Saving Provision of CPLR 205(a) Does Not Apply To A Different Related Corporate Entity

CPLR 205(a) is a savings provision which adds a six month grace period to the statute of limitations in certain situations. It provides:

If an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits, the plaintiff, or, if the plaintiff dies, and the cause of action survives, his or her executor or administrator, 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.

Last Thursday (October 11th) in Reliance Ins. Co. v Polyvision Corp., 2007 NY Slip Op 07500, the Court of Appeals was asked in a certified question from Second Circuit the following:

Does New York CPLR § 205(a) allow a corporation to refile an action within six months when a previous, timely-filed action has mistakenly been commenced in the name of a different, related corporate entity, and has been dismissed for naming the wrong plaintiff? (474 F3d 54, 60 [2007]).

The Court of Appeals concluded that it did not. The Court stated that it has never read the words “the plaintiff” in the statute to include an individual or entity other than the original plaintiff. And it reasoned that to allow a separate but related corporate entity to benefit from the grace period of CPLR 205(a) would only breathe life into stale claims, and prevent corporations from exercising the minimal care necessary to determine, before bringing suit, which of its family members had been wronged.

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