For Whom The Statute Tolls? A California Court Refuses Equitable Tolling For RMBS Claims

A recent decision dismissing an RMBS lawsuit in the Los Angeles County Superior Court highlights the critical importance of filing your claims in the correct court whenever there is a jurisdictional issue. By rejecting the plaintiff's equitable tolling arguments and applying the appropriate statutory limitations periods, the decision is notable because it arguably conflicts with similar decisions by other state courts involving similar RMBS claims. We have previously written about the application of statutes of limitations to RMBS claims, which may be viewed here.

Massachusetts Mutual Life Insurance Company, an insurance company that allegedly purchased over $300,000,000 worth of RMBS issued by various Countrywide entities, filed a complaint in Massachusetts federal court for violations of Massachusetts securities laws, against four former Countrywide officers that had no ties to Massachusetts. That case was then transferred to the multi-district litigation proceeding in California federal court where dozens of Countrywide RMBS-related cases are currently being overseen. The MDL court then subsequently granted the former Countrywide executives' motions to dismiss for lack of personal jurisdiction in Massachusetts. Mass Mutual then attempted to refile its claims against the former Countrywide executives, this time in California Superior Court in April 2012. (Mass. Mutual Life Ins. Co., v. Mozilo, et. al., No. BC482950) However, the "misguided decision" to initiate the suit in Massachusetts resulted in plaintiff's claims being dismissed on timeliness grounds on March 10, 2014. Superior Court Judge Amy D. Hogue, sitting in the Los Angeles County Superior Court's complex civil department by temporary assignment, held that plaintiff had filed its California complaint too late and had no valid reason for doing so. A copy of the ruling may be viewed here. Notably, the court explained that a plaintiff is not entitled to invoke California's equitable tolling doctrine for the time its claims are pending in a court that does not have jurisdiction to hear them. Judge Hogue rejected several tolling arguments that plaintiff hoped would save its untimely RMBS misrepresentation claims asserted against the four former Countrywide executives, reaching a different conclusion than some other courts that have stated that equitable tolling should be...