UNITED STATES DISTRICT COURT                           
               DISTRICT OF MINNESOTA                                 


ILKB of CNY, LLC, et al.,                                                 

          Plaintiffs,                                                


v.                            MEMORANDUM OF LAW & ORDER                   
                         Civil File No. 19-1064 (MJD/ECW)            


FRANCHOICE, INC. and                                                      
JEFF SHAFRITZ,                                                            

          Defendants.                                                

Elliot R. Ginsburg, Erin C. Johnsen, and W. Michael Garner, Garner Ginsburg & 
Johnsen, P.A., and Michael J. Adams and Robert B. Calihan, Calihan Law PLLC, 
Counsel for Plaintiffs.                                                   

Robin M. Wolpert, Ryan O. Vettleson, and Sonia L. Miller-Van Oort, Sapientia 
Law Group, Counsel for Defendants.                                        

The above-entitled matter comes before the Court upon the Report and 
Recommendation of the United States Magistrate Judge dated December 19,   
2019.  No objections have been filed.  When no objections are filed within the 
filing period, the Court reviews the Report and Recommendation for “clear 
error.”  Grinder v. Gammon, 

 (8th Cir. 1996).  Based upon the 
Court’s review of the files and records, the Court adopts in part and modifies in 
part the Report and Recommendation.  The Court adopts all of the Report and 

Recommendation with the exception of Section III(A)(5)(c), found at pages 21 
through 24 of the Report and Recommendation.  Section III(A)(5)(c) of the Report 
and Recommendation is replaced with the following:                        

      Section (III)(A)(5)(c): Commencement of the Present Action     
The parties also disagree as to the commencement date of Plaintiffs’ action. 

According to Defendants, Minnesota law applies, and therefore the action was 
not commenced for statute of limitations purposes until even after the April 20, 
2019 deadline for claims related to the April 20, 2016 agreement.  ([Docket No. 

16] at 11-12.)  Plaintiffs assert that New York law applies.  ([Docket No. 22] at 6-
7.)  As such, Plaintiffs argue that the commencement of the action occurred on 

April 18, 2019 upon the filing of Summons and Complaint with the Court, prior 
to the expiration of the statute of limitations.  (Id.)                   
“Although commencement of an action is a procedural question, the    

United States Supreme Court has held that state law governs when a suit is 
commenced in a diversity action.”  Enervations, Inc. v. Minnesota Mining & Mfg. 

Co., No. CIVA. 024923 (DWF/SRN), 

, at *3 (D. Minn. July 25, 
2003) (citing Walker v. Armco Steel Corp., 

, 751–53 (1980)), aff’d, 

 (8th Cir. 2004).  Under New York law, an action is commenced by filing 

a summons and complaint.  See 

(a).  Under Minnesota law, an 
action is commenced upon service of the summons and complaint.  See Minn. R. 
Civ. P. 3.01; see also Larsen v. Mayo Med. Ctr., 

 (8th Cir. 2000). 

As set forth above, because the substantive law of New York applies to the claim 
at issue, the Court applies the statute of limitations as set forth in the NYFSA.  

See 

(a)(1).                                           
In Walker v. Armco Steele Corp., the Supreme Court held that, in a   
diversity action brought under Oklahoma state law in federal court in Oklahoma, 

Oklahoma’s state statute providing that a civil action is not commenced until the 
summons is served on the defendant determined the date that lawsuit was   

commenced and the Oklahoma statute of limitations was tolled.  

.   Federal Rule of Civil Procedure 3, which stated that a civil action is 
commenced by filing the complaint, did not determine when tolling occurred.  

The Court explained that “[t]here is no indication that the [Federal] Rule was 
intended to toll a state statute of limitations, much less that it purported to 

displace state tolling rules for purposes of state statutes of limitations.”  

 at 
750–51 (footnote omitted).  “In contrast to Rule 3, the Oklahoma statute is a 
statement of a substantive decision by that State that actual service on, and 

accordingly actual notice by, the defendant is an integral part of the several 
policies served by the statute of limitations.”  

