SkyPower's confidential and proprietary information, and that in September 2009 defendants signed a "Framework Agreement" with the Ontario government for the project. SkyPower filed for bankruptcy in 2009, and SkyPower's claims against defendants were assigned to plaintiff, a creditor of SkyPower's successor and also an Ontario corporation. Plaintiff commenced the present action in state court in New York, asserting causes of action for breach of contract and unjust enrichment, in October 2014.
Defendants moved to dismiss the complaint, arguing, as relevant here, that plaintiff's action was time-barred pursuant to Ontario's two-year statute of limitations (see Ontario Limitations Act, 2002, SO 2002, ch 24, schedule B, § 4), which applied pursuant to CPLR 202, New York's borrowing statute. New York's general statute of limitations for breach of contract actions is six years (see CPLR 213 [2]). Supreme Court concluded that plaintiff's claims accrued on September 26, 2009, and the parties do not challenge that determination here. Thus, the parties agree that if the six-year statute of limitations provided in CPLR 213 (2) applies, then plaintiff's action is timely, but if Ontario's two-year statute of limitations applies pursuant to CPLR 202, the action must be dismissed as time-barred. Defendants contend that New York's borrowing statute, CPLR 202, requires application of Ontario's shorter limitations period. Plaintiff, by contrast, contends that the choice-of-law provision in the NDA requires the conclusion that the parties intended to preclude application of CPLR 202 and instead apply{**
The NDA contained the following choice-of-law provision:
"This Agreement shall be governed by, construed and enforced in accordance with the laws of the State of New York. You hereby irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the courts of the State of New York and of the United States District Courts located in the County of New York for any lawsuits, actions or other proceedings arising out of or relating to this Agreement and agree not to commence any such lawsuit, action or other proceeding except in such courts. . . . You hereby irrevocably and unconditionally waive any objection to the laying of venue of any lawsuit, action or other proceeding arising out of or relating to this Agreement in the courts of the State of New York or the United States District Courts located in the County of New York, and hereby further irrevocably and unconditionally waive and agree not to plead or claim in any such court that any such lawsuit, action or other proceeding brought in any such court has been brought in an inconvenient forum."
Supreme Court dismissed plaintiff's claims asserted on SkyPower's behalf as time-barred (
CPLR 202 provides:
"An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued, except that where the cause{**[*3]31 NY3d at 377} of action accrued in favor of a resident of the state the time limited by the laws of the state shall apply."
In other words, "[w]hen a nonresident sues on a cause of action accruing outside New York, CPLR 202 requires the cause of action to be timely under the limitation periods of both New York and the jurisdiction where the cause of action accrued" (Global Fin. Corp. v Triarc Corp.,
We begin with the "fundamental, neutral precept of contract interpretation . . . that agreements are construed in accord with the parties' intent," and "[t]he best evidence of what parties to a written agreement intend is what they say in their writing" (Greenfield v Philles Records,
Contractual "[c]hoice of law provisions typically apply to only substantive issues . . . and statutes of limitations are considered 'procedural' because they are deemed 'as pertaining to the remedy rather than the right' " (Portfolio Recovery Assoc., LLC v King,
{**
It is undisputed that had the NDA's choice-of-law provision incorporated only New York substantive law and contained a New York forum selection clause, New York would apply its own procedural law as the law of the forum (see Tanges,
Plaintiff argues that because the contract in this case specified that it would be "enforced" according to New York law, the parties intended to apply New York's procedural law except for its statutory choice-of-law provisions, which, plaintiff alleges, includes CPLR 202. We conclude, however, that the mere addition of the word "enforced" to the NDA's choice-of-law provision does not demonstrate the intent of the contracting parties to apply solely New York's six-year statute of limitations in CPLR 213 (2) to the exclusion of CPLR 202. Rather, the parties have agreed that the use of the word "enforced" evinces the parties' intent to apply New York's procedural law. CPLR 202 is part of that procedural law, and the statute therefore applies here.{**
Our decision in Ministers & Missionaries does not require a contrary conclusion. That case represented an extension of our decision in IRB-Brasil Resseguros, S.A. v Inepar Invs., S.A. (
"New York's common-law conflict-of-laws principles should not apply when the parties have chosen New York law to govern their dispute . . . and EPTL 3-5.1 (b) (2) simply represents a common-law conflicts principle that has been codified into statute, that provision should not be considered in resolving this dispute" (id. at 474).
CPLR 202, however, differs from the statutory choice-of-law directive at issue in Ministers & Missionaries. Inasmuch as earlier iterations of CPLR 202 predate our current common-law conflicts approaches, we have recognized a "significant difference" between those common-law conflicts principles and a statute of limitations issue governed by the CPLR, including CPLR 202 (see Global Fin. Corp.,
In addition, IRB-Brasil and Ministers & Missionaries each involved a contractual choice-of-law provision that chose only New York's substantive law. The Court considered the extent to which common-law or statutory principles that refer to the substantive law of another jurisdiction should apply in light of that choice. Those cases did not consider a contractual choice-of-law provision that involved a choice of procedural law, or the boundaries of contracting parties' ability to preclude application of certain of New York's procedural laws in an action brought in New York courts.
We further disagree with plaintiff that it is irrational to conclude that the contracting parties may have intended for CPLR 202 to apply. As explained, the borrowing statute is a stable fixture of New York's procedural [*5]law, of which these sophisticated commercial entities were presumably aware when they chose New York's procedural law to govern their arrangement. Notably, the NDA was signed in 2008, several years before we decided Ministers & Missionaries and therefore before the phrase "statutory choice-of-law directive" entered our vocabulary. It is therefore reasonable to conclude that the parties may have intended for CPLR 202 to apply, perhaps for strategic reasons, or because they did not think at the time that it was possible to contract around the application of statutes they believed to be statutory choice-of-law directives, or otherwise.{**
Furthermore, although "in the instant case, forum-shopping is not a consideration, since the parties in their agreement have designated New York as their forum of choice," we have stated that discouraging forum shopping is not the statute's "only purpose" (Insurance Co. of N. Am.,
In short, where a contract "was negotiated between sophisticated, counseled business people negotiating at arm's length," courts should be especially "reluctant to interpret an agreement as impliedly stating something which the parties have neglected to specifically include" (Vermont Teddy Bear Co. v 538 Madison Realty Co.,
Inasmuch as the NDA did not expressly provide that disputes arising from the agreement would be governed by New York's six-year statute of limitations, or otherwise include language that expressed a clear intent to preclude application of CPLR 202, we, like the Appellate Division, have no occasion to address whether enforcement of such a contractual provision would run afoul of CPLR 201 or General Obligations Law § 17-103, or would otherwise violate New York's public policy against contractual extensions of the statute of limitations before accrual of the cause of action (see generally John J. Kassner & Co. v City of New York,
Accordingly, the stipulation appealed from and the Appellate Division order brought up for review should be affirmed, with costs.{**
Chief Judge DiFiore and Judges Rivera, Stein, Wilson and Feinman concur; Judge Garcia taking no part.
Stipulation appealed from, and Appellate Division order brought up for review, affirmed, with costs.
Footnote 1:Although statutes enacted in derogation of the common law must be strictly construed (see Oden v Chemung County Indus. Dev. Agency,
Footnote 2:In that regard, we also have no occasion to opine on whether any resemblance between CPLR 202 and a "choice-of-law" directive, insofar as it directs the application of the law of another jurisdiction, may be relevant to that question.