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Will Moving to NY from CA Hurt Me on SOL?

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Hi, there.

 

I have several alleged credit card debt accounts that are due to hit California's SOL of 4 years at the end of 2014 (some may already have hit SOL if Choice of Law were to be invoked, since the several of the OCs were incorporated in DE).  For various reasons, I'm considering moving to NY this summer and am concerned that I may then get stuck with their longer SOL period (6 years).  Does anyone know if NY is a Choice of Law state, favoring the consumer like California?  I'd hate to "hit the reset button" on these alleged accounts.  

 

Thanks for any insights you may have!

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Hi, there.

 

I have several alleged credit card debt accounts that are due to hit California's SOL of 4 years at the end of 2014 (some may already have hit SOL if Choice of Law were to be invoked, since the several of the OCs were incorporated in DE).  For various reasons, I'm considering moving to NY this summer and am concerned that I may then get stuck with their longer SOL period (6 years).  Does anyone know if NY is a Choice of Law state, favoring the consumer like California?  I'd hate to "hit the reset button" on these alleged accounts.  

 

Thanks for any insights you may have!

 

New York is not known as a "consumer" friendly state.  While I believe they do have a choice of law it isn't a good one.  By moving from CA to a state with a longer SOL you could indeed find yourself subject to a longer SOL.  

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Odds are you will end up with a longer SOL. You need to wait until the Calif. SOL runs by several months to be sure. Your inviting a lot of trouble if you don't. And also trying to select the SOL the card holder is located in if shorter does not always work.

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§ 202. Cause of action accruing without the state. An action based
upon a cause of action accruing without the state cannot be commenced
after the expiration of the time limited by the laws of either the state
or the place without the state where the cause of action accrued, except
that where the cause of action accrued in favor of a resident of the
state the time limited by the laws of the state shall apply.

 

If you move to NY before the SOL is up in CA, you might face the NY SOL.    The reason is because once you leave CA, the SOL is tolled in that state.  If the SOL is up in CA, § 202 may apply to you.

 

Read Portfolio Recovery Assoc., LLC v. King.

 

http://scholar.google.com/scholar_case?case=11248193028637771414&q=%22CPLR+202%22&hl=en&as_sdt=4,216&as_ylo=2010

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We had a situation similar to yours, with a move from California to Michigan, involving 2 JDB lawsuits filed in Michigan court. In the first case, we prevailed with the argument that (via Michigan's borrowing statute) both California and Delaware SOLs had expired prior to the move. Under Mich. law, all essential elements occurred while domiciled in California: entering into the alleged contract; default; assignment to JDB; running out of the applicable SOL. We researched laws/cases in the 3 states, plus the US Supreme Court. It was very time-consuming for ignorant newbies. We also argued the typical but very valid JDB lack of standing, inadmissible hearsay docs to be safe. Both JDBs even went so far as to allege a phantom payment to reset the SOL!  Later, both JDBs settled FDCPA lawsuits that I'm not allowed to talk about. 

 

Your situation will depend on the specific facts of each debt account, and will entail making a complicated argument for each--should you be sued. Being sued while still a CA resident is also a possibility if the SOL date is nigh.   If you're sued in NY for a debt that was time-barred in California before your move, that's one argument. If you're sued in NY for debt that wasn't time-barred under CA 4-yr. SOL prior to your move, but is time-barred under the OC contract choice of law via NY's borrowing statute--and the OC is not a NY resident--BV80 has given you the place to start your research. Proof of your residency with dates may be required. Research the legal definition of domicile if you have any blurry lines for dates. You may go back and forth between CA and NY before deciding to become legally domiciled in NY as of a certain date. You may be subject to the JDB arguing you tolled the SOL while out of CA. It can get complicated if you rely only on the SOL defense. 

 

This California case lays out the argument that the OC credit card contract (Delaware) choice-of-law includes the 3-year SOL:

Resurgence Financial, LLC v. Chambers, 173 Cal. App. 4th Supp. 1 (Cal: Appellate Div., Superior 2009).

http://scholar.google.com/scholar_case?case=10121350625093322993&q=resurgence+financial+v+pamela+chambers&hl=en&as_sdt=4,5

"We hold that (1) Delaware's statute of limitations governs Resurgence's causes of action because the credit card agreement contains a Delaware choice-of-law clause and one of the original contracting parties was a Delaware corporation; (2) applying Delaware law, the action is barred by the three-year limitations period of title 10, section 8106 of the Delaware Code;[1] and (3) section 8117 did not toll the statutory period."

 

Here's an informative Los Angeles County Bar Association continuing legal education article on choice of law: 

http://www.lacba.org/showpage.cfm?pageid=3628

 

Good luck!

