You are here: / Civil Procedure
, , ,

FEDERAL BANKRUPTCY STAY TOLLED THE STATUTE OF LIMITATIONS IN A FORECLOSURE ACTION COMMENCED BEFORE THE STAY WENT INTO EFFECT (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Garcia, over a three-judge dissent, determined an automatic bankruptcy stay tolls the statute of limitations where a party has a pending action at the time the stay was imposed:

New York law tolls the statute of limitations where “the commencement of an action has been stayed by a court or by statutory prohibition” (CPLR 204 [a]). Federal bankruptcy law automatically stays the commencement or continuation of any judicial proceedings against a debtor upon the filing of a bankruptcy petition (see 11 USC § 362 [a]). We must determine whether the bankruptcy stay qualifies as a “statutory prohibition” under CPLR 204 (a), and, if so, whether a party may later avail itself of the toll where, at the time the stay was imposed, that party had a pending action asserting the same claim. … [W]e answer yes to both questions … . * * *

CPLR 204 (a) provides, “[w]here the commencement of an action has been stayed by a court or by statutory prohibition, the duration of the stay is not a part of the time within which the action must be commenced.” The result here depends on our reading of the term “commencement.”

Plaintiff argues that it is impossible for defendant to have been prohibited from “commencing” an action because a foreclosure action had been commenced prior to plaintiff’s bankruptcy filing. Application of plaintiff’s rule would be as follows: Because defendant filed the first foreclosure claim and defendant responded by filing a bankruptcy petition, invoking the automatic stay, commencement of that first action was not “stayed” under the statute and the toll is inapplicable. And when defendant filed a second foreclosure action, and plaintiff again responded by again filing a bankruptcy petition that invoked the automatic stay, “commencement” of that second action was not stayed, once again making the toll inapplicable … . * * *

Neither this Court nor the Legislature has restricted the term “commencement” to the first time a party files a complaint asserting a cause of action; instead the term may also include the commencement of subsequent actions asserting the same claim … . Lubonty v U.S. Bank Natl. Assn.., 2019 NY Slip Op 08520, CtApp 11-25-19

 

,

PLAINTIFF TRUSTEE’S RESIDENCE IS CALIFORNIA AND THE CAUSES OF ACTION IN THIS RESIDENTIAL-MORTGAGE-BACKED-SECURITIES BREACH OF CONTRACT ACTION THEREFORE ACCRUED IN CALIFORNIA; UNDER NEW YORK’S BORROWING STATUTE, CPLR 202, THE ACTIONS MUST BE DISMISSED BECAUSE THEY ARE UNTIMELY UNDER CALIFORNIA LAW (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Fahey, over a two-judge dissent, determined that California, the residence of the plaintiff, here a residential-mortgage-backed-securities trustee, was where the breach of contract action accrued, not New York. Therefore, pursuant to CPLR 202, New York’s borrowing statute, the action must be timely under both California and New York law. The action was not timely under California law which has a four-year statute for breach of contract:

Defendants argued that as a resident of California, plaintiff suffered economic injury in California, and therefore plaintiff’s causes of action accrued in California for the purposes of CPLR 202. Plaintiff conceded that it was a resident of California. It argued, however, that instead of applying the general rule that an economic injury is suffered where the plaintiff resides to determine where the cause of action accrued, the court should apply a multi-factor analysis. Plaintiff asserted that because it was suing in a representative capacity on behalf of the trusts, it did not suffer real economic loss, and its residence was irrelevant, or at least not the primary consideration, for determining the place of accrual. * * *

We reaffirm that “a cause of action accrues at the time and in the place of the injury” … . Although courts may, in appropriate cases, conclude that an economic loss was sustained in a place other than where the plaintiff resides, we decline to apply the multi-factor analysis that plaintiff proposes. * * *

… [W]e conclude that plaintiff’s residence applies to determine the place of injury in this case. As trustee, plaintiff is authorized to enforce, on behalf of the certificateholders, the representations and warranties in the relevant agreements. Accordingly, it is appropriate for us to look to plaintiff’s residence as the place where the economic injury was sustained and, consequently, where plaintiff’s causes of action accrued for purposes of CPLR 202. Deutsche Bank Natl. Trust Co. v Barclays Bank PLC, 2019 NY Slip Op 08519, Ct App 11-25-19

 

, , , ,

FOUR CLASSES PROPERLY CERTIFIED TO BRING CLASS ACTION SUITS BASED UPON THE CONTAMINATION OF AIR, WATER, REAL PROPERTY AND PEOPLE WITH TOXIC CHEMICALS (THIRD DEPT).

