Capital One Bank v McGurk
2010 NY Slip Op 50974(U) [27 Misc 3d 1230(A)]
Decided on June 3, 2010
Civil Court Of The City Of New York, New York County
Singh, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected in part through June 8, 2010; it will not be published in the printed Official Reports.

Decided on June 3, 2010
Civil Court of the City of New York, New York County

Capital One Bank, Plaintiff,


Colleen McGurk, Defendant.

77036 CVN 2006

Appearances of counsel are:

David L. Robinson, Esquire

Attorney for Plaintiff

(516) 364-6006

Jennifer M. Addonizio, Esquire

Attorney for Defendant

(212) 897-5840

Anil C. Singh, J.

This is a credit card collection action. Plaintiff moves for summary judgment pursuant to CPLR 3212 and to amend the caption pursuant to CPLR 3025(b). Defendant opposes the motion and cross-moves for summary judgment dismissing the complaint pursuant to CPLR 202, contending that the law of Virginia applies to this action and that it is time-barred by that state's Statute of Limitations. Plaintiff opposes the cross-motion.

In October 1998, defendant Colleen McGurk, then a resident of Massachusetts, opened a credit card account with plaintiff Capital One Bank, which is headquartered in Virginia. The agreement contained a choice-of-law clause stating that it would be governed by the law of Virginia and federal law.

Plaintiff commenced this action by filing a summons and verified complaint in the Civil Court on December 28, 2006, alleging a cause of action for breach of contract and for an account stated.

Defendant filed a verified answer raising four affirmative defenses. Defendant's third affirmative defense asserts that the alleged debt is barred by the Statute of Limitations.

Plaintiff exhibits the sworn affidavit of Darina Johnson, a litigation support representative employed by plaintiff's Recovery Division. Copies of account statements that were mailed to defendant are attached to Ms. Johnson's affidavit as exhibit C. The statements are arranged in [*2]chronologic order. The most recent statement for the period "SEP 15 - OCT 14, 2001" stated that the "Payment Due Date" was November 14, 2001. Plaintiff maintains that defendant defaulted in payment and owes a balance of $11,788.12, with interest from October 15, 2001. Based on the annexed statements, defendant made her last payment on February 22, 2001.

In her cross-motion for summary judgment, defendant asserts that the applicable law governing the agreement is Virginia law. She points out that the parties' agreement clearly states that Virginia law applies to any issues arising under the agreement. Defendant maintains that the Statute of Limitations for breach of a written contract is five years (Virginia Code section 8.01-246(2)). The cause of action accrues and the limitation period commences to run from the date of the alleged breach (Virginia Code section 8.01-230; Arrington v. Peoples Security Life Ins. Co., 250 Va. 52, 55, 458 S.E.2d 289 (Va. 1995)).

Defendant asserts that Virginia law provides that an action based upon any unwritten contract, express or implied, must be brought within three years (Virginia Code 8.01-246(4)). Accordingly, the Statue of Limitations for an account stated is three years (Quadriga Art, Inc. v. Law Enforcement Alliance of America, 2005 WL 3789232 (Va. Cir. Ct. 2005); Ellison v. Weintrob, 139 Va. 29, 123 S.E. 512 (1924)).

Accordingly, defendant argues that Virginia's Statute of Limitations applies to this dispute and bars plaintiff from maintaining this action.

Plaintiff opposes and argues that the court should apply New York's six-year Statute of Limitations. Plaintiff asserts that under the contract's choice-of-law provision, this court is required to apply the substantive law of Virginia. However, Statutes of Limitation are generally considered procedural in New York because they are viewed as pertaining to the remedy rather than the right.

In support of this position, plaintiff cited Portfolio Recovery Assoc., LLC v. King, 55 AD3d 1074 [3d Dep't 2008], where the Appellate Division, Third Department held that New York's six-year Statute of Limitations and not Delaware's three-year Statute of Limitations governed the dispute.

Portfolio Recovery was reversed while the motion and cross-motion in the instant matter were sub judice (14 NY3d 410 [2010]). In that case, the defendant, a resident of Connecticut, obtained a credit card from Greenwood Trust Company, a Delaware corporation, with a principal place of business in Delaware. The agreement contained a Delaware choice-of-law provision. Greenwood Trust subsequently changed its name to Discover Bank. Defendant cancelled the credit card on January 27, 1999. In 2000, Discover assigned its rights to Portfolio. Five years after the account was cancelled, Portfolio brought the action against defendant, who was now a New York resident.

The Court of Appeals held that New York's borrowing statute, CPLR 202, should have been applied. This statute provides that where a nonresident sues on a cause of action that accrued outside New York, the claim must be timely both in New York and the state where the cause of action accrued. There, the Court wrote:

Applying Delaware's thee-year statute of limitation, the instant action should have been commenced not later than 2002. Because the contract claims were not brought until 2005, they are time-barred in Delaware, where the causes of action accrued, and therefore they are likewise time-barred in New York upon application of the borrowing statute. This holding is consistent [*3]with one of the key policies underlying CPLR 202, namely, to prevent forum shopping by nonresidents attempting to take advantage of a more favorable statute of limitations in this State.

Portfolio Recovery Associates, LLC v. King, 14 NY3d 410 [2010].

In the instant action, it is undisputed that defendant made her last payment on or about February 22, 2001. This action was commenced in New York on December 28, 2006. Both causes of action would be time-barred under Virginia's Statute of Limitations. Finally, the court notes that plaintiff has not shown that it would have additional time to commence this lawsuit under Virginia's tolling provision (Virginia Code section 8.01-229).

For the above reasons, plaintiff's motion for summary judgment and to amend the caption is denied, and defendant's cross-motion for summary judgment dismissing the complaint is granted.

The foregoing constitutes the decision and order of the court.

Date:June 3, 2010______________________________

New York, New YorkAnil C. Singh