On March 29, 2016, Justice Marcy Friedman of the New York Supreme Court rejected the trustee’s attempt to renew previously dismissed claims in ACE Securities v. DB Structured Products, Inc. As we previously reported, the trustee re-filed this action after the First Department dismissed the prior lawsuit related to the same trust, a dismissal that the Court of Appeals later affirmed.

In granting the motion to dismiss, the court rejected the trustee’s reliance on CPLR 205(a) as grounds for reviving the previously dismissed lawsuit. The Court held that CPLR 205(a) allows only the same plaintiff that commenced the prior action to re-commence a second action under the terms of that rule. Because the prior action had been commenced by the certificateholders, not the trustee, the trustee was not the same plaintiff and could not take advantage of CPLR 205(a). The Court rejected the trustee’s argument that it and the certificateholders were attempting to litigate identical interests, holding that the certificateholders in the prior action did not possess a cause of action to which the trustee succeeded. The court also considered the defendant’s alternative argument that CPLR 205(a) was not available because the prior lawsuit was untimely. The prior lawsuit was filed on the six-year anniversary of the allegedly breached representations and warranties, but neither the trustee nor the certificateholders had complied with the contract’s notice and cure “repurchase protocol” at the time of filing, a failing that both the First Department and Court of Appeals relied upon in dismissing the prior case. The Court held that to the extent the dismissal was based on the non-compliance with the repurchase protocol, it should properly be characterized as a dismissal for failure to comply with a condition precedent, not a dismissal on timeliness grounds. However, the First Department also held that the trustee’s complaint in the prior lawsuit had been untimely because it did not relate back to the certificateholders’ summons with notice. Therefore, the trustee’s failure to file a timely complaint in the first lawsuit provided a second basis for why the trustee could not rely on CPLR 205(a) to re-file the previously dismissed lawsuit. Order.