Wultz v. Bank of China Ltd.

• Decision Date: 16 April 2013
• Docket Number: 11 Civ. 1266 (SAS)
• Parties: SHERYL WULTZ, individually, as personal representative of the Estate of Daniel Wultz, and as the natural guardian of plaintiff Abraham Leonard Wultz; YEKUTIEL WULTZ, individually, as personal representative of the Estate of Daniel Wultz, and as the natural guardian of plaintiff Abraham Leonard Wultz; AMANDA WULTZ; and ABRAHAM LEONARD WULTZ, minor, by his next friends and guardians Sheryl Wultz and Yekutiel Wultz, Plaintiffs, v. BANK OF CHINA LIMITED, Defendant.
• Court: U.S. District Court — Southern District of New York

SHERYL WULTZ, individually, as personal representative

of the Estate of Daniel Wultz, and as the natural guardian of plaintiff

Abraham Leonard Wultz; YEKUTIEL WULTZ, individually,

as personal representative of the Estate of Daniel Wultz,

and as the natural guardian of plaintiff Abraham Leonard Wultz;

AMANDA WULTZ; and ABRAHAM LEONARD WULTZ, minor,

by his next friends and guardians Sheryl Wultz and Yekutiel Wultz, Plaintiffs,

v.BANK OF CHINA LIMITED, Defendant.

11 Civ. 1266 (SAS)

UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK

Dated: April 15, 2013

Dated: April 16, 2013

OPINION & ORDER

SHIRA A. SCHEINDLIN, U.S.D.J.:

I. INTRODUCTION

This suit arises out of a terrorist attack in Tel Aviv, Israel on April 17, 2006. The attack injured Yekutiel Wultz and led to Daniel Wultz's death on May 14, 2006. Four members of the Wultz family brought suit against Bank of China ("BOC") on August 28, 2008, more than two years later, alleging acts ofinternational terrorism and aiding and abetting international terrorism under the Antiterrorism Act,¹ as well as non-federal claims that were originally pled under Israeli law, but later converted to claims under Chinese law.² The general facts and procedural history of the case were laid out in previous opinions, and familiarity with them is assumed.³

In an Opinion on November 5, 2012, I dismissed all of plaintiffs' non-federal claims except one, which was originally pled as a "vicarious liability" claim.⁴ In response to a request from plaintiffs, I also granted the parties an opportunity to brief BOC's newly asserted argument that plaintiffs' "vicarious liability" claim was time-barred under New York's "borrowing statute."⁵ That briefing is the subject of this Opinion.

For the reasons stated below, plaintiffs' remaining non-federal claimis time-barred under New York's "borrowing statute." BOC's request to amend its Answer to assert the limitations defense to plaintiffs' remaining non-federal claim is granted, as is BOC's request simultaneously to dismiss the claim.

II. DISCUSSION

"'When diversity of citizenship is the basis of jurisdiction, a federal court must look to the statute of limitations of the state in which it sits.'"⁶ "New York courts generally apply New York's statute of limitations even when the injury giving rise to the action occurred outside New York. This general rule, however, is subject to a traditional statutory exception, New York's 'borrowing' statute."⁷

Under New York's borrowing statute,⁸ "when a nonresident plaintiffsues upon a cause of action that arose outside of New York, the court must apply the shorter limitations period, including all relevant tolling provisions, of either: (1) New York; or (2) the state where the cause of action accrued."⁹ "For the purposes of the borrowing statute, a cause of action accrues where the injury is sustained rather than where the defendant committed the wrongful acts."¹⁰ "Hence, an action by a nonresident on a foreign cause of action is untimely if it is barred under the law of either New York or the state where the injury occurred."¹¹

The burden of proving that a particular statute of limitation has expired falls on the defendant. However, the plaintiff bears the burden of proving that a particular statute of limitation has been tolled. Finally, when another state's statute of limitations is considered pursuant to N.Y. C.P.L.R. 202, the party seeking to benefit therefrom bears the burden of proof.¹²

Plaintiffs assume that their remaining non-federal claim accrued in China.¹³ Because plaintiffs' injury was sustained in Israel, however, BOC is correct that plaintiffs' cause of action accrued in Israel for the purposes of theborrowing statute.¹⁴ The parties agree that Israel has a seven-year statute of limitations for tort claims.¹⁵ Thus, as BOC states, "[a]ll conceivably relevant New York limitations periods are shorter than Israel's generally-applicable seven-year limitations period."¹⁶ The viability of plaintiffs' remaining non-federal claim depends on whether the claim is time-barred under the applicable New York limitations period.

