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ONLY THE ORIGINAL PLAINTIFF CAN TAKE ADVANTAGE OF CPLR 205 (A) WHICH ALLOWS RE-COMMENCEMENT OF A LAWSUIT WITHIN SIX MONTHS OF A DISMISSAL WHICH WAS NOT ON THE MERITS (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge DiFiore, over a dissenting opinion, determined the plaintiff, HSBC, could not take advantage of the six-month extension for commencing an action after a dismissal which was not on the merits (CPLR 205(a)) because HSBC was not the original plaintiff:

When a timely-commenced action has been dismissed on certain non-merits grounds, CPLR 205 (a) allows “the plaintiff” in that action “or, if the plaintiff dies,” the “executor or administrator” of the plaintiff’s estate, six months to commence a new action based on the same transaction or occurrence. The new action will be deemed timely based on the commencement of the prior action. Here, after the dismissal of a prior action brought by two certificateholders … —and after the statute of limitations expired—plaintiff HSBC Bank USA, National Association, in its capacity as trustee of a residential mortgage-backed securities (RMBS) trust, commenced this action against the sponsor, invoking CPLR 205 (a). Because HSBC was not “the original plaintiff” in the prior dismissed action … , we agree with the courts below that HSBC could not invoke CPLR 205 (a) to avoid dismissal of this time-barred claim … .* * *

HSBC is not “the plaintiff” in the prior action and the benefit of CPLR 205 (a) is unavailable to save its untimely complaint. … [T]his conclusion is consistent with the public policy underpinning the savings statute. CPLR 205 (a) is a remedial statute that … is “‘designed to insure to the diligent suitor'” an opportunity to have a claim heard on the merits … when the suitor has “initiated a suit in time” … but the claim was dismissed on some technical, non-merits-based ground. While the savings statute undoubtedly has a “broad and liberal purpose” … to “ameliorate the potentially harsh effect of the [s]tatute of [l]imitations” … , “[t]he important consideration is that, by invoking judicial aid [in the first action], a litigant gives timely notice to [the] adversary of a present purpose to maintain [its] rights before the courts” … . Where, as here, the litigant commencing the second action is not the original plaintiff, application of CPLR 205 (a) would protect the rights of a dilatory—not a diligent—suitor. By failing to bring the action within the statute of limitations, HSBC signaled that it had no intention to pursue its claims in court. CPLR 205 (a) does not apply and HSBC’s failure to commence an action within the statute of limitations is fatal. ACE Sec. Corp. v DB Structured Prods., Inc., 2022 NY Slip Op 03927, CtApp 6-16-22

Practice Point: Only the original plaintiff can take advantage of CPLR 205 (a) which allows re-commencement of a lawsuit within six months of a dismissal which was not on the merits.

 

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