Plaintiff's Claims Tolled During Pendency of Earlier Federal Action

On February 22, 2018, Justice Masley of the New York County Commercial Division issued a decision in Mullin v. WL Ross & Co. LLC, 2018 NY Slip Op. 30330(U), holding that a plaintiff's claims were tolled during the pendency of an earlier federal action, explaining:

Pursuant to CPLR 205 (a), where an action is timely commenced, and is dismissed on grounds other than on the merits, the plaintiff:

may commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months after the termination provided that the new action would have been timely commenced at the time of commencement of the prior action and that service upon defendant is effected within such six-month period

Where both sides agree to dismiss the prior action without prejudice for procedural reasons and to recommence the action, then the remedial effect afforded by CPLR 205 (a) is appropriate. Here,
defendants do not contest Mr. Mullin's allegation that they contended that the court in the Federal Action lacked subject matter jurisdiction, and agreed to Mr. Mullin discontinuing the Federal Action and refiling the complaint before the state court. Thus, for statute of limitations purposes, the date on which the breach of contract, breach of fiduciary duty, and accounting claims were asserted against defendants is December 30, 2016, the date on which Mr. Mullin filed the Federal Action.

(Internal quotations and citations omitted).

It is not unusual for the statute of limitations to be an issue in complex commercial litigation. Contact Schlam Stone & Dolan partner John Lundin at jlundin@schlamstone.com if you or a client have questions regarding whether a claim is barred by the statute of limitations.