Are New York Executive Orders a True Tolling of Statute of Limitations or Merely a Grace Period?
Two Contrary Opinions on How Long Litigants Will Be Given to File Lawsuits After Orders Expire
- Every state requires a lawsuit to be filed within a given time — i.e., before the statute of limitations expires. In New York, a breach of contract action must be filed within six years of the alleged "breach." Absent a "tolling" or extension of the statute of limitations, failure to meet this filing deadline may be fatal to the lawsuit.
- Understanding that potential plaintiffs may not be in a position to file a lawsuit on a timely basis during COVID-19, New York Gov. Andrew Cuomo, along with the governors of other states, have issued Executive Orders giving litigants the opportunity to file new lawsuits after the crisis is over.
- This Holland & Knight alert focuses on the New York Executive Orders and examines two competing theories on how long litigants have to file lawsuits following the expiration of the Executive Orders and the end of the COVID-19 crisis. Which view is right and which is wrong has yet to be fully decided — and such a final decision may not be forthcoming for many years.
Every state requires a lawsuit to be filed within a given time — i.e., before the statute of limitations expires. In New York, a breach of contract action must be filed within six years of the alleged "breach." For example, if a breach occurred on June 1, 2017, the deadline to file a complaint would become June 1, 2023. Absent a "tolling" or extension of the statute of limitations, failure to meet the June 1, 2023, filing deadline could be fatal to the lawsuit. Understanding that potential plaintiffs may not be in a position to file a lawsuit on a timely basis during COVID-19, New York Gov. Andrew Cuomo, along with governors in many other states, have issued Executive Orders giving litigants the opportunity to file new lawsuits after the crisis is over.
This Holland & Knight alert focuses on the New York Executive Orders and examines two competing theories on how long litigants have to file lawsuits following the expiration of the Executive Orders and the end of the COVID-19 crisis.
Background and Interpretations
On March 20, 2020, Gov. Cuomo issued Executive Order 202.8, which declared a state of emergency and set aside certain deadlines – and specifically said such deadlines were "tolled" until April 19, 2020. Executive Order 202.8 was extended through subsequent Executive Orders, the latest of which is 202.67 and extended the deadline through Nov. 3, 2020. See New York Executive Orders 202.14, 202.28, 202.38, 202.48, 202.55, 202.55.1 and 202.60. Interestingly, some of these Executive Orders use "suspension" when discussing the extension, while others continue to use the "toll." See, for example, 202.38 (suspension) vs. 202.60 (tolling).
A number of authors have interpreted these Executive Orders as a tolling of the statute of limitations. See Thomas A. Moore and Matthew Gaier, "Medical Malpractice, Toll on Statute of Limitations During the COVID-19 Emergency," New York Law Journal, June 1, 2020; Patrick M. Connors, New York Practice, "The COVID-19 Toll: Time Periods and the Courts During Pandemic," New York Law Journal, July 17, 2020. Citing to the language used by Executive Order 202.8, and keeping in mind that there are some nuances to their position, these authors argue that the plain language means that the final number of days that the Executive Orders are in place would be added to the statute of limitations period. To put it another way, if the Executive Orders last for 228 days (the Executive Orders at issue have been in place since March 20, 2020, and are currently set to expire on Nov. 3, 2020), as many as 228 days would be added to the statute of limitations. Revisiting our breach of contact example, this theory would allow the complaint to be filed by Jan. 15, 2024 (June 1, 2023, plus 228 days).
A contrary opinion, however, has been put forward by Judge Thomas Whelan, a New York State Supreme Court Justice in Suffolk County. In his article, "Executive Orders: A Suspension, Not a Toll of the SOL," New York Law Journal, Oct. 7, 2020, he argues that the Executive Orders issued by Gov. Cuomo do not amount to a "toll" that stops the running of a limitations period. Rather, he asserts that the Executive Orders are more akin to a suspension of the statute of limitations, i.e., a grace period while the Executive Orders are in place.
The difference is substantial, and can, as Judge Whelan points out, lead to plaintiffs filing actions after the statute of limitations has expired.
Under Judge Whelan's theory, a cause of action where the statute of limitations expires during the "suspension period" of the Executive Orders, requires a party to file suit no later than the day after the last Executive Order concludes. A party is in essence given a grace period while the Executive Orders are in place. This position differs from those who assert that 228 days, the number of days the Executive Orders are currently set to be in place, would be added to the SOL period.
In the article, Judge Whelan notes that although Gov. Cuomo's original Executive Order, 202.8, did use the word "tolled," subsequent extensions did not, and instead used the phrase "temporarily suspend." Judge Whelan examines similar Executive Orders issued in New York and other states after Sept. 11, 2001, as well as after Superstorm Sandy in 2012, and how appellate courts interpreted them as a suspension rather than a tolling of the statute of limitations, and he uses these decisions to support his position. It is worth noting that Moore, Gaier and Connors see Executive Order 202.8 and subsequent orders as being more expansive than those issued in the wake of Sept. 11 and Superstorm Sandy. Judge Whelan further questions whether Gov. Cuomo even has the power to "toll" the statute of limitations — which other authors assert is within his power.
Conclusion and Considerations
Which view is right and which is wrong has yet to be fully decided — and such a decision may not be forthcoming for many years. Taking a conservative approach means applying Judge Whelan's theory, treating the Executive Orders as a grace period and filing an action within the ordinary statute of limitations period — or the day after New York's Executive Orders expire. Parties are still able to enter into tolling agreements as normal, preserving the statute of limitations. When suing on a note or similar obligation that has been accelerated, care should be taken to decelerate the note to protect debts incurred within the past six years.
Although the statute of limitations is an affirmative defense that can be waived if the defendant fails to raise it, such a defense may not be as ironclad as it was previously.
Joshua Prever is not a licensed attorney in the state of New York. He is licensed in Florida, Virginia and the District of Columbia.
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