“A” brings an action against “B”. The causes of action asserted against “B” are all timely for statute of limitations purposes. 

Following discovery, “A” learns that “C” played a material role in the facts and circumstances leading up to the claims asserted in the complaint. “A” wants to amend the complaint to include claims against “C”, who would be a new defendant. The claims that “A” plans to assert against “C” are, however, time barred.

Can “A” bring the untimely claims against “C”? Yes, if they relate back to the claims asserted in the original complaint against “B”. 

The foregoing is the basic fact pattern in Goldberg v. Torim, 2023 N.Y. Slip Op. 05097 (1st Dept. Oct. 10, 2023) (here).

What is The Relation-Back Doctrine?

Under the relation-back doctrine, new parties may be joined as defendants in a previously commenced action, after the statute of limitations has expired on the claims against them.¹ The doctrine is codified in of CPLR 203. The doctrine is “[a]imed at liberalizing the strict, formalistic pleading requirements of the [nineteenth] century, while at the same time respecting the important policies inherent in statutory repose.”² It “enables a plaintiff to correct a pleading error – by adding either a new claim or a new party – after the statutory limitations period has expired.”³ It is within court’s “sound judicial discretion to identify cases that justify relaxation of limitations strictures … to facilitate decisions on the merits if the correction will not cause undue prejudice to the plaintiff’s adversary.”⁴ 

The Court of Appeals has recognized that a more relaxed standard applies where a plaintiff seeks to use the relation-back doctrine by adding a new claim against a defendant who is already a party to litigation as opposed to adding a new defendant.⁵ Where a plaintiff proposes to add a new defendant, the Court of Appeals has adopted a three-part test for determining whether to apply relation back to an amended pleading that adds a new defendant.⁶ No such test applies where a plaintiff seeks the relation back of a new claim.⁷ In other words, where a proposed amended complaint contains an untimely claim against a defendant who is already a party to the litigation, the relevant considerations are simply (1) whether the original complaint gave the defendant notice of the transactions or occurrences at issue, and (2) whether there would be undue prejudice to the defendant if the amendment and relation back are permitted.⁸ 

Under the three-part test applicable to the addition of a new defendant, the plaintiff must show that (1) the claims against the new defendant arises from the same conduct, transaction, or occurrence as the claims against the original defendant, (2) the new defendant is “united in interest” with the original defendant, and will not suffer prejudice due to the lack of notice, and (3) the new defendant knew or should have known that, but for the plaintiff’s mistake, he/she would have been included as a defendant.⁹ 

The requirement of unity of interest is “more than a notice provision”.¹⁰ “The test is whether ‘the interest of the parties in the subject-matter is such that they stand or fall together and that judgment against one will similarly affect the other.’”¹¹ Unity of interest will not be found unless there is some relationship between the parties giving rise to the vicarious liability of one for the conduct of the other.¹² Also, unity of interest will not be found if there is a possibility that the new defendant may have a defense unavailable to the original defendant.¹³

Notably, a marital relationship is not, by itself, sufficient to find a unity in interest. Only “when the spouse is acting as [the other spouse’s] agent while committing the tort, or when the married person consents to, instigates, participates in, or coerces the spouse’s action” will there be a finding of unity in interest.¹⁴  

Goldberg v. Torim

Goldberg arose from a real estate transaction between close friends that went awry. In February 2017, defendant Shloime Torim (“Shloime”) allegedly called plaintiff and told him that he found a property selling for $500,000 that plaintiff should buy and later sell for a profit. According to plaintiff, defendant insisted that the property could be flipped within one year for a ten percent profit. 

In early August 2017, defendant called plaintiff to tell him that the property had sold for $700,000. Plaintiff alleged that defendant paid him only $525,000.00 from the sale, instead of the $700,000 that defendant represented the property had sold for. Plaintiff demanded the remaining $175,000. Defendant did not pay the amount demanded. 

