Borrowing statute (and sanctions)

Errant Gene Therapeutics, LLC v Sloan-Kettering Inst. for Cancer Research, 182 AD3d 506 [1st Dept. 2020]

Contrary to Bluebird’s contention, plaintiff’s unfair competition claim is timely. Since plaintiff is a resident of Illinois and it allegedly suffered damage in Illinois, where it does business, New York’s borrowing statute applies for statute of limitations purposes (CPLR 202). Under CPLR 202, plaintiff’s unfair competition claim must be timely under the shorter of New York and Illinois’ statute of limitations for unfair competition claims. In New York, plaintiff’s unfair competition claim is subject to a six-year statute of limitations because it is based on fraud (see Mario Valente Collezioni, Ltd. v AAK Ltd., 280 F Supp 2d 244, 258 [SD NY 2003]; see generally Katz v Bach Realty, 192 AD2d 307 [1st Dept 1993]). In Illinois, plaintiff’s unfair competition claim is subject to a five-year statute of limitations and it accrues when plaintiff either knew or should have known of the existence of the right to sue (Henderson Sq. Condominium Assn. v LAB Townhomes, LLC, 2015 IL 118139, 46 NE3d 706 [2015]). Thus, under CPLR 202, Illinois’ five-year statute of limitations applies to plaintiff’s unfair competition claim. Under that statute of limitations, the unfair competition claim is timely because it accrued less than five years before plaintiff commenced the action on January 27, 2017. Initially, there is no evidence that plaintiff discovered or could have discovered that Bluebird was engaging in fraudulent behavior, allegedly aimed at destroying plaintiff and controlling the market for a gene therapy treatment, prior to January 27, 2012. Plaintiff asserts that it did not discover the facts underlying Bluebird’s alleged fraudulent behavior until documents were produced in discovery in a separate litigation in June 2016. Moreover, at the earliest, plaintiff could have discovered Bluebird’s alleged fraudulent behavior in September 2012, when Bluebird circulated a presentation it had given in which it discussed the intellectual property that plaintiff alleges it copied. Bluebird’s assertion that the claim is untimely because plaintiff knew of the facts underlying its unfair competition claim as early as 2010 and 2011 based on emails sent by plaintiff’s CEO is without merit. The emails referenced by Bluebird merely demonstrate plaintiff’s suspicion that Bluebird was acting fraudulently, not that plaintiff had discovered or could have discovered the facts underlying its claim.

The court providently exercised its discretion in denying Bluebird’s motion to hold plaintiff in contempt after a hearing (see Matter of McCormick v Axelrod, 59 NY2d 574, 583 [1983]). However, the court improvidently exercised that discretion in awarding sanctions against Bluebird, because, among other reasons, Bluebird’s contempt motion was not so clearly meritless as to be deemed frivolous, and the court failed to satisfy the procedural requirements of 22 NYCRR 130-1.2 (see Gordon Group Invs., LLC v Kugler, 127 AD3d 592, 595 [1st Dept 2015]).

The bold is mine.

CPLR 202: Borrowing Statute

Soloway v Kane Kessler, PC, 2019 NY Slip Op 00026 [1st Dept. 2019]

The court correctly found the complaint time-barred under CPLR 202, New York’s “borrowing statute,” which requires a claim to be timely under both the New York limitations period and that of the jurisdiction where the claim is alleged to have arisen (Kat House Prods., LLC v Paul, Hastings, Janofsky & Walker, LLP, 71 AD3d 580 [1st Dept 2010]).

CPLR 202 [borrowing statute] and CPLR 205(a) [savings statute] [Ct. App]

CPLR 202

CPLR 205(a)

note the amicus


Norex Petroleum Ltd. v Blavatnik, 2014 NY Slip Op 04802 [2014]

This dramatic and long-running contest over control of a lucrative oil field in Western Siberia reduces at present to an open question of New York civil procedure involving the interplay of CPLR 202, New York's "borrowing" statute, and CPLR 205 (a), New York's "savings" statute. When a cause of action accrues outside New York and the plaintiff is a nonresident, section 202 "borrows" the statute of limitations of the jurisdiction where the claim [*2]arose, if shorter than New York's, to measure the lawsuit's timeliness [FN1]. New York's "savings" statute, section 205 (a), allows a plaintiff to refile claims within six months of a timely prior action's termination for reasons other than the merits or a plaintiff's unwillingness to prosecute the claims in a diligent manner.[FN2]

This appeal calls upon us to decide whether a nonresident plaintiff who filed a timely action in a New York federal court may refile claims arising from the same transaction in state court within six months of the federal action's non-merits termination, even though the suit would be untimely in the out-of-state jurisdiction where the claims accrued. We hold that such a lawsuit is not time-barred, and therefore reverse the Appellate Division.[FN3]

Its a long decision, click the case to read the rest.

