3.7.3.2.5 When borrowing statute is not applicable

New York’s borrowing statute does not apply when the plaintiff is a New York resident. For purposes of the borrowing statute, a court has found that the residency exception applies when a corporation is incorporated in New York or if its principal place of business is in New York.³¹²

When a borrowing statute has been enacted recently, questions arise as to whether the statute applies to credit agreements entered into before the statute’s effective date. Ohio’s highest court has ruled that the borrowing statute applies to credit agreements entered into before the borrowing statute’s effective date, as long as the creditor has some time to bring suit after the statute was enacted.³¹³ On the other hand, a Minnesota court refused to apply the borrowing statute to a cause of action accruing before the statute’s enactment in 2004.³¹⁴

One issue is what aspects of the statute of limitations from another state apply if a borrowing statute applies. In one case, a court refused to apply the borrowing statute to the time frame—which was shorter in the other state—for refiling a suit. The court instead applied its own time frame even though the borrowing statute would require it to use the other state’s statute of limitations.³¹⁵ And, of course, one state’s borrowing statute does not require application of the other state’s borrowing statute.³¹⁶