The Third Department, in a full-fledged opinion by Justice Lynch, determined that Supreme Court properly certified four classes bring class action suits against a manufacturer alleging the contamination of water, air, real property and people with toxic chemicals, PFOA and PFOS:

Plaintiffs, residents of the Town, commenced this action as a proposed class action, alleging that defendant’s use and improper disposal of PFOA and PFOS caused personal injury and property damage. In their complaint, plaintiffs proposed four classes: (1) a public water property damage class; (2) a private well water property damage class; (3) a private well nuisance class; and (4) a PFOA invasion injury class. Generally, the putative class members were individuals who owned or leased property in the Town or who ingested contaminated municipal or well water or inhaled PFOA or PFOS particulates in the Town and had demonstrable evidence of elevated levels of the chemical in their blood system. * * *

We agree with Supreme Court’s determination that, in addition to those questions common to the property classes, the answers to certain additional common questions will be applicable to all members of the invasion injury class, for example: (1) whether medical monitoring is an available remedy; (2) the extent of the health hazard presented by exposure to PFOA; and (3) whether the members of the class are at significant increased risk for disease based on the excess accumulation of PFOA in their bodies. Although defendant contends that there are myriad factual questions that are not common to the class, we do not agree that those predominate. Importantly, this is not a case where there is an issue of fact regarding exposure — rather, each class member must establish exposure and accumulation through blood work … . Burdick v Tonoga, Inc., 2019 NY Slip Op 08461, Third Dept 11-21-19

 

,

NEW YORK DID NOT HAVE JURISDICTION OVER FATHER, A KENTUCKY RESIDENT, IN THIS DIVORCE ACTION: THE COUPLE HAD NOT LIVED TOGETHER IN NEW YORK STATE FOR 23 YEARS (THIRD DEPT).

The Third Department, reversing Supreme Court, determined New York did not have jurisdiction over father, a Kentucky resident, in this divorce action. The couple had last lived in New York in 1995 and had resided in Kentucky from 2003 to 2015:

Assuming, without deciding, that the wife established one of the predicates for jurisdiction under CPLR 302 (b), we find that the quality and nature of the husband’s activities in New York were such that it would be unreasonable and unfair to require him to defend an action in this state. Although the parties married in New York in 1991 and resided here until 1995, they have not resided together in this state in over 23 years. From 2003 until 2015, the parties resided together in Kentucky, where, at the time of commencement of this action, the husband was employed as a university professor and the parties owned real property. With the husband’s consent, the wife moved to New York with the parties’ son  in August 2015 and, as vaguely asserted by the wife, the husband has visited them in New York. The parties have not rented or purchased a home in New York. Rather, the wife and the son have lived rent-free with the wife’s parents, with the husband providing additional financial support. In our view, the husband’s contacts with New York are insufficient to warrant the exercise of personal jurisdiction over him … .Accordingly, Supreme Court should have granted the husband’s motion to dismiss the complaint for lack of personal jurisdiction. Crosby v Crosby, 2019 NY Slip Op 08469, Third Dept 11-21-19

 

, ,

PUBLIC HEALTH LAW 230 DOES NOT CREATE A PRIVATE RIGHT OF ACTION FOR MALICIOUS REPORTING OF INSURANCE FRAUD BY A PHYSICIAN TO THE OFFICE OF PROFESSIONAL MEDICAL CONDUCT (CT APP).

The Court of Appeals, in a full-fledged opinion by Judge Stein, determined that Public Health Law 230 (11) (b) does not create a private right of action. Plaintiff surgeon provided medical care to four patients injured in an automobile accident and submitted claims for payment to the defendant insurer. The insurer fully or partially denied the claims and then filed complaints against plaintiff with the Office of Professional Medical Conduct (OPMC) alleging insurance fraud. The OPMC declined to discipline plaintiff. Plaintiff then sued defendant insurer for bad-faith and malicious reporting in violation of Public Health Law 230 (11) (b). The Court of Appeals noted a split of authority in the 1st and 2nd Departments re: whether a violation of this statute give rise to a private right of action:

Public Health Law § 230 (11) (b) does not expressly create a cause of action authorizing licensees to commence civil litigation against a complainant that files an allegedly bad-faith and/or malicious report with OPMC (compare Public Health Law § 230 [10] [j] [creating an express right to commence a CPLR article 78 proceeding in certain instances]). Consequently, “recovery may be had . . . only if a legislative intent to create such a right of action is fairly implied in the statutory provision[] and [its] legislative history” … . …

We have consistently identified three “essential factors” to be considered in determining whether a private right of action can be fairly implied from the statutory text and legislative history: “(1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme”… . Critically, all three factors must be satisfied before an implied private right of action will be recognized … . Applying these factors here, we conclude that the legislature did not intend to create a right of action under Public Health Law § 230 (11) (b). Haar v Nationwide Mut. Fire Ins. Co., 2019 NY Slip Op 08445, CtApp 11-21-19

 

, ,

STATUTE OF LIMITATIONS TOLLED BY THE FILING OF SIMILAR ACTIONS ALLEGING THE UNDERPAYMENT OF WAGES TO HOME HEALTH AIDES (SECOND DEPT).

The Second Department determined defendants’ motion to dismiss these “wage-underpayment” actions as time-barred to the extent they seek damages for underpayment more than six years before the suits were brought was properly denied. The Second Department held that, pursuant to American Pipe & Constr. Co. v Utah, 414 US 538, the statute of limitations was tolled based upon the filing of prior similar actions:

The plaintiffs, home health aides who were employed by the defendants Americare Certified Special Services, Inc., and Americare, Inc. (hereinafter together Americare), and who often worked 24-hour “live in” shifts, seek to recover damages for underpayment of minimum, overtime, and “spread of hours” wages in violation of the Labor Law and New York State Department of Labor wage orders and regulations. * * *

We find that … applying American Pipe tolling under the circumstances, where a court has not previously addressed the impropriety of class certification, is consistent with the policies underlying the tolling doctrine: avoiding multiplicity of suits and vexatious litigation … . Accordingly, we agree with the Supreme Court’s denial of the defendants’ motion to dismiss … . Badzio v Americare Certified Special Servs., Inc., 2019 NY Slip Op 08389, Second Dept 11-20-19

 

, ,

FORMAL ADMISSIONS, INFORMAL ADMISSIONS AND JUDICIAL ESTOPPEL EXPLAINED (SECOND DEPT).

The Second Department Department explained the nature of an admission and the doctrine of judicial estoppel in this action to determine whether defendant, Weber, was a shareholder of plaintiff RMNY:

Weber’s prior admissions made in other actions that he was not a shareholder of RMNY did not constitute formal judicial admissions entitling RMNY to summary judgment. Formal judicial admissions are facts admitted by a party’s pleadings … , and are conclusive of the facts admitted in the action in which they are made … . The admissions relied upon here were not made in this action.

Furthermore, RMNY failed to establish that the doctrine of judicial estoppel applies. Under the doctrine of judicial estoppel, also known as estoppel against inconsistent positions, a party may not take a position in a legal proceeding that is contrary to a position he or she took in a prior proceeding, simply because his or her interests have changed  … . The doctrine applies only where the party secured a judgment in his or her favor in the prior proceeding … . This doctrine “rests upon the principle that a litigant should not be permitted . . . to lead a court to find a fact one way and then contend in another judicial proceeding that the same fact should be found otherwise'” … . “The doctrine is invoked to estop parties from adopting such contrary positions because the judicial system cannot tolerate this playing fast and loose with the courts” … .Here, since RMNY failed to show that Weber secured any formal grant of relief in the other actions based upon his prior statements, they do not implicate the doctrine of inconsistent positions … . Rather, the statements constitute informal judicial admissions that are not conclusive but are “merely evidence of the fact or facts admitted” … , “the circumstances of which may be explained at trial” … . Re/Max of N.Y., Inc. v Weber, 2019 NY Slip Op 08432, Second Dept 11-20-19

 

, ,

DEFENSE MOTION TO PRECLUDE PLAINTIFF FROM PRESENTING EXPERT EVIDENCE BECAUSE OF LATE DISCLOSURE AND DEMANDING THE MATERIAL RELIED UPON BY THE EXPERT PROPERLY DENIED IN THIS STAIRWAY SLIP AND FALL CASE (FIRST DEPT).

