Limitations – A Dismissed Appeal and the Six-Month Extension
___ NY3d ___, 2015 NY Slip Op 04164
CPLR 205(a) allows a litigant a six-month extension of the limitations period in which to re-commence an action when suit was in fact timely commenced, but terminated for a reason other than a final judgment on the merits (there are a few other exclusions, not relevant here). In calculating the end point of the extension, it is of course essential to fix the date the first action terminated. The question presented to the Court of Appeals here was where to fix the termination date where the order of dismissal was appealed as of right, but the appeal was dismissed for failure to perfect.
Plaintiff originally sued in federal court, combining federal civil rights claims and state negligence claims. The federal claims were dismissed on September 30, 2011, and the District Court declined to retain jurisdiction over the state-law claims. Plaintiff appealed as of right to the Second Circuit, but failed to perfect her appeal. The Second Circuit dismissed the appeal effective July 10, 2012. The failure to perfect was intentional, the plaintiff having decided that she could proceed to trial in the state courts more quickly than she could prosecute her appeal in the Second Circuit. She commenced her action in Supreme Court, Onondaga County, on June 25, 2012. That is to say, her state court action was untimely if the federal action terminated with the District Court’s dismissal order, but timely if it terminated with the dismissal of the appeal.
The Court of Appeals held that the termination date, for purposes of CPLR 205 (a), was the date of dismissal of the appeal, and the state court action had therefore been commenced within the extension period.
In so holding, the Court followed its earlier precedents, primarily in Lehman Brothers, Inc. v. Hughes Hubbard & Reed, L.L.P., 92 NY2d 1014 (1998). There, the initial action had been in Texas District Court, but had been dismissed on jurisdictional grounds, for lack of minimum Texas contacts, on December 16, 1992. Plaintiff appealed as of right to the Texas intermediate appellate court, the Texas State Court of Appeals, which affirmed the dismissal on June 1, 1995. Plaintiff continued to seek further appellate review in Texas through 1996, but requests to the Court of Appeals for rehearing, to the Texas Supreme Court for discretionary review, and to the Supreme Court for rehearing were all denied. The plaintiff sought a writ of certiorari from the United States Supreme Court, which was denied on June 10, 1996. The plaintiff then sued on the same claims in the New York Supreme Court on July 11, 1996, more than six months from the affirmance, but less than six months from the last denial of discretionary review.
Defendant of course moved to dismiss based upon the statute of limitations, and the plaintiff claimed the benefit of the six-month extension of CPLR 205(a). The Court of Appeals held that the six-month extension period does not begin where a party pursues an appeal as of right, or where discretionary review is granted on the merits, since a final determination of the prior action has not occurred. A party cannot, however, defer the commencement of the six-month extension indefinitely by seeking successive discretionary appeals. The six-month extension period in Lehman Brothers therefore commenced on June 1, 1995, when the sole nondiscretionary appeal was concluded, and the New York action was time-barred.
Lehman Brothers and similar cases all involved final appellate determinations on the merits, but Malay involved an appellate dismissal for failure to perfect the appeal. The Court held that the distinction did not require a different result. The appeal, taken as of right, would be held to have terminated when the appeal was over, whether that ending came by way of a determination on the merits or a dismissal of the appeal, for whatever reason. The Court found this approach to be consistent with the remedial nature of CPLR 205 (a), allowing plaintiffs who have timely commenced an action, thereby putting the defendants on notice of the claim, to avoid limitations issues and obtain a determination on the merits. The Court acknowledged the possibility that a nondiscretionary appeal might be taken without any genuine intent to pursue it, merely to prolong the extension period, but found the possibility not significant enough to warrant a contrary result. Rather, the Court noted that the eventual dismissal of the appeal would end the process. The alternative to the Court’s ruling would be to require the plaintiff to commence a second action while the appeal of the first was still pending, which would be a waste of both the litigants’ and the court’s time and resources.
Two additional comments should be made. First, the Court expressly did not rule on whether the dismissal of the plaintiff’s appeal could be considered either a “voluntary discontinuance” or a dismissal for “neglect to prosecute,” either of which would rule out the six-month extension, since these issues were not preserved for review. Where the dismissal is for neglect to prosecute an action, the 2008 amendment to CPLR 205 (a) requires the dismissing court to specify the conduct leading to the dismissal, which must demonstrate a “general pattern of delay”. Whether this applies to the appellate dismissal for failure to perfect remains an open question.
Second, is a phenomenon related to the possibility of a discretionary appeal. If the initial action is dismissed on the merits, and the intermediate nondiscretionary appeal leads to an affirmance on the merits, the six-month extension begins as of the affirmance, as held in Lehman Brothers. If, some months later, a discretionary appeal is allowed, the extension period will be reset, as the action has still not been finally determined.
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