"In determining which limitations period is applicable to a given claim, [New York courts] . . . look to the substance of the allegations rather than to the characterization of those allegations by the parties."¹⁷ "Plaintiffs may not plead untimely intentional tort claims as negligence claims to avoid the one year statute of limitations applicable to intentional torts."¹⁸ Where the substance of a non-New York claim does not clearly correspond to the substance of any claim under NewYork law, "the Court must apply the statute of limitations that applies to the 'most . . . analogous' cause of action."¹⁹

Plaintiffs argue that their remaining non-federal claim is more closely analogous to a negligence claim than an intentional tort, while BOC argues that plaintiffs' claim is most analogous to an aiding-and-abetting claim where the primary violation was an intentional tort.²⁰ BOC is correct. Under New York law,

[a] plaintiff seeking to establish a cause of action for aiding and abetting . . . must show: "(1) the existence of a . . . violation by the primary (as opposed to the aiding and abetting) party; (2) 'knowledge' of this violation on the part of the aider and abettor; and (3) 'substantial assistance' by the aider and abettor in the achievement of the primary violation."²¹

These elements capture the substance of plaintiffs' remaining non-federal claim. The claim states that "BOC provided PIJ with banking services which enabled, facilitated, supported and assisted PIJ to carry out the Terrorist Bombing."²² The claim also incorporates by reference plaintiffs' allegations that BOC "had actual knowledge" that its customer was transferring funds to the PIJ "for the purpose ofcarrying out terrorist attacks," and that those transfers "enhanced the PIJ's ability to plan, prepare for and carry out such attacks."²³ Moreover, plaintiffs themselves previously argued, and this Court agreed, that plaintiffs' "vicarious liability" claim "is most akin to one for aiding and abetting," at least in the context of Israeli law.²⁴ Similarly, in the Opinion dismissing all but one of plaintiffs' non-federal claims under Chinese law, I relied on BOC's expert's argument that plaintiffs' "vicarious liability" claim could be categorized under a form of Chinese joint tort liability "'for one who aids or abets another in the commission of a tort.'"²⁵

"The statute of limitations for each aiding and abetting claim isdetermined by the underlying tort."²⁶ BOC argues that "the underlying torts of the primary tortfeasors — the PIJ — either are intentional torts (assault, battery, and intentional infliction of emotional distress) or would give rise to a 'civil action for wrongful death,'"²⁷ and thus would be governed by the one-year limitations period for the former or the two-year period for the latter.²⁸

Plaintiffs do not squarely address BOC's argument that plaintiffs' "vicarious liability" claim, based on the substance of plaintiffs' allegations, is best understood for limitations purposes under New York law as a claim of aiding and abetting intentional torts (or acts giving rise to a wrongful death claim).²⁹ Instead, plaintiffs argue against BOC's alternate argument that plaintiffs' "vicarious liability" claim is "in substance an intentional tort" claim.³⁰

In the absence of a persuasive counterargument, I agree with BOC that the underlying torts of the PIJ were either intentional torts or acts giving rise to a wrongful death action. Because plaintiffs' "vicarious liability" claim is in substance an aiding and abetting claim, and because the limitations period for an aiding and abetting claim is determined by the underlying tort, plaintiffs' "vicarious liability" claim is governed by, at most, the two-year statute of limitations for wrongful death actions. As noted earlier, the terrorist attack that killed Daniel Wultz and injured Yekutiel Wultz took place on April 17, 2006, and Daniel Wultz died on May 14, 2006.³¹ Plaintiffs filed this action on August 28, 2008, more than two years later.³² Plaintiffs' remaining non-federal claim is therefore time-barred, unless the limitations period was tolled.

Plaintiffs' final defense of their "vicarious liability" claim is to argue that equitable tolling under New York law is a question of fact requiring fact discovery.³³ BOC notes, correctly, that "'New York is not especially hospitable to failures to sue within the periods prescribed by law.'"³⁴ Equitable tolling isintended "'to prevent misconduct on the part of a defendant that makes it unfair for such defendant to hide behind the [limitations] defense and employ it as a weapon to defeat a legitimate cause of action.'"³⁵ Plaintiffs have alleged no facts upon which to conclude that BOC "has actively concealed its involvement"³⁶ with the PIJ and Hamas, and therefore that plaintiffs are entitled to equitable tolling. Plaintiffs' argument that "BOC's staunch resistance to fact discovery . . . underscores the possibility it engaged in affirmative efforts to conceal its involvement" is conceded to be speculative, and is an insufficient basis for ordering fact discovery as to equitable tolling.³⁷ Nothing done by BOC prevented plaintiffs from filing suit in August 2008, and any discovery obstruction after that point does not provide evidence of prior concealment.

III. CONCLUSION

For the foregoing reasons, BOC's request to amend its Answer to assert the limitations defense to plaintiffs' claim is granted, as is BOC's requestsimultaneously to dismiss the claim as time-barred.³⁸

SO ORDERED:

____________________

Shira A. Scheindlin

U.S.D.J.

Dated: April 5, 2013

New York, New York

- Appearances -

For Plaintiffs:

Lee S. Wolosky, Esq.

Steven I. Froot, Esq.

Marilyn C. Kunstler, Esq.

Jaime Sneider, Esq.

Boies, Schiller & Flexner LLP

For Defendant:

Mitchell R. Berger, Esq.

Patton Boggs LLP (DC)

Zachary Carter, Esq.

Lanier...