Timely Counterclaim

General Question: Assume there is a contract that both pati8305/12/13
Here is a Texas statute from our Civil Practice & Remedies Cjeffm05/12/13
ti83 - I do hope you researched this issue before asking hemississippilawyer05/12/13
As harsh as dixieesq is sounding, there is a point to his stjeffm05/12/13
Jeff, Thank you for the response. I will look for my stati8305/12/13
I am sure there is some, at least minimal, window of opportujeffm05/12/13
This appears on point under NJ common law: “[W]here the cjeffm05/12/13
In case anyone is interested in the answer I found: It loti8305/12/13
^ The better case is in my post above. It looks to be exactjeffm05/12/13
Wow, and thanks for looking into the issue. I'm glad to see ti8305/12/13
Yeah. Now, you're on your way!jeffm05/12/13
ti83 (May 12, 2013 - 11:53 am)

General Question:

Assume there is a contract that both parties breach on the same date. Thus, if either sues for breach of contract, the other would have a counterclaim for breach of contract.

If a complaint is filed on the last day before the statute of limitations has run, then the Defendant is permitted to assert the breach of contract counterclaim, right? Does anyone know what the principle is called so I can do state-specific research? Thank you.

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jeffm (May 12, 2013 - 12:00 pm)

Here is a Texas statute from our Civil Practice & Remedies Code:

§ 16.069. Counterclaim or Cross Claim

(a) If a counterclaim or cross claim arises out of the same transaction or occurrence that is the basis of an action, a party to the action may file the counterclaim or cross claim even though as a separate action it would be barred by limitation on the date the party's answer is required.

(b) The counterclaim or cross claim must be filed not later than the 30th day after the date on which the party's answer is required.

Note that many Texas lawyers are unaware of this statute and miss the deadline set forth in subsection (b).


Look for something similar in your state. You really should disclose your state if you want the possibility of precise advice.

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mississippilawyer (May 12, 2013 - 12:57 pm)

ti83 - I do hope you researched this issue before asking here. If not, do you expect people to do your legal research for you here?

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jeffm (May 12, 2013 - 1:10 pm)

As harsh as dixieesq is sounding, there is a point to his statement. While I will not fumble around indefinitely, I will make sure I've devoted a solid effort (a couple of hours perhaps) before asking someone else. I tend to like to find research on my own. What I learn "sticks" better when I make a greater effort to find it.

Also, people who do not have a dog in your hunt will often give you bad advice, even though it was in good faith. Be sure and confirm anyone else's research (mine included). This is especially true of opposing counsel's research.

DixieEsq, I feel quite sure ti83 did look around a fair bit before asking. Noobs sometimes have a problem framing the question with the right search terms. It's a matter of applying the jargon they learned in law school, since once you get out, "experienced" lawyers constantly run around telling noobs that law school didn't teach them anything.

Once they get back to thinking about all the jargon and doctrines they were taught, it comes back together. They get better at it over time.

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ti83 (May 12, 2013 - 12:06 pm)

Jeff,

Thank you for the response. I will look for my state's version of the statute.

The contract in my problem is governed by NJ law.

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jeffm (May 12, 2013 - 12:08 pm)

I am sure there is some, at least minimal, window of opportunity.

Your best bet is to start a new thread in this, and maybe other, forums. Title it something like:

"New Jersey: Law on asserting a counter-claim which would normally be barred, except for plaintiff bringing suit."

Something like that....

Good luck!

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jeffm (May 12, 2013 - 12:42 pm)

This appears on point under NJ common law:

“[W]here the counterclaim asserts a recoupment which is not barred by the appropriate statute of limitations as of the time when the principal action was commenced, it will not be considered as untimely even though it is filed in said action at a time when if it were the subject of an independent action it could not be maintained by reason of the statute of limitations.” *1003 Atlantic City Hospital v. Finkle, 110 N.J.Super. 435, 440, 265 A.2d 853 (Cty Ct.1970) (emphasis added); see Gibbins v. Kosuga, 121 N.J.Super. 252, 296 A.2d 557, 560–61 (Super.Ct.1972). Under New Jersey law, for the purposes of the statutes of limitations, an action “commences” when the complaint is filed. 2A N.J.S.A. § 14–1 (West Supp.1983); N.J.Civ.Prac.R. 4:2–2 (Pressler 1983). Because the complaint was filed in September, 1980, and the limitation period did not expire until October, 1980, defendants' claims are timely.

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ti83 (May 12, 2013 - 12:52 pm)

In case anyone is interested in the answer I found:

It looks like NJ legal authority is not as clear as TX legal authority on this issue.

The counterclaim rule is N.J. Ct. R. 4:7-1 and it doesn't address the statute of limitations. There is one case that addresses the issue of a statute of limitations lapsing in between when a complaint is filed and an answer is due, which holds that recoupment is never barred by statute of limitations so long as main action is timely. Atlantic City Hospital v. Finkle, 110 N.J. Super. 435 (County Ct. 1970). Unfortunately, this is just a trial court decision, not appellate or Supreme Court of NJ.

Recoupment - counterclaim arising out of the same transaction or occurence.
Set-off - counterclaim arising from an independent transaction or occurence.

Thus, it looks like if this case does get filed against my client in approximately six years and the plaintiff is very calculating, there is some chance for him to be able to argue that my client's counterclaim is time-barred. However, I believe the probability that a judge rules in plaintiff's favor on this issue is low.

Thanks again for responding, Jeff. I'm a young lawyer and I've read your e-book - it changed my perspective on the value of my legal training and continuing my legal career.

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jeffm (May 12, 2013 - 12:54 pm)

^ The better case is in my post above. It looks to be exactly what you want.

Westlaw is good. I found the answer in about 8 minutes.

It's tough committing money to it when you make very little money, but really, this should be a top item in your budget of things to find a way to afford - moreso than offices and copiers.

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ti83 (May 12, 2013 - 12:55 pm)

Wow, and thanks for looking into the issue. I'm glad to see that we came to same result.

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jeffm (May 12, 2013 - 12:56 pm)

Yeah. Now, you're on your way!

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