 (citation omitted).  Under 
Walker, “state commencement rules apply because they are ‘part and parcel of 

the statute of limitations.’”  Larsen v. Mayo Med. Ctr., 

 (8th Cir. 
2000) (quoting Walker, 

).  See also West v. Conrail, 

, 39 

n.4 (1987) (“Respect for the State’s substantive decision that actual service is a 
component of the policies underlying the statute of limitations requires that the 
service rule in a diversity suit ‘be considered part and parcel of the statute of 

limitations.’”) (quoting Walker, 

).                        
Here, New York substantive law and New York’s statute of limitations 

apply to Plaintiffs’ NYFSA claim.  It cannot be said that Minnesota’s civil 
procedure rule providing that an action is commenced upon service of the  
summons and complaint are “an integral part” or “part and parcel” of New  

York’s statute of limitations.  In fact, New York views its statute regarding 
commencement of an action through filing as integral to its statute of limitations 

and to determining tolling.  See, e.g., In re Joint E. & S. Dist. Asbestos Litig., No. 
CV-86-4286, 

, at *3 (E.D.N.Y. Sept. 1, 1988) (“New York rules 
defining the time when an action commences are an integral part of New York’s 

statutes of limitations.”) (addressing pre-1992 version of New York law   
regarding time when action commences) (citing Morse v. Elmira Country Club, 

 (2d Cir. 1984)).  The New York statute explicitly provides that, 

when computing New York statutes of limitations, “[t]he time within which an 
action must be commenced, except as otherwise expressly prescribed, shall be 

computed from the time the cause of action accrued to the time the claim is 
interposed;” and “[i]n an action which is commenced by filing, a claim asserted 
in the complaint is interposed against the defendant or a co-defendant united in 

interest with such defendant when the action is commenced.”  N.Y. C.P.L.R. 
203(a), (c).  “An action is commenced by filing a summons and complaint or 

summons with notice.”  N.Y. C.P.L.R. 304.  Thus, the fact that New York   
considers a lawsuit commenced upon filing is interwoven into the computation 
of its statute of limitations.  Although, before 1992, New York required service of 

a summons to commence an action, in 1992, New York made a policy decision to 
amend the statute and convert to a “commencement-by-filing system.”       

Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., No. 11 CIV. 1529 KMW, 

, at *4 (S.D.N.Y. Feb. 21, 2014) (citation omitted).  See also Cannellas ex rel. 
Estate of DiGiacomo v. Lentz, 

 (S.D.N.Y. 2005) (“[U]nder 

[New York law], plaintiff’s filing of the complaint . . . was sufficient to commence 
the original action and, under [New York law], such filing was also sufficient to 
interpose the claims asserted against the defendant and to toll the statute of 

limitations on those claims.”); Barad v. Comstock, No. 03 Civ. 0736, 

, at *2 n. 5 (W.D.N.Y. June 4, 2004) (“[S]ervice of process does not mark 

the commencement of a civil case under New York law.  Rather, plaintiff’s state 
court action [i]s commenced upon the filing of the summons and complaint.  
Service of process is a separate and follow-up procedure.”) (citations omitted).   

The Court concludes that, under Walker, New York, not Minnesota, law 
governs when the lawsuit was commenced with regard to Plaintiffs’ NYFSA   

claim.  See, e.g., Houraney v. Schley, No. 08-80837-CIV, 

, at *6 
(S.D. Fla. Sept. 4, 2009) (applying New York statute regarding commencement of 
lawsuit by filing summons and complaint in diversity case based on New York 

law brought in federal court in Florida), report and recommendation adopted, 
No. 08-80837-CIV, 

 (S.D. Fla. Sept. 17, 2009).            

Because Plaintiffs’ lawsuit was commenced on April 18, 2019, when the 
summons and complaint were filed, the Amended Complaint does not          
definitively establish that Plaintiffs’ NYFSA claim is barred by the statute of 

limitations, and Defendants’ motion to dismiss on that ground is denied.    
Accordingly, based upon the files, records, and proceedings herein, IT IS 
HEREBY ORDERED:                                                           

1.  The Court ADOPTS IN PART and MODIFIES IN PART the Report         
  and Recommendation of the United States Magistrate Judge dated     
  December 19, 2019 [Docket No. 51].                                 

2.  Defendants’ Motion for Partial Dismissal Pursuant to Rule        
  12(b)(6) [Docket No. 14] is GRANTED IN PART and DENIED             
  IN PART: Plaintiffs’ New York Franchise Sales Act claim is         
  DISMISSED WITH PREJUDICE as to the extent it is based on           
  the November 2015 Agreement and REMAINS to the extent it is        
  based on the April 20, 2016 Multi-Outlet Agreement, and Teresa     
  Ranieri’s Common Law Claims REMAIN.                                


