The Southern District of New York was presented with a statute of limitations question pertaining to the date of injury in a subrogation property damage case in American Automobile Ins. Co. v. Hallak Cleaners.

A water leak in a building caused damage to an insured’s clothing.  The insured brought the clothing to Hallak Cleaners to clean.  The cleaning work was initially completed on December 11, 2009, and the cleaners stored the clothing until the insured was able to pick them up on May 18, 2010.

Over the next several months, the insured returned items to the cleaners to be retreated, but eventually claimed that the cleaner’s work actually ruined some of the items.  The insured filed a claim with its insurer for the clothing the cleaners damaged.  The insurer paid the claim, and commenced a subrogation action against the cleaners on May 20, 2013.

The cleaners argued that the action was barred by the three year statute of limitations period since any damage occurred prior to December 11, 2009, when the cleaners initially completed the work.  As such, the cleaners argued that the insurer had until December 11, 2012 to file suit.  The insurer opposed arguing that the accrual date for the statute of limitations was May 18, 2010, the day that the clothing was picked up, and the damage was discovered.  The insurer argued that it had until May 18, 2013 to file suit, but since May 18, 2013 was a Saturday, its filing on the following Monday, May 20, 2013, was timely.

The court agreed with the cleaners, and found that the accrual date was the date the damage occurred, i.e. sometime prior to December 11, 2009, when the work was complete, and not the date of discovery.  Thus, the suit was time barred and dismissed.

The lesson learned is file sooner than later.  The date of injury (as opposed to discovery) is generally the accrual date for most causes of action.

Thanks to Moya O’Connor for her contribution to this post.