AMES RAY, Plaintiff-Appellant, v. CHRISTINA RAY, Defendant-Appellee, John Doe Guarnerius Entities #1-20, Defendants.
No. 21-982-cv
United States Court of Appeals for the Second Circuit
DECEMBER 27, 2021
AUGUST TERM 2021; ARGUED: DECEMBER 16, 2021
* The Clerk of Court is directed to amend the caption as set forth above.
Before: CABRANES, PARKER, and LEE, Circuit Judges.
Plaintiff Ames Ray appeals from the March 25, 2021, order of the United States District Court for the Southern District of New York (Paul A. Engelmayer, Judge) granting Defendant Christina Ray‘s motion to dismiss under
RITA W. GORDON, New York, NY for Plaintiff-Appellant.
MATTHEW A. BEYER, Lewis Brisbois Bisgaard & Smith, LLP, New York, NY for Defendant-Appellee.
This appeal presents the following question: Does
I. BACKGROUND
In 1993, following their divorce, Plaintiff Ames Ray (“Ames“) invested $500,000 in the hedge fund business of Defendant Christina Ray (“Christina“). They entered into a contract under which Christina agreed to indemnify up to $350,000 in Ames‘s trading losses. Substantially all of Ames‘s $500,000 was lost, and Christina agreed to repay him under their contract, but did not do so. Ames sued Christina for breach of contract (the “1998 Action”). That litigation is ongoing.
Meanwhile, in April 2008, Christina mortgaged her co-op apartment for $500,000 and began transferring the proceeds to the John Doe Guarnerius Entities, various hedge funds. In two different state court lawsuits for fraudulent conveyance, filed in December 2010 (the “2010 Action“) and April 2014 (the “2014 Action“), Ames alleged that Christina mortgaged her apartment and transferred the proceeds in order to render herself insolvent and thereby avoid paying any debts that might arise from the 1998 Action. Both the 2010 and 2014 actions were dismissed by the New York State Supreme Court, and those dismissals were both affirmed by the Appellate Division, First Department.1
In August 2018, Ames filed a third fraudulent conveyance lawsuit against Christina (the “2018 Federal Action“), this one in the District Court for the Southern District of New York (George B. Daniels, Judge). This lawsuit alleged substantially the same theory as did the two prior state actions. Christina moved to dismiss the claims as time-barred based on a six-year statute of limitations,2 since her allegedly fraudulent transfers occurred between 2008 and 2009, more than six years prior to the filing of the 2018 Federal Action. Ames defended his claim as timely under New York‘s “Saving Statute,”
If an action is timely commenced and is terminated in any other manner than by a voluntary discontinuance, a failure to obtain personal jurisdiction over the defendant, a dismissal of the complaint for neglect to prosecute the action, or a final
judgment upon the merits, the plaintiff . . . may commence a new action upon the same transaction or occurrence or series of transactions or occurrences within six months after the termination provided that the new action would have been timely commenced at the time of commencement of the prior action . . . .3
It was (and is) undisputed by the parties that the 2014 Action was timely. The 2018 Federal Action would have been untimely, except that it was brought within six months of the First Department‘s February 2018 affirmance of the dismissal of the 2014 Action, thus bringing it under
In July 2020, Ames again sued Christina in New York State Supreme Court in the action that gives rise to this appeal (the “2020 Action“). Ames alleged fraudulent conveyance under the New York Debtor & Creditor Law (“DCL”) section 273, complaining, substantially as before, that Christina had mortgaged her apartment and transferred the proceeds in order avoid paying any debts that might arise from the 1998 Action. Christina removed the case to federal court based on diversity jurisdiction and moved to dismiss the complaint under
II. DISCUSSION
“We review de novo a district court‘s grant of a motion to dismiss, including its legal interpretation and application of a statute of limitations ....”7 “When sitting in diversity jurisdiction and determining New York state law claims, we must apply the law of New York....” 8
We affirmed the dismissal of the 2018 Federal Action in a summary order dated January 23, 2020.9 Ames filed his initial complaint in the 2020 Action on July 8, 2020. Ames argues that because the 2020 Action was filed within six months of our dismissal of the 2018 Federal Action (which was, itself, timely based on
As Judge Engelmayer explained, Ames “argues that [section] 205(a) effectively operates as a chain, making each successive lawsuit timely[,] provided that it was filed within six months of the termination of its predecessor (and that the initial action in
The primary issue in this appeal, then, is whether
We address
When answering questions of statutory interpretation, we begin with the language of the statute. If the statutory language is unambiguous, we construe the statute according to the plain meaning of its words. We discern plain meaning by looking to the statutory scheme as a whole and placing the particular provision within the context of that statute. Only when the terms are ambiguous or unclear do we consider legislative history and other tools of statutory interpretation.12
The interpretation of
This reading of
By contrast, Ames‘s reading does not make sense. It would render meaningless the statute‘s requirement that “the new action would have been timely commenced at the time of commencement of the prior action” and it would—as the facts of this case demonstrate—permit a litigant to frustrate the statute of limitations entirely by filing new actions within six months of dismissals, in perpetuity.15
It is unsurprising, then, that both federal and New York courts have consistently described
Finally, Ames invites us to certify the question of the proper interpretation of
Our certification of a question of law to the New York Court of Appeals is discretionary.17 Certification “must not be a device for shifting the burdens of this Court to those whose burdens are at least as great.”18 “In the past, we have certified questions to the New York Court of Appeals . . . where the statute‘s plain language does not indicate the answer . . . .” 19 But here, as discussed, the statute‘s plain text does indicate the answer.20
We have noted that “there are drawbacks to certification,” as the specific situation of this litigation demonstrates.21 First, “while certification can serve federalism objectives, significant federalism interests can also cut against certification,” particularly in diversity jurisdiction cases where “certification . . . substantially undermines the diverse litigant‘s entitlement to the federal forum.”22 Christina specifically chose to remove Ames‘s 2020 Action from state to federal court, and we see no reason to needlessly upset her right to removal here.
Additionally, as Judge Leval recently reminded us, “certification almost invariably results in substantial increase to the expenses the parties incur and inevitably delays the resolution of the case, sometimes for well more than a year.”23 Confronted with a series of litigations that has lasted more than two decades,24 we are hardly inclined to require that the parties appear before more tribunals than are necessary to resolve their claims.
III. CONCLUSION
To summarize, we hold that
We have reviewed all of the arguments raised by Ames on appeal and find them to be without merit. For the foregoing reasons, we AFFIRM the March 25, 2021, order of the District Court.