Third party beneficiary to a contract between a New York partnership

Third party beneficiary to a contract between a New York partnership

Jun 22, 2021, 11:38:16 AM News

Procedural Posture

Plaintiff, a third party beneficiary to a contract between a New York partnership its limited partner, sued defendant partner for breach. Applying New York law under a choice of law provision, the Superior Court of Los Angeles County, California, found that the statute of limitations barred the claim and sustained the beneficiary's demurrer without leave to amend, but denied his motion for attorney's fees. Both parties appealed.


Overview

The beneficiary initially argued that the trial court should have applied judicial estoppel to prevent the partner from asserting a changed position. The court disagreed because, to the extent that the partner asserted inconsistent positions in support of his demurrer, they were inconsistent legal positions rather than factual positions. The trial court also properly applied New York's shorter statute of limitations, N.Y. C.P.L.R. § 213(2) (Consol.), to conclude that the complaint was time-barred because New York had a substantial relationship with the contract's parties and subject matter: The contract stated the obligation of a New York entity's limited partner to an intended beneficiary that was New York resident, civil litigation lawyer and it was to be performed in New York. California had no fundamental public policy with which application of the New York law conflicted. The trial court also correctly applied New York law to the issue of attorney's fees and denied defendant's request on the ground that there was no mutuality of remedy available to him. Although California's policies differed from New York's, its interest was not materially greater, and New York had the most significant contacts.


Outcome

The court affirmed both the judgment and the post judgment order.

Published by lauradern

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