Wednesday, July 6, 2016

CPLR 203(d) and equitable recoupment on a counterclaim.

Practice point:  Under CPLR 203(d), claims and defenses that arise out of the same transaction as a claim asserted in the complaint are not barred by the statute of limitations, even though an independent action by the defendant might have been time-barred at the time the action was commenced. This provision allows a defendant to assert an otherwise untimely claim which arose out of the same transactions alleged in the complaint, but only as a shield for recoupment purposes, and does not permit the defendant to obtain affirmative relief. Here the Appellate Division found that the defendant's counterclaim alleging legal malpractice relates to the plaintiff's performance under the same retainer agreement pursuant to which the plaintiff would recover, and therefore the counterclaim falls within the permissive ambit of CPLR 203(d).  However, the counterclaim is permitted only to the extent that it seeks to offset any award of legal fees to the plaintiff and not to the extent that it seeks affirmative relief.

Student note:  The Appellate Division affirmed dismissal of the counterclaim alleging breach of contract, as it is duplicative of the counterclaim alleging legal malpractice. This counterclaim is based on the same factual allegations that underlie the malpractice counterclaim and does not allege distinct damages.

Case:  Balanoff v. Doscher, NY Slip Op 04896 (2d Dep't June 22, 2016)

Here is the decision.

Tomorrow's issue:  An ineffective expert affirmation in a medical malpractice action.