Classic Schooner Adventures, Inc. v. Acadia Insurance Company

Filing 28

ORDER granting 11 Motion for Summary Judgment; adopting Report and Recommendation as modified re 24 . Clerk of court to close case. Signed by Hon. Richard J. Arcara on 6/14/2010. (JMB)

UNITED STATES DISTRICT COURT W E S T E R N DISTRICT OF NEW YORK

C L A S S IC SCHOONER ADVENTURES, INC.,

Plaintiff, v. A C A D IA INSURANCE COMPANY,

DECISION AND ORDER 0 9 -C V -5 8 0 A

D e fe n d a n t.

T h is case was referred to Magistrate Judge Hugh B. Scott, pursuant to 28 U .S .C . § 636(b)(1). On November 17, 2009, defendant Acadia Insurance C o m p a n y filed a motion for summary judgment. On February 19, 2010, M a g is tra te Judge Scott filed a Report and Recommendation recommending that d e fe n d a n t's motion be granted. Plaintiff Classic Schooner Adventures, Inc. filed objections on March 4, 2 0 1 0 . Defendant filed a response on March 16, 2010. The Court held oral a rg u m e n t on May 24, 2010. P u rs u a n t to 28 U.S.C. § 636(b)(1), this Court must make a de novo d e te rm in a tio n of those portions of the Report and Recommendation to which o b je c tio n s have been made. Upon a de novo review of the Report and R e c o m m e n d a tio n , and after reviewing the submissions and considering the p o in ts raised at oral argument, the Court adopts the Report and R e c o m m e n d a tio n as modified below.

The Court modifies the Report and Recommendation only to expand on the s ig n ific a n c e of Magistrate Judge Scott's finding that "Classic Schooner has an u n e xp la in e d delay from September 19, 2008 (when it entered the stipulation of d is c o n tin u a n c e ), to May 13, 2009 (when it commenced the new action)." (Dkt. N o . 24 at 11.) Unlike the case that plaintiff had commenced in Florida, plaintiff c o m m e n c e d this diversity case1 in state court. New York law governs whether th is case had been timely in state court when the complaint was filed there. See W a lk e r v. Armco Steel Corp., 446 U.S. 740, 751 (1980) ("In our view, in diversity a c tio n s Rule 3 governs the date from which various timing requirements of the F e d e ra l Rules begin to run, but does not affect state statutes of limitations.") (c ita tio n omitted); Cantor Fitzgerald Inc. v. Lutnick, 313 F.3d 704, 709 (2d Cir. 2 0 0 2 ) ("[I]t is well established that in diversity cases state law governs not only th e limitations period but also the commencement of the limitations period.") (c ita tio n s omitted). Plaintiff filed this case well beyond the one-year limitations p e rio d set in the policy, but New York law would determine whether and how this c a s e could relate back to the Florida case. The Court would have only diversity jurisdiction under 28 U.S.C. § 1332. T h e Court would lack admiralty jurisdiction under 28 U.S.C. § 1333 because the a lle g e d property damage occurred while plaintiff's boat was deliberately lifted out o f the water and out of navigation. See Complaint of Dickenson, 780 F. Supp. 9 7 4 , 975­76 (E.D.N.Y. 1992) (finding no admiralty jurisdiction where the boat in q u e s tio n was "in dry dock, 50 feet from the water" for repairs).
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"If an action is timely commenced and is terminated in any other manner th a n by a voluntary discontinuance . . . , the plaintiff . . . may commence a new a c tio n upon the same transaction or occurrence or series of transactions or o c c u rre n c e s within six months after the termination provided that the new action w o u ld have been timely commenced at the time of commencement of the prior a c tio n and that service upon defendant is effected within such six-month period." N .Y . CPLR 205(a) (emphasis added). "The purpose of § 205(a) is to avert u n in te n d e d and capricious unfairness by providing that if the first complaint was tim e ly but was dismissed for such curable reasons, the suit may be reinstituted w ith in six months of the dismissal. Given its remedial importance in guarding a g a in s t capricious, unfair deprivation of a valuable claim, the [New York] Court of A p p e a ls has cautioned that § 205(a)'s broad and liberal purpose is not to be fritte re d away by any narrow construction." Hakala v. Deutsche Bank AG, 343 F .3 d 111, 115 (2d Cir. 2003) (internal quotation marks and citation omitted). Here, plaintiff filed the Florida case timely. Rather than make any motions to c h a n g e venue or otherwise to change its parties and posture, plaintiff d is c o n tin u e d the Florida case voluntarily.2 Plaintiff then filed the present case in As Magistrate Judge Scott did in different words, this Court rejects any s u g g e s tio n by plaintiff that its professional counsel somehow were tricked into a d is c o n tin u a n c e with greater implications than they realized. (See, e.g., Dkt. No. 2 2 -2 at 3 ("Acadia falsely misrepresented that the discontinuance would be w ith o u t prejudice, where instead there was a strategy to use the statute of lim ita tio n s against Classic Schooner when the action was brought to a different fo ru m . Classic Schooner relied on the discontinuance being without prejudice w h e n it agreed to the stipulation.").) 3
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state court more than six months later. Because of the voluntary discontinuance a n d the late recommencement, CPLR 205(a) was not available in state court to lin k the present case back to the Florida case. W ith o u t the protections of CPLR 2 0 5 (a ), this case was untimely when it was in state court. As a result, no "civil a c tio n " existed that could be removed to this Court under Rule 81(c)(1) of the F e d e ra l Rules of Civil Procedure. Accordingly, for the reasons set forth above and in Magistrate Judge S c o tt's Report and Recommendation, defendant's motion for summary judgment is hereby granted. The Clerk of the Court is directed to close this case. SO ORDERED.

s/ Richard J. Arcara
HONORABLE RICHARD J. ARCARA UNITED STATES DISTRICT JUDGE DATED: June 14, 2010

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