Opinion
2014-05-15
ALLSTATE INSURANCE COMPANY, et al., Plaintiffs–Respondents, v. Morgan STANLEY, et al., Defendants–Appellants.
Davis Polk & Wardwell LLP, New York (James P. Rouhandeh of counsel), for appellants. Bernstein Litowitz Berger & Grossmann LLP, New York (Timothy A. DeLange of the bar of the State of California, admitted pro hac vice, and Rebecca E. Boon, of counsel), for respondents.
Davis Polk & Wardwell LLP, New York (James P. Rouhandeh of counsel), for appellants. Bernstein Litowitz Berger & Grossmann LLP, New York (Timothy A. DeLange of the bar of the State of California, admitted pro hac vice, and Rebecca E. Boon, of counsel), for respondents.
MAZZARELLI, J.P., ANDRIAS, DeGRASSE, MANZANET–DANIELS, FEINMAN, JJ.
Order, Supreme Court, New York County (Eileen Bransten, J.), entered March 15, 2013, which, to the extent appealed from as limited by the briefs, denied defendants' motion to dismiss the first, second and third causes of action, unanimously affirmed, with costs.
As the parties agree, the applicable statute of limitations for plaintiffs' claims is determined by the law of Illinois, where the claims arose (CPLR 202; Global Fin. Corp. v. Triarc Corp., 93 N.Y.2d 525, 693 N.Y.S.2d 479, 715 N.E.2d 482 [1999] ). While no Illinois court has ruled on the issue, we agree with the IAS court that the better reading of the tolling provisions of 815 ILCS 5/13(D) is that § (2) requires actual notice of facts to trigger a duty to inquire as to the existence of an alleged violation ( see Putnam Bank v. Countrywide Fin. Corp. [In re Countrywide Fin. Corp. Mortgage–Backed Sec. Litig.], 860 F.Supp.2d 1062, 1076 [C.D.Cal.2012] ). Applying this standard, it cannot be said as a matter of law that plaintiffs had actual knowledge sufficient to end the tolling of the limitations period, prior to 2008 (three years before the commencement of this action). Defendants' argument that the general collapse of the residential mortgage-backed securities market bars plaintiffs from proving loss causation is not ripe for determination at the pleading stage ( see MBIA Ins. Corp. v. Countrywide Home Loans, Inc., 87 A.D.3d 287, 296, 928 N.Y.S.2d 229 [1st Dept.2011] ).