Long Island/Connecticut Limousine Group, Inc. v. Airlimo Express, Inc.
Court: Appellate Division of the Supreme Court of the State of New York; September 23, 1996; New York; State Appellate Court
In a legal action for recovery on a promissory note, the defendants appealed a Supreme Court decision that denied their motion to stay arbitration of the plaintiff's claim, which was asserted under CPLR 3213. The court ruled that the claim would not have been barred by the Statute of Limitations had it been filed in court. Background: In 1988, the parties entered into a contract for the sale of assets from the plaintiff's airport transportation business, which included an arbitration clause. The defendants made a down payment and executed a promissory note for the remaining purchase price. In September 1993, the plaintiff moved for summary judgment, claiming breach of the promissory note dated August 15, 1988. The defendants cross-moved to compel arbitration, which the Supreme Court granted in February 1994, staying the action. In December 1994, the plaintiff demanded arbitration, but the defendants sought a permanent stay, arguing that the claim was time-barred by the six-year Statute of Limitations. The Supreme Court denied this motion, and the defendants continued to participate in arbitration, which waived their right to appeal the stay. The court highlighted that the arbitration proceeding commenced in February 1994 fell within the Statute of Limitations. A demand for arbitration tolls the Statute of Limitations unless the parties show intent to abandon the arbitration, which did not occur in this case. Thus, the plaintiff's demand for arbitration was considered timely. The appeal was dismissed without costs.