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LIMAN v. INDIA SUPPLY MISSION

March 15, 1974

Arthur L. LIMAN, as Trustee in Bankruptcy of A. H. Bull Steamship Co., Plaintiff,
v.
INDIA SUPPLY MISSION, Defendant


Lasker, District Judge.


The opinion of the court was delivered by: LASKER

MEMORANDUM

LASKER, District Judge.

 This is an action to recover a general average contribution resulting from damage to plaintiff's bankrupt's ship, the S.S. BEATRICE. The damage was sustained when the ship struck a bridge abutment in the St. Lawrence Seaway on October 22, 1962, while carrying cargo belonging to defendant from Chicago to Bombay, India. The ship completed her voyage in the early part of 1963.

 To obtain release of its cargo on the BEATRICE's arrival in Bombay, defendant, by letter of November 6, 1962, to the general average adjuster, undertook to pay its general average contribution. (Haight affidavit, exhibit 1.)

 The statement of general average was issued on February 12, 1969, and this suit was instituted in May, 1972.

 Defendant moves to dismiss on the ground that the action is barred by laches or by the statute of limitations. It contends that the analogous period of limitation, derived from CPLR § 213, McKinney's Consol.Laws c. 8, is six years and began to run in early 1963, when the ship arrived at its destination, and, accordingly, that the suit was brought more than three years after the statute had run. Plaintiff opposes the motion on three grounds: 1) The applicable analogous statute of limitations is not that of New York, but either that of England or India and, since defendant has introduced no proof as to the law of either, the motion should be denied; 2) the period began to run not when the ship arrived at its destination in early 1963, but when the general average statement was issued in February, 1969, and, accordingly, the suit is not barred even under the New York statute; and 3) even if the analogous period of limitation has run, the doctrine of laches does not require dismissal, unless there has been a showing of prejudice.

 Since the action derives from maritime law, the analogous statute of limitations is not determinative of the issue at hand, although it is relevant to the question of laches. Gardner v. Panama R.R. Co., 342 U.S. 29, 72 S. Ct. 12, 96 L. Ed. 31 (1951); Larios v. Victory Carriers, Inc., 316 F.2d 63 (2d Cir. 1963). Defendant is correct that the analogous statute derives from the law of the forum state. Bournias v. Atlantic Maritime Co., 220 F.2d 152 (2d Cir. 1955); Argyll Shipping Co. v. Hanover Insurance Co., 297 F. Supp. 125 (S.D.N.Y.1968). Accordingly, the law of New York, including its "borrowing statute", CPLR § 202, is applicable. Since the cause of action accrued in India, CPLR § 202 would apply the shorter of the applicable statutes of limitations of India and New York. Accordingly, since defendant claims that the suit is barred under the New York statute, the law of India is irrelevant.

 The applicable New York statute, CPLR § 213, provides for a six year limitation period. Plaintiff's contention that the statute began to run when the general average statement was issued is erroneous. In United States v. Atlantic Mutual Co., 298 U.S. 483, 56 S. Ct. 889, 80 L. Ed. 1296 (1936), the Court held that the right to a general average contribution accrues and becomes enforceable when the ship arrives at its port of destination and the cargo is delivered. An undertaking to make a general average contribution does not extend the limitation period (Argyll shipping, supra), nor does the issuance of a general average statement (Atlantic Mutual, supra). Accordingly, the suit would be barred under the applicable statute of limitations.

 Defendant contends that the fact that the analogous statute has run creates a presumption of prejudice requiring dismissal unless plaintiff establishes the absence of prejudice. This, however, is not the law. As the Supreme Court stated in Gardner, supra :

 
"Though the existence of laches is a question primarily addressed to the discretion of the trial court, the matter should not be determined merely by a reference to and a mechanical application of the statute of limitations. The equities of the parties must be considered as well. Where there has been no inexcusable delay in seeking a remedy and where no prejudice to the defendant has ensued from the mere passage of time, there should be no bar to relief." 342 U.S. at 30-31, 72 S. Ct. at 13.

 Accordingly, the expiration of the analogous statute of limitations does not automatically entitle defendant to dismissal absent a demonstration by plaintiff of lack of prejudice. However, the rule stated in Gardner does not bar dismissal in all cases, but merely requires a weighing of the equities rather than blind reliance on the statute. Impliedly, the passage quoted above permits dismissal where there has been "inexcusable delay."

 Discussing Gardner, the Court of Appeals for this Circuit stated in Larios v. Victory Carriers, Inc., 316 F.2d 63, 67 (2d Cir. 1963):

 
"Even on this approach there may be cases where the plaintiff's evidence as to excuse for the delay is so insubstantial that the court need not call on the defendant ...

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