Continuing Wrong Doctrine Found Not Applicable To Toll The Limitations Period For Fraud And Other Causes of Action

• Posted on: May 4 2025

By: Jeffrey M. Haber

In Tiburcio v. Grant Ave. Bronx Realty Corp., 2025 N.Y. Slip Op. 02669 (1st Dept. May 01, 2025) (here), the Appellate Division, First Department was asked to decide whether the statute of limitations expired on all causes of action alleged by the plaintiff or whether the continuing wrong doctrine applied to toll the applicable limitations periods. As discussed below, the Court held that the continuing wrong doctrine to did not apply to save the complaint from dismissal.

The continuous wrong doctrine is an exception to the general rule that the statute of limitations runs from the date a cause of action accrues.[1] The 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.”[2] Where applicable, the doctrine will save all claims for recovery of damages but only to the extent of wrongs committed within the applicable statute of limitations.[3]

The doctrine “may only be 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.”[4] The doctrine is inapplicable where there is one tortious act complained of since the cause of action accrues in those cases at the time that the wrongful act first injured plaintiff and it does not change as a result of “‘continuing consequential damages.’”.[5] In contract actions, the doctrine is applied to extend the statute of limitations when the contract imposes a continuing duty on the breaching party.[6] Thus, where a plaintiff asserts a single breach—with damages increasing as the breach continued—the continuing wrong theory does not apply.[7]

[Eds. Note: this Blog has examined the continuing wrong doctrine on numerous occasions. E.g., here, here, here, and here. To find additional articles related to the continuing wrong doctrine, visit the “Blog” tile on our website and enter “continuing wrong” or “continuous wrong” in the “search” box.]

Tiburcio involved an alleged fraudulent conveyance of real property located in the Bronx, New York (the “Property”).

On March 26, 2014, the parties entered into a contract pursuant to which plaintiff transferred ownership of the Property to defendant for $559,000.00. The purchase price included the underlying remaining mortgage on the property of $534,000, as well as a $25,000 cash payment to the plaintiffs.

According to plaintiffs, defendant approached them in connection with a foreclosure proceeding that had commenced in January 14, 2014, and advised them that it would negotiate with plaintiffs’ lender on their behalf, locate a bona-fide purchaser who would buy the Property by way of short sale, and relieve plaintiffs of their obligation under the mortgage. All the foregoing representations, said plaintiffs, were memorized in the written purchase agreement.

Based on the alleged fraudulent representation that the mortgage would be paid off, plaintiffs transferred the deed to defendant, which plaintiffs allegedly believed was part of a standard short sale transaction. Consequently, on March 26, 2014, plaintiffs sold the Property to defendant for an additional $25,000.00 subject to the mortgage and all liens. The deed was recorded on April 11, 2014.

Plaintiffs alleged that they never received the $25,000 payment and did not receive any consideration for the execution of the deed. Plaintiffs maintained that their attempts to contact defendant regarding the short sale transaction went unanswered. Plaintiff alleged that defendant never had any intention of entering into a short sale agreement and only wanted to use the Property for its own enrichment. According to plaintiffs, they were notified in May 2016 that defendant failed to make payment towards the mortgage in violation of their agreement and, as such, another foreclosure action was commenced.

On July 22, 2016, plaintiffs filed a conversion action seeking to nullify and/or void the deed, asserting that it was fraudulently created because defendant never intended to pay the mortgage. On April 20, 2017, the lender/mortgage holder filed a foreclosure action on the Property and against plaintiffs.

Defendants moved to dismiss the complaint on the grounds that, inter alia, the statute of limitations expired on plaintiffs’ claims.[8] Plaintiff argued that defendant’s repeated failure to make the payment required under the purchase agreement and the ongoing prosecution of the foreclosure action constituted a “continuous wrong” that rendered all the causes of action asserted in the complaint timely.

The motion court granted defendant’s motion to dismiss. On appeal, the First Department unanimously affirmed.

[Eds. Note: the underlying facts of Tiburcio were taken from the motion court’s decision, the briefing on appeal, and the First Department’s decision and order.]

In a pithy decision, the Court held that “Supreme Court correctly determined that defendant’s alleged failure to pay off the mortgage, resulting in the 2017 foreclosure action, did not qualify as ‘a series of independent, distinct wrongs’ to toll the applicable statutes of limitations under the ‘continuous wrong doctrine’”.[9] The Court explained that the doctrine did not apply because there was only one tortious act complained of – that is, the causes of action (e.g., fraud, conversion, and breach of contract) accrued “at the time that the wrongful act first injured plaintiff” and did “not change as a result of ‘continuing consequential damages.’”[10] Accordingly, the Court held that plaintiffs’ claims were time-barred.

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Jeffrey M. Haber 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

[1] Ely-Cruikshank Co. v. Bank of Montreal, 81 N.Y.2d 399, 402 (1993).

[2] Henry v. Bank of Am., 147 A.D.3d 599, 601 (1st Dept. 2017); Selkirk v. State of New York, 249 A.D.2d 818, 819 (3d Dept. 1998).

[3]  Jensen v. General Elec. Co., 82 N.Y.2d 77, 83-85, 88 (1993); Sutton Investing Corp. v. City of Syracuse, 48 A.D.3d 1141, 1143 (4th Dept. 2008), lv. dismissed 10 N.Y.3d 858 (2008).

[4] Doukas v. Ballard, 39 Misc. 3d 1227(A), 2013 N.Y. Slip Op. 50776(U), *6 (Sup. Ct., Suffolk County 2013) (citation omitted); see also Henry, 147 A.D.3d at 601; Roslyn Sav. Bank v. National Westminster Bank USA, 266 A.D.2d 272 (2d Dept. 1999).

[5] Town of Oyster Bay v. Lizza Indus., Inc., 22 N.Y.3d 1024, 1032 (2013); see also Quintana v. Wiener, 717 F. Supp. 77, 80 (S.D.N.Y. 1989); Henry, 147 A.D.3d at 601.

[6] Henry, 147 A.D.3d at 601 (citing cases).

[7] Id.; see also Kahn v. Kohlberg, Kravis, Roberts & Co., 970 F.2d 1030, 1041 (2d Cir. 1992), cert. denied 506 U.S. 986 (1992).

[8] Defendant moved to dismiss pursuant to CPLR 3211(a)(5). To prevail on the latter, the movant must establish a prima facie case that the plaintiff’s time to commence an action has expired; then the burden shifts to the plaintiff to raise a question of fact as to whether it commenced the action within the applicable limitations period, or whether an exception or tolling applies. Williams v. City of Yonkers, 160 A.D.3d 1017, 1019 (2d Dept. 2018) (citation omitted); Aozora Bank, Ltd. v. Deutsche Bank Sec. Inc., 137 A.D.3d 685, 689 (1st Dept. 2016).

[9] Slip Op. at *1 (citing Henry, 147 A.D.3d at 601).

[10] Id. (citing id.)