Summary
In Protter v Nathan's Famous Systems, Inc., 246 AD2d 585, 586 (2d Dep't 1998), a similarly drafted, shorter limitations period was held enforceable in a franchise agreement.
Summary of this case from TOP DOG VENT., LLC v. PK OP., INC.Opinion
January 20, 1998
Appeal from the Supreme Court, Nassau County (Franco, J.).
Ordered that the judgment is reversed insofar as appealed from, on the law, with costs, that branch of the defendants' motion to dismiss the second cause of action is granted, and the complaint is dismissed in its entirety.
The claims of the plaintiff franchisee alleging fraud and violation of General Business Law article 33, commonly referred to as the New York State Franchise Sales Act (hereinafter the Franchise Act), are time barred pursuant to a provision of the parties' franchise agreement. This provision indicates that "[a]ny and all claims and actions arising out of or relating to the Agreement, the relationship of Franchisee and Franchisor, or Franchisee's operation of the franchised business * * * shall be commenced within one (1) year from the occurrence of the facts giving rise to such claim or action". Absent proof that the contract is one of adhesion, or is the product of overreaching, or that the altered period is unreasonably short, the abbreviated period of limitation is valid and enforceable ( see, Sapinkopf v. Cunard S.S. Co., 254 N.Y. 111; Planet Constr. Corp. v. Board of Educ., 7 N.Y.2d 381; Krohn v. Felix Indus., 226 A.D.2d 506; Timberline Elec. Supply Corp. v. Insurance Co., 72 A.D.2d 905). The rule allowing parties to voluntarily contract to shorten the applicable Statute of Limitations is applicable to franchise agreements ( see, H.P.S. Capitol v. Mobil Oil Corp., 186 A.D.2d 98).
The Supreme Court found that the period of time set forth in the franchise agreement was unreasonably short, and would allow for a claim to accrue and expire before the execution of the agreement. This was error. The agreement indicates that the claim accrues at such time as all of the facts establishing the alleged fraud, which necessarily include detrimental reliance, may be established. This can be no earlier than the time of the execution of the agreement ( cf., Fantastic Enters. v. S.M.R. Enters., 143 Misc.2d 124, 129). The franchisee's remaining contentions with regard to enforcement of the limitations provision of the agreement are without merit.
In light of our determination, we need not address the defendants' remaining contentions.
Bracken, J.P., Copertino, Thompson and Luciano, JJ., concur.