The First Department determined defendant’s motion to preclude plaintiff from offering his expert’s report and to turn over the materials relied upon by the expert was properly denied in this stairway slip and fall case:

“Preclusion of expert evidence on the ground of failure to give timely disclosure, as called for in CPLR 3101(d)(1)(i), is generally unwarranted without a showing that the noncompliance was willful or prejudicial to the party seeking preclusion” … . “Prejudice can be shown where the expert is testifying as to new theories, or where the opposing side has no time to prepare a rebuttal” … . * * *

Here plaintiff withheld information about an expert he retained and who performed a comprehensive inspection and report before the demand for expert disclosure was served, failed to disclose this in response to such demand, and continued to withhold such information over the course of many court conferences and the years that the case was pending. He offers no excuse for his delay or for having served a response to defendant’s expert disclosure demand that was arguably misleading.

However, when plaintiff eventually did disclose the expert, it was not on the eve of trial … . His disclosure was made on or about March 9, 2018, about six weeks before the originally-scheduled trial date of April 30, 2018, a lead time further expanded with the court’s 60-day adjournment … . Moreover, notwithstanding defendant’s claims to the contrary, plaintiff’s expert did not advance a different theory of liability from that which plaintiff had previously advanced. * * *

Defendant also fails to show grounds to disturb the court’s denial of its motion to direct plaintiff to turn over materials relied on by his expert. Defendant claims it is entitled to these materials because, given the passage of time, any expert it would retain now would not be inspecting premises that resemble the premises at the time of the accident. However, defendant does not adequately explain its failure to timely retain an expert of its own. Rivera v New York City Hous. Auth., 2019 NY Slip Op 08366, First Dept 11-19-19

 

,

LAW OFFICE FAILURE WAS AN ADEQUATE EXCUSE FOR A TWO-WEEK DELAY IN FILING PAPERS OPPOSING SUMMARY JUDGMENT, SUPREME COURT REVERSED (FIRST DEPT).

The First Department, reversing Supreme Court, determined law office failure was an adequate excuse for failing to timely response to summary judgment motions:

We disagree with the motion court that plaintiff failed to demonstrate both a reasonable excuse for her default and a meritorious cause of action … . We find that the law office failure that resulted in plaintiff’s two-week delay in filing opposition to defendants’ motions was not willful and that a meritorious cause of action as to both incidents has been set forth … . Knight v Acacia Network, Inc., 2019 NY Slip Op 08365. First Dept 11-19-19

 

, ,

THE DISCHARGE IN BANKRUPTCY DID NOT ACCELERATE THE DEBT AND THEREFORE DID NOT START THE STATUTE OF LIMITATIONS RUNNING; THE IN REM FORECLOSURE ACTION REMAINS VIABLE (FOURTH DEPT).

The Fourth Department, in a full-fledged opinion by Justice Carni, determined that the mortgage debt was not accelerated by a discharge in bankruptcy, therefore the statute of limitations was not triggered and an in rem foreclosure action remains viable:

… [O]nce a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt” … . “Where the acceleration . . . is made optional with the holder of the note and mortgage, some affirmative action must be taken evidencing the holder’s election to take advantage of the accelerating provision, and until such action has been taken the provision has no operation” … . Here, the mortgage provided plaintiff the option to accelerate the debt under certain circumstances, but did not state that the debt would be automatically accelerated if defendant obtained a discharge in bankruptcy.

We reject defendant’s contention that the discharge in bankruptcy automatically accelerated the debt and thus triggered the statute of limitations with respect to the entire debt … .

“[E]ven after the debtor’s personal obligations have been extinguished [by chapter 7 discharge], the mortgage holder still retains a right to payment in the form of its right to the proceeds from the sale of the debtor’s property,” and a bankruptcy proceeding does not “impair [the mortgage holder’s] right to commence an action against [the debtor] in rem to seek payment from the proceeds of a foreclosure sale” … . … [C]hapter 7 discharge removes the “mode of enforc[ement]” against the debtor in personam, but the obligation otherwise remains intact and does not impact an action in rem … . Wilmington Sav. Fund Socy., FSB v Fernandez, 2019 NY Slip Op 08290, Fourth Dept 11-15-19

 

Categories

Sign Up for the Mailing List to Be Notified When the Site Is Updated.

  • This field is for validation purposes and should be left unchanged.

Copyright © 2026 New York Appellate Digest, Inc.
Site by CurlyHost | Privacy Policy