It took 45 years for the wheels of justice to finally stop churning in a lawsuit against Citigroup Inc. A New York state appeals court in Manhattan on Thursday dismissed a 1966 lawsuit against the bank over an Okinawa, Japan, school construction project, which the plaintiff's lawyer had called the oldest pending lawsuit in the state.
Lance International Inc, a construction materials supplier that went bankrupt in 1965 and was formally dissolved in 1975, had accused Citigroup predecessor First National City Bank of failing to properly act as a collection agent for the project.
In February 2010, a New York court said Lance could pursue claims alleging breaches of contract and fiduciary duty in the course of "winding up its affairs." It also rejected a 2008 Citigroup motion to dismiss the case as "untimely," given that the bank knew as early as 1988 that Lance had dissolved.
But the appeals court panel said Lance had more than the "reasonable period" allowed under state law to wind up its affairs, and that its assignment around 1995 of its interest in the lawsuit shows that the winding up ended before 2008.
The five-justice panel also said that while delays in the case were "partially attributable" to Citigroup, some were Lance's fault.
"Ultimately it was plaintiff's duty to prosecute its case and it failed to do so," the court said, "Accordingly, summary judgement dismissing the complaint was warranted."
Citigroup spokeswoman Danielle Romero-Apsilos said the New York-based bank is pleased with the decision. Richard Roth, a lawyer for the plaintiff, had no immediate comment.
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