Plaintiff brought suit against defendant, asserting causes of action for breach of fiduciary duty, conversion and fraud. Defendant moved to dismiss the complaint. By order dated January 3, 2019, the motion court dismissed the causes of action for breach of fiduciary duty and fraud but sustained the cause of action for conversion. Plaintiff appealed. The Appellate Division, First Department affirmed, finding the breach of fiduciary claim conclusory and the fraud claim unsupported by the facts alleged.¹⁵ 

Thereafter, plaintiff moved to amend the complaint to, among other things, bring defendant’s wife, Leah Torim (“Leah”), and son, Sholom Torim (“Sholom”) into the action. Plaintiff claimed that Leah was involved in the transactions that facilitated the sale of the disputed property, including executing certain documents, and created the purported profits that plaintiff claims were converted. The motion court held that those allegations were sufficient, for pleading purposes, to grant the motion to amend.

Leah moved to dismiss the conversion cause of action asserted against her on the ground that the statute of limitations had expired. Leah argued that, among other things, the did not relate back to the claim against Shloime and, therefore, it was time barred. With regard to the relation back doctrine, Leah maintained that her marriage to Shloime by itself was insufficient to find a unity in interest for purposes of the doctrine.

Plaintiff opposed the motion, arguing that the statute of limitations had not run. Plaintiff maintained that since the claim was based upon fraud, the statute of limitations was governed by the six-year limitation period applicable to fraud claims.¹⁶ Plaintiff also argued that the claim against Leah related back to the timely conversion claim asserted against Shloime and, therefore, the three-year statute of limitations had not run. Plaintiff maintained that there was unity in interest because Leah acted as Shloime’s agent while the tort was being committed and consented to and participated in Shloime’s fraudulent conduct.

The motion court denied the motion. The motion court found that the six-year limitation period applied even though the fraud claim had been dismissed. 

On appeal, the First Department affirmed on the basis of the relation-back doctrine.

In so holding, the Court explained that although Leah and Shloime “were not ‘united in interest’ solely because they are husband and wife,” they were nevertheless united in interest due to “an agency relationship between” them.¹⁷ Such a relationship, said the Court, was “sufficient to impose vicarious liability on defendant for codefendant’s acts, including but not limited to Leah having allegedly forged plaintiff’s signature on a deed as Shloime’s agent and transferring and selling the property in furtherance of the underlying conversion.”¹⁸

Footnotes

1. Higgins v. City of New York, 144 A.D.3d 511, 513 (1st Dept. 2016).
2. Buran v. Coupal, 87 N.Y.2d 173, 177 (1995).
3. Id.
4. Id. at 178 (internal quotation marks and citation omitted).
5. Id.; see also Duffy v. Horton Mem. Hosp., 66 N.Y.2d 473, 477 (1985).
6. Id.
7. Id.
8. Id.; CPLR 203(f); CPLR  3025(b); see also Caffaro v. Trayna, 35 N.Y.2d 245, 251 (1974).
9. Id.; see also Higgins, 144 A.D.3d at 513; Garcia v. New York-Presbyt. Hosp., 114 A.D.3d 615 (1st Dept. 2014).
10. Higgins, 144 A.D.3d at 513 (quoting Mongardi v. BJ’s Wholesale Club, Inc., 45 A.D.3d 1149, 1151 (3d Dept. 2007) (internal quotation marks omitted)).
11. Id. (quoting Vanderburg v. Brodman, 231 A.D.2d 146, 147-148 (1st Dept. 1997) (internal quotation marks omitted)).
12. Id. (citations omitted).
13. Id. (citations omitted).
14. See L&L Plumbing & Heating v. DePalo, 253 A.D.2d 517, 518 (2d Dept. 1998) (vicarious liability related back where husband and wife owned property together and husband acted as agent for wife).
15. Goldberg v. Torim, 181 A.D.3d 443 (1st Dept. 2020).
16. A cause of action for conversion is subject to a three-year limitation period. CPLR 214(3); Sporn v. MCA Records, 58 N.Y.2d 482,488-489 (1983). However, where the conversion claim is “based upon fraud” the cause of action is governed by the six-year limitations period for fraud. See, e.g., Monteleone v. Monteleone, 162 A.D.3d 761 (2d Dept. 2022).
17. Slip Op. at *1.
18. Id. (citations omitted).