17-2704-cv
Ajdler v. Mendoza

                          UNITED STATES COURT OF APPEALS
                              FOR THE SECOND CIRCUIT

                                       SUMMARY ORDER

RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A
SUMMARY ORDER FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY
FEDERAL RULE OF APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN
CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE
EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE NOTATION
“SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL.

       At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 23rd day of May, two thousand nineteen.

PRESENT: ROSEMARY S. POOLER,
                 REENA RAGGI,
                 CHRISTOPHER F. DRONEY,
                                  Circuit Judges.
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MOSHE MARCEL AJDLER,
                                               Plaintiff-Appellant,
                               v.                                             No. 17-2704-cv

PROVINCE OF MENDOZA,
a Province of the Republic of Argentina,
                                              Defendant-Appellee.
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FOR APPELLANT:                                    DAVID S. HOFFNER, Hoffner PLLC, New York,
                                                  New York.

FOR APPELLEE:                                    CARMINE D. BOCCUZZI, Cleary Gottlieb Steen &
                                                 Hamilton LLP, New York, New York.

          Appeal from a final judgment of the United States District Court for the Southern

District of New York (Victor Marrero, Judge).

          UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that the judgment entered on August 2, 2017, is AFFIRMED.
       Plaintiff Moshe Marcel Ajdler, who sued defendant Province of Mendoza

(“Mendoza”) for failing to pay principal and interest on $7,050,000 worth of bonds issued

on September 4, 1997, appeals from a judgment dismissing his suit as untimely.            See

Ajdler v. Province of Mendoza, No. 17-cv-1530 (VM), 2017 WL 3635122 (S.D.N.Y. Aug.

2, 2017).   There is no dispute that, as to the principal, Ajdler’s claim is time-barred.

According to the complaint, Ajdler’s bonds matured on September 4, 2007, such that, when

Mendoza refused payment of principal at that time, Ajdler’s claim to principal began to

accrue. Ajdler, however, did not file this action until March 1, 2017, well outside the

relevant four-year limitations period for his claim to principal. See Ajdler v. Province of

Mendoza, 890 F.3d 95, 99–100 (2d Cir. 2018). Ajdler nevertheless maintains that, under

New York law, interest on unpaid principal continues to accrue even after the underlying

claim for the principal is time-barred.

       After briefing and argument, this court certified the accruing interest question to the

New York Court of Appeals. Id. at 105–06. In an opinion filed March 21, 2019, the

New York Court of Appeals made clear that once a claim on the bond principal is time-

barred “a claim to recover unpaid post-maturity interest payments is not legally

cognizable.” Ajdler v. Province of Mendoza, No. 18, 2019 WL 1282028, at *5 (N.Y. Mar.

21, 2019). In light of this controlling statement of New York law, we affirm the district

court’s judgment of dismissal.

       To be sure, the bond agreement here at issue obligated Mendoza to pay, in biannual

installments, 10% annual interest on the bonds until payment of the principal. According

to Ajdler, this interest obligation continues to become due each year, even after maturity,
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for so long as the principal remains unpaid. In support, he cites NML Capital v. Republic

of Argentina, 17 N.Y.3d 250, 928 N.Y.S.2d 666 (2011), which stated that, in the context

of the similar contractual language at issue in that case, a bond issuer’s obligation to pay

interest on unpaid principal continues “until the principal is actually repaid in full—and

not