Court of Appeals – Equitable estoppel: Incorporated Village of Freeport v. Freeport Plaza West LLC

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New York State Court of Appeals

Equitable estoppel — Government action

Incorporated Village of Freeport v. Freeport Plaza West LLC

No. 63

Judge Halligan

Background: The parties entered into a contract to develop several parcels of land. The plaintiff commenced the action against the defendant for breach of contract, alleging that the defendant failed to close on the transaction by the contractually required deadline. The defendant asserted a counterclaim for anticipatory breach but failed to file a notice of claim. The defendant argues that the plaintiff should be equitably estopped from raising the failure because the plaintiff did not move to dismiss the counterclaim.

Ruling: The Court of Appeals affirmed, holding the Appellate Division properly refused to apply equitable estoppel to excuse the defendant’s failure to file notice of claim. The court noted that equitable estoppel does not apply to the government because to do so could easily result in large scale public fraud and violate the doctrine of separation of powers.

Steven J. Harfenist for the appellant; Keith M. Corbett for the respondent.

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