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We used this California case, too. Hambrecht & Quist Venture Partners v. American Med. Int'l, Inc., 38 Cal. 4th 1532, 46 CR2d 33, 38 C.A.4th 1532 (1995). 

http://scholar.google.com/scholar_case?case=4763613297294907471&q=Hambrecht+&hl=en&as_sdt=4,5,72,73,78,79,80,86,88,93,114,129,134,135,141,142,143,149,151,156,258,259,260,261,310,311,321,322,323,324,373,374,383

 

'In light of the broad meaning of "law" and of its interpretation by the courts and the Restatement to include the statutes of limitations, we find that the August agreement incorporated Delaware's statutes of limitations. We therefore decline plaintiffs' invitation to read the choice-of-law provision as if it incorporated only the substantive law of Delaware, i.e., excluded Delaware procedural law. Although statutes of limitations may be viewed as procedural rather than substantive in some contexts, the choice-of-law clause in this case does not make a distinction along those lines. It simply incorporates the "laws" of Delaware without using any adjectives or other qualifiers. Moreover, even if the clause could be read to exclude Delaware procedural law, it does not follow that the statutes of limitations would be excluded.[7] In any event, we will not read into the agreement's unqualified language a restriction that the parties could easily have inserted but failed to include.[8]'

 

The Supreme Court of California ruled in Nedlloyd:

http://scholar.google.com/scholar_case?case=13238880383390921182&q=Hambrecht+&hl=en&as_sdt=4,5,72,73,78,79,80,86,88,93,114,129,134,135,141,142,143,149,151,156,258,259,260,261,310,311,321,322,323,324,373,374,383

 

"Our conclusion rests on the choice-of-law rules derived from California decisions and the Restatement Second of Conflict of Laws, which reflect strong policy considerations favoring the enforcement of freely negotiated choice-of-law clauses."

 

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Thank you so much, everyone!  

 

Brotherskeeper, your posts were especially informative.  I'm not 100% sure if all essential elements were alleged to be in place while I was domiciled in CA (i.e. - I may have been residing in NY when the agreement was allegedly entered into 10 or more years ago).  But I have decided to definitely remain in CA until after the SOL expires (later this year).  Does anyone know if there is anything I should do legally to record being in CA after SOL has expired to make it official, or is SOL merely a retroactive defense if sued?

 

Thanks again!   

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To be honest, CA case law is not going to help you in NY.  If you were to be sued, you'd need NY case law.

 

Going by the plain reading of the NY statute, if the SOL is up when you leave CA, you shouldn't have to worry.   I'll see if I can find some case law.

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Why move to NY unless you have a great job offer and it's enough or more to pay the debts off? Maybe your out of work here and got a job there just to survive? Maybe its personal, but see if you can maintain residency in two states and keep the Cali one by setting up dual residency ? That's a legal question for a lawyer regarding your debt situation- I assume  on maintaining dual residency and collection court laws.

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According to the NY Court of Appeals, § 202 is based upon where the plaintiff resides.

 

When an alleged injury is purely economic, the place of injury usually is where the plaintiff resides and sustains the economic impact of the loss." Global Fin. Corp. v. Triarc Corp., 93 N.Y.2d 525, 529 (1999)..

 

In Portfolio Recovery v. King, the court applied the SOL of the governing state of the credit card agreement which was Delaware because that was the state where the OC was incorporated and where the cause of action (default) would have accrued.

 

If you have any credit cards for which the governing state's SOL is 6 years, an OC or JDB might be able to use that against you in NY, but I don't know for sure.  You might want to contact a NY lawyer to find out for sure.

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Thank you so much, everyone!  

 

Brotherskeeper, your posts were especially informative.  I'm not 100% sure if all essential elements were alleged to be in place while I was domiciled in CA (i.e. - I may have been residing in NY when the agreement was allegedly entered into 10 or more years ago).  But I have decided to definitely remain in CA until after the SOL expires (later this year).  Does anyone know if there is anything I should do legally to record being in CA after SOL has expired to make it official, or is SOL merely a retroactive defense if sued?

 

Thanks again!   

That a cause of action is time-barred due to the applicable statute of limitations is an affirmative defense. The burden of proof for an affirmative defense is on you. Tax returns, DMV licenses, utility bills, statements, voter registration, airline tix, etc. that show your domicile with dates may be asked for in discovery. IANAL, so verify on your own, but my understanding is you can have only one domicile.  http://thelawdictionary.org/domicile/  (Some people have vacation homes or business apartments used for long-distance commuters, or short-term residencies, but still maintain a permanent domicile.) Tolling provisions and what triggers them need to be understood very well. We made sure to allege availability at all times for service of process. 

 

In our first case, the JDB never challenged the California residency; they just argued that Michigan's 6-year SOL is procedural, and had no argument at all for the borrowing statute. The judge used our forum shopping case cites in his opinion. In the second case, they did challenge residency and demanded all kinds of proof for the dates. The judge accepted heavily redacted tax returns and a rental lease.

 

Once the applicable SOL is safely past, you can make the forum shopping argument as well, if later sued in NY. @BV80 has pointed you in right direction with NY law. 

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If you were residing in NY when the agreement was initiated, that makes it a bit more ambiguous as well.  It could be argued that NY SOL could be appropriate since that is where the agreement originated.

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