ALBANY, N.Y., October 19 – The New York Court of Appeals has ruled that New Yorks CPLR 205 (a) does not permit Reliance Insurance Company (RIC) to re-file an action originally brought by Reliance Insurance Company of New York (RNY) and dismissed for naming the wrong plaintiff.

RIC issued construction surety bonds to contractors hired by the Lindenwald Union Free School District to renovate several school buildings. When two of the contractors filed for bankruptcy, RIC assumed responsibility for completing the work and purchased metal curtain wall panels from a predecessor of PolyVision Corporation. The panels rusted within months, which RIC alleged was due to manufacturing defects, and the cost for replacement was $40,000 for panels and labor. RNY, a wholly owned subsidiary of RIC, filed suit against PolyVision in the Supreme Court. Supreme Court granted PolyVisions action on the ground it was commenced by the wrong plaintiff. The court said RIC was the true party in interest because it had issued the surety bonds, not RNY, and therefore RNY had no right to to seek reimbursement.

RIC then commenced an action in U.S. District Court for the Eastern Division of New York, relying on CPLR Section 205 (a) savings statute giving a plaintiff six months to commence a new action based on the same transaction or occurrence, despite the running of the statute of limitations, if dismissal of the prior action was not based on voluntary discontinuance, failure to obtain personal jurisdiction, failure to prosecute, or a final judgment on the merits.

District Court dismissed, saying section 205 (a) applies only where the plaintiff is the same person or entity whose rights are sought to be vindicated in both actions. Since RIC was never party to the dismissed state action, District Court said it could not invoke the savings statute. The U.S. Court of Appeals for the Second Circuit then asked New Yorks highest court to resolve the certified question: Does New York CPLR Section 205 (a) allow a corporation to re-file an action within six months when a previously, 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?

The New York Court of Appeals concluded it does not. Chief Judge Judith S. Kaye, in a unanimous decision, said, Pivotal here is thatRIC is seeking its own, separate, rights, rather than the rights of the plaintiff in the original action. We agree with the conclusion of the District Court that (t)he common thread running through cases applying CPLR 205 in cases where the error in the dismissed action lies only in the identity of the plaintiff, is the fact that it is the same person or entity whose rights are sought to be vindicated in both actions. As that court aptly stated, The plaintiff in the new lawsuit may appear in a different capacity, such as a duly-appointed administrator, but the identity of the individual on whose behalf redress is sought, [must] remain the same. That is the situation the Legislature addressed in CPLR (a), but that is not the case here. RIC is not RNY in a different capacity.

Kaye added that the court is mindful of the potential ramifications of a rule allowing a different, related corporate entity the benefit of the statutory grace period, not knowing precisely what that means or portends. What may be a genuine corporate twin or alter ego in one case could be a far-flung affiliate in another. Under these circumstances, we prefer to read CPLR 205 (a) as it was written by the Legislature, and has consistently been applied by this court.

Judge Kaye is joined in the decision by Judges Ciparick, Graffeo, Read, Smith, Pigott, and Jones.