Dated:   February 11, 2020    s/ Michael J. Davis                         
                         Michael J. Davis                            
                         United States District Court                

              UNITED STATES DISTRICT COURT                           
               DISTRICT OF MINNESOTA                                 


ILKB of CNY, LLC, et al.,                                                 

          Plaintiffs,                                                


v.                            MEMORANDUM OF LAW & ORDER                   
                         Civil File No. 19-1064 (MJD/ECW)            


FRANCHOICE, INC. and                                                      
JEFF SHAFRITZ,                                                            

          Defendants.                                                

Elliot R. Ginsburg, Erin C. Johnsen, and W. Michael Garner, Garner Ginsburg & 
Johnsen, P.A., and Michael J. Adams and Robert B. Calihan, Calihan Law PLLC, 
Counsel for Plaintiffs.                                                   

Robin M. Wolpert, Ryan O. Vettleson, and Sonia L. Miller-Van Oort, Sapientia 
Law Group, Counsel for Defendants.                                        

The above-entitled matter comes before the Court upon the Report and 
Recommendation of the United States Magistrate Judge dated December 19,   
2019.  No objections have been filed.  When no objections are filed within the 
filing period, the Court reviews the Report and Recommendation for “clear 
error.”  Grinder v. Gammon, 

 (8th Cir. 1996).  Based upon the 
Court’s review of the files and records, the Court adopts in part and modifies in 
part the Report and Recommendation.  The Court adopts all of the Report and 

Recommendation with the exception of Section III(A)(5)(c), found at pages 21 
through 24 of the Report and Recommendation.  Section III(A)(5)(c) of the Report 
and Recommendation is replaced with the following:                        

      Section (III)(A)(5)(c): Commencement of the Present Action     
The parties also disagree as to the commencement date of Plaintiffs’ action. 

According to Defendants, Minnesota law applies, and therefore the action was 
not commenced for statute of limitations purposes until even after the April 20, 
2019 deadline for claims related to the April 20, 2016 agreement.  ([Docket No. 

16] at 11-12.)  Plaintiffs assert that New York law applies.  ([Docket No. 22] at 6-
7.)  As such, Plaintiffs argue that the commencement of the action occurred on 

April 18, 2019 upon the filing of Summons and Complaint with the Court, prior 
to the expiration of the statute of limitations.  (Id.)                   
“Although commencement of an action is a procedural question, the    

United States Supreme Court has held that state law governs when a suit is 
commenced in a diversity action.”  Enervations, Inc. v. Minnesota Mining & Mfg. 

Co., No. CIVA. 024923 (DWF/SRN), 

, at *3 (D. Minn. July 25, 
2003) (citing Walker v. Armco Steel Corp., 

, 751–53 (1980)), aff’d, 

 (8th Cir. 2004).  Under New York law, an action is commenced by filing 

a summons and complaint.  See 

(a).  Under Minnesota law, an 
action is commenced upon service of the summons and complaint.  See Minn. R. 
Civ. P. 3.01; see also Larsen v. Mayo Med. Ctr., 

 (8th Cir. 2000). 

As set forth above, because the substantive law of New York applies to the claim 
at issue, the Court applies the statute of limitations as set forth in the NYFSA.  

See 

(a)(1).                                           
In Walker v. Armco Steele Corp., the Supreme Court held that, in a   
diversity action brought under Oklahoma state law in federal court in Oklahoma, 

Oklahoma’s state statute providing that a civil action is not commenced until the 
summons is served on the defendant determined the date that lawsuit was   

commenced and the Oklahoma statute of limitations was tolled.  

.   Federal Rule of Civil Procedure 3, which stated that a civil action is 
commenced by filing the complaint, did not determine when tolling occurred.  

The Court explained that “[t]here is no indication that the [Federal] Rule was 
intended to toll a state statute of limitations, much less that it purported to 

displace state tolling rules for purposes of state statutes of limitations.”  

 at 
750–51 (footnote omitted).  “In contrast to Rule 3, the Oklahoma statute is a 
statement of a substantive decision by that State that actual service on, and 

accordingly actual notice by, the defendant is an integral part of the several 
policies served by the statute of limitations.”  