CPLR R. 327 and the borrowing statute (CPLR § 202 )

Patriot Exploration, LLC v Thompson & Knight LLP, 2010 NY Slip Op 06217 (App. Div., 1st, 2010)

In this legal malpractice action, the motion court did not abuse its discretion in declining to dismiss this action on forum non conveniens grounds (see Shin-Etsu Chem. Co., Ltd. v ICICI Bank Ltd., 9 AD3d 171, 175-77 [2004]). Since the court may grant a forum non conveniens motion "on any conditions that may be just" (CPLR 327[a]), which includes the power to impose "reasonable conditions designed to protect plaintiffs' interests" (Chawafaty v Chase Manhattan Bank, 288 AD2d 58, 58 [2001], lv denied 98 NY2d 607 [2002]), the court could properly condition an inconvenient-forum dismissal on a waiver of the foreign forum's
two-year statute of limitation (see e.g. Healy v Renaissance Hotel Operating Co., 282 AD2d 363, 364 [2001]; Seung-Min Oh v Gelco Corp., 257 AD2d 385, 387 [1999]; Highgate Pictures v De Paul, 153 AD2d 126, 129 [1990]).

Nor can defendant prevail on its belated offer, made in its motion for reargument, to waive its potential statute of limitations defense, since the court had also properly found that defendant had not met its burden of establishing that New York was an inconvenient forum and that the matter should be tried in Texas based upon a consideration of factors including potential hardship to proposed witnesses, the location of records and files, the residency of the parties, and the burden imposed upon the New York courts (see Gulf Oil Corp. v Gilbert, 330 US 501, 508 [1947]; Islamic Republic of Iran v Pahlavi, 62 NY2d 474, 479 [1984], cert denied, 469 US 1108 [1985]).

Read the dissent.  You don't see it here?  Click the link, stupid.

CPLR § 202 Plaintiff is a resident of its state of incorporation

 CPLR § 202 Cause of action accruing without
the state

Verizon Directories Corp. v Continuum Health Partners, Inc., 2010 NY Slip Op 04640 (App. Div., 1st, 2010)

For purposes of CPLR 202, plaintiff is a "resident" of, and its cause of
action accrued in, Delaware, the state of its incorporation (see
Global Fin. Corp. v Triarc Corp.
, 93 NY2d 525, 529-530 [1999]; American
Lumbermens Mut. Cas. Co. of Ill. v Cochrane
, 129 NYS2d 489 [1954], affd
284 App Div 884 [1954], affd 309 NY 1017 [1956]). We reject
plaintiff's contention that, for purposes of the statute, it is a
"resident" of New York, or that its cause of action accrued in this
State, by virtue of its authorization to do business and asserted
extensive presence here (see Global Fin. Corp., 92 NY2d at
528-29). Hence, New York's six-year statute of limitations does not
apply (see CPLR 202),
and the action is barred by Delaware's one-year statute (10 Del Code
Ann, tit 10, § 8111).

Court of Appeals on the “borrowing statute”–CPLR § 202

 CPLR § 202 Cause of action accruing without the state

Portfolio Recovery Assoc., LLC v King, 2010 NY Slip Op 03470 (Ct. App., 2010)

On April 1, 2005, nearly five years after the assignment and more
than six years after the account was canceled, Portfolio commenced this
action against King, now a resident of New York, asserting causes of
action for breach of contract and account stated. King asserts in his
answer, among other things, that upon application of CPLR 202—this
State's "borrowing statute"—Portfolio's claims are time-barred.
Specifically, King claims that Delaware's three-year statute of
limitations for breach of a credit contract (see 10 Del.C. §
8106) applies and, alternatively, Portfolio's claims are untimely under
this State's six-year breach of contract limitations period (see
CPLR 213[2]).

Portfolio obtained summary judgment on its complaint. Supreme
Court directed that judgment be entered in Portfolio's favor and the
Appellate Division affirmed (55 AD3d 1074). We now reverse.

The Appellate Division properly concluded that the Delaware choice of
law clause did not require the application of the Delaware three-year
statute of limitations to bar Portfolio's claims. Choice of law
provisions typically apply to only substantive issues (see Tanges v
Heidelberg N. Am.
, 93 NY2d 48, 53 [1999]), and statutes of
limitations are considered "procedural" because they are deemed "'as
pertaining to the remedy rather than the right'"
(id. at 54-55
quoting Martin v Dierck Equip. Co., 43 NY2d 583, 588 [1978]).
There being no express intention in the agreement that Delaware's
statute of limitations was to apply to this dispute, the choice of law
provision cannot be read to encompass that limitations period. We
conclude, however, that the Appellate Division should have applied CPLR
202 to Portfolio's claims to determine whether they were timely brought
e.g. Global Fin. Corp. v Triarc Corp.
, 93 NY2d 525, 528 [1999]
["there is a significant difference between a choice-of-law question,
which is a matter of common law, and (a) Statute of Limitations issue,
which is governed by the particular terms of the CPLR"]).

CPLR 202 provides, in relevant part, that "[a]n action based upon
a cause of action accruing without the state cannot be commenced after
the expiration of the time limited by the laws of either the state or
the place without the state where the cause of action accrued."
Therefore, "[w]hen a nonresident sues on a cause of action accruing
outside New York, CPLR 202 requires the cause of action to be timely
under the limitation periods of both New York and [*3]the
jurisdiction where the cause of action accrued"
(Triarc, 93 NY2d
at 528). If the claimed injury is an economic one, the cause of action
typically accrues "where the plaintiff resides and sustains the economic
impact of the loss" (id. at 529).

Portfolio, as the assignee of Discover, is not entitled to stand
in a better position than that of its assignor. We must therefore first
ascertain where the cause of action accrued in favor of Discover. Here,
it is evident that the contract causes of action accrued in Delaware,
the place where Discover sustained the economic injury in 1999 when King
allegedly breached the contract. Discover is incorporated in Delaware
and is not a New York resident. Therefore, the borrowing statute applies
and the Delaware three-year statute of limitations governs.

That does not end the inquiry, however, because in determining
whether Portfolio's action would be barred in Delaware, this Court must
"borrow" Delaware's tolling statute to determine whether under Delaware
law Portfolio would have had the benefit of additional time to bring the
(see GML, Inc. v Cinque & Cinque, P.C., 9 NY3d
, 951 [2007]). Delaware's tolling statute—Delaware Code §
8117—provides that:

"If at the time when a cause of action accrues against
any person, such person is out of the State, the action may be
commenced, within the time limited therefor in this chapter, after such
person comes into the State in such manner that by reasonable diligence,
such person may be served with process. If, after a cause of action
shall have accrued against any person, such person departs from and
resides or remains out of the State, the time of such person's absence
until such person shall have returned into the State in the manner
provided in this section, shall not be taken as any part of the time
limited for the commencement of the action."

Section 8117
was meant to apply only in a circumstance where the defendant had a
prior connection to Delaware, meaning that the tolling provision
envisioned that there would be some point where the defendant would
return to the state or where the plaintiff could effect service on the
defendant to obtain jurisdiction (see Williams v Congregation Yetev
, 2004 WL 2924490 *7 [SDNY 2004]). Indeed, Delaware's highest
court has held that the literal application of its tolling provision
"would result in the abolition of the defense of statutes of limitation
in actions involving non-residents" (Hurwich v Adams, 155 A2d
591, 593-594 [Del. 1959]).

There is no indication that King ever resided in Delaware, nor is
there any indication from the case law that Delaware intended for its
tolling provision to apply to a nonresident like King. Therefore, we
conclude that Delaware's tolling provision does not extend [*4]the three-year statute of limitations.
Moreover, contrary to Portfolio's contention, it is of no moment that
Portfolio was unable to obtain personal jurisdiction over King in
Delaware; this Court has held that it is not inconsistent to apply CPLR
202 in such a situation (see Insurance Co. of N. Am. v ABB Power
, 91 NY2d 180, 187-188 [1997]).

Applying Delaware's three-year statute of limitation, the instant
action should have been commenced not later than 2002. Because the
contract claims were not brought until 2005, they are time-barred in
Delaware, where the causes of action accrued, and therefore they are
likewise time-barred in New York upon application of the borrowing
statute. This holding is consistent with one of the key policies
underlying CPLR 202, namely, to prevent forum shopping by nonresidents
attempting to take advantage of a more favorable statute of limitations
in this State
(see Antone v General Motors Corp., 64 NY2d 20,
27-28 [1984]).

As a final matter, we note that only Portfolio sought summary
judgment below. Absent a cross motion for summary judgment by King, we
are not empowered to now grant that relief (see Stern v Bluestone, 12 NY3d 873, 876
[2009]; Falk v Chittenden, 11 NY3d 73, 78-79 [2008]; Merritt
Hill Vineyards v Windy Hgts. Vineyard
, 61 NY2d 106, 110-111

The bold is mine.

CPLR § 202 “Borrowing statute”

CPLR § 202 Cause of action accruing without the state

An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without the state where the cause of action accrued, except that where the cause of action accrued in favor of a resident of the state the time limited by the laws of the state shall apply.

Kat House Prods., LLC v Paul, Hastings, Janofsky & Walker, LLP
2010 NY Slip Op 02489 (App. Div., 1st, 2010)

When a nonresident sues in New York's courts on a cause of action accruing outside the state, our "borrowing statute" (CPLR 202) requires that the cause of action be timely under the limitation periods of both New York and the jurisdiction where the claim arose (see Global Fin. Corp. v Triarc Corp., 93 NY2d 525, 528 [1999]). Generally, a tort action accrues "at the time and in the place of the injury," and "[w]hen an alleged injury is purely economic, the place of injury usually is where the plaintiff resides and sustains the economic impact of the loss" (id. at 529).

Applying these principles, it is clear that plaintiffs' legal malpractice claim accrued in California, where their residences and principal place of business were located and the alleged economic injury was sustained, at the latest, in March 2006. Under that state's applicable one-year statute of limitations (Cal Civ Proc Code § 340.6), this action, commenced in November 2007, was time-barred.

Note the difference in 202 where the plaintiff is a resident of New York.