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July 2018

New York Partners Obtain Declaratory Judgment on Issue of First Impression, Extending Statute for First Time in New York

Gordon Rees Scully Mansukhani New York Commercial Litigation partners Mark Beckman and Ryan Sestack persuaded a New York Supreme Court justice to grant a motion for declaratory judgment which will have the effect of barring certain future claims by a pro se plaintiff, whom the New York Post has titled the “Biggest ‘Suer’ in the City” against the firm’s client, a multi-national insurance company. The plaintiff originally filed an action in federal court in 2014, claiming discrimination under the ADA as a result of alleged changes in the client’s reimbursement policy for mental health and psychiatric services under the plaintiff’s major medical health insurance. The district court granted Gordon & Rees’ motion to dismiss in 2016, with prejudice, but only as to the discrimination claim, stating it did not exert supplemental jurisdiction over any possible state claims.

As a result, the plaintiff immediately filed a second action, in state court, for the mental health reimbursement claims as well as two additional claims. Gordon & Rees again moved to dismiss. A lengthy process ensued, ultimately resulting in the plaintiff filing an amended complaint which did not include the claim regarding reimbursement for mental health claims. Around the same time, the plaintiff also filed a new action, again in the federal district court, for the mental health claims.

Gordon & Rees attorneys consented to the amended complaint, but moved for a declaration from the court to apply the terms of CPLR § 205, which is New York’s savings rule when an action is terminated. It provides that if an action is terminated in any way other than by, among other things, voluntary discontinuance, the plaintiff may commence a new action regarding the same claims within six months and maintain the benefit of the filing date of the terminated action for statute of limitations purposes. Here, the plaintiff did not voluntarily withdraw the action but instead voluntarily withdrew a set of claims within the action.

In the absence of any precedent or scholarly analysis, Gordon & Rees argued that the logic and policy reasons behind the statute apply equally to voluntary withdrawals of claims as to withdrawals of actions, and that the prejudice and unfairness to the client warranted such an extension of the rule. After full briefing and a spirited oral argument, the court granted the motion, for what is believed to be the first time in the state of New York.

Mark A. Beckman
Ryan J. Sestack