 (citation omitted).  Under 
Walker, “state commencement rules apply because they are ‘part and parcel of 

the statute of limitations.’”  Larsen v. Mayo Med. Ctr., 

 (8th Cir. 
2000) (quoting Walker, 

).  See also West v. Conrail, 

, 39 

n.4 (1987) (“Respect for the State’s substantive decision that actual service is a 
component of the policies underlying the statute of limitations requires that the 
service rule in a diversity suit ‘be considered part and parcel of the statute of 

limitations.’”) (quoting Walker, 

).                        
Here, New York substantive law and New York’s statute of limitations 

apply to Plaintiffs’ NYFSA claim.  It cannot be said that Minnesota’s civil 
procedure rule providing that an action is commenced upon service of the  
summons and complaint are “an integral part” or “part and parcel” of New  

York’s statute of limitations.  In fact, New York views its statute regarding 
commencement of an action through filing as integral to its statute of limitations 

and to determining tolling.  See, e.g., In re Joint E. & S. Dist. Asbestos Litig., No. 
CV-86-4286, 

, at *3 (E.D.N.Y. Sept. 1, 1988) (“New York rules 
defining the time when an action commences are an integral part of New York’s 

statutes of limitations.”) (addressing pre-1992 version of New York law   
regarding time when action commences) (citing Morse v. Elmira Country Club, 

 (2d Cir. 1984)).  The New York statute explicitly provides that, 

when computing New York statutes of limitations, “[t]he time within which an 
action must be commenced, except as otherwise expressly prescribed, shall be 

computed from the time the cause of action accrued to the time the claim is 
interposed;” and “[i]n an action which is commenced by filing, a claim asserted 
in the complaint is interposed against the defendant or a co-defendant united in 

interest with such defendant when the action is commenced.”  N.Y. C.P.L.R. 
203(a), (c).  “An action is commenced by filing a summons and complaint or 

summons with notice.”  N.Y. C.P.L.R. 304.  Thus, the fact that New York   
considers a lawsuit commenced upon filing is interwoven into the computation 
of its statute of limitations.  Although, before 1992, New York required service of 

a summons to commence an action, in 1992, New York made a policy decision to 
amend the statute and convert to a “commencement-by-filing system.”       

Dorchester Fin. Sec., Inc. v. Banco BRJ, S.A., No. 11 CIV. 1529 KMW, 

, at *4 (S.D.N.Y. Feb. 21, 2014) (citation omitted).  See also Cannellas ex rel. 
Estate of DiGiacomo v. Lentz, 

 (S.D.N.Y. 2005) (“[U]nder 

[New York law], plaintiff’s filing of the complaint . . . was sufficient to commence 
the original action and, under [New York law], such filing was also sufficient to 
interpose the claims asserted against the defendant and to toll the statute of 

limitations on those claims.”); Barad v. Comstock, No. 03 Civ. 0736, 

, at *2 n. 5 (W.D.N.Y. June 4, 2004) (“[S]ervice of process does not mark 

the commencement of a civil case under New York law.  Rather, plaintiff’s state 
court action [i]s commenced upon the filing of the summons and complaint.  
Service of process is a separate and follow-up procedure.”) (citations omitted).   

The Court concludes that, under Walker, New York, not Minnesota, law 
governs when the lawsuit was commenced with regard to Plaintiffs’ NYFSA   

claim.  See, e.g., Houraney v. Schley, No. 08-80837-CIV, 

, at *6 
(S.D. Fla. Sept. 4, 2009) (applying New York statute regarding commencement of 
lawsuit by filing summons and complaint in diversity case based on New York 

law brought in federal court in Florida), report and recommendation adopted, 
No. 08-80837-CIV, 

 (S.D. Fla. Sept. 17, 2009).            

Because Plaintiffs’ lawsuit was commenced on April 18, 2019, when the 
summons and complaint were filed, the Amended Complaint does not          
definitively establish that Plaintiffs’ NYFSA claim is barred by the statute of 

limitations, and Defendants’ motion to dismiss on that ground is denied.    
Accordingly, based upon the files, records, and proceedings herein, IT IS 
HEREBY ORDERED:                                                           

1.  The Court ADOPTS IN PART and MODIFIES IN PART the Report         
  and Recommendation of the United States Magistrate Judge dated     
  December 19, 2019 [Docket No. 51].                                 

2.  Defendants’ Motion for Partial Dismissal Pursuant to Rule        
  12(b)(6) [Docket No. 14] is GRANTED IN PART and DENIED             
  IN PART: Plaintiffs’ New York Franchise Sales Act claim is         
  DISMISSED WITH PREJUDICE as to the extent it is based on           
  the November 2015 Agreement and REMAINS to the extent it is        
  based on the April 20, 2016 Multi-Outlet Agreement, and Teresa     
  Ranieri’s Common Law Claims REMAIN.                                


Dated:   February 11, 2020    s/ Michael J. Davis                         
                         Michael J. Davis                            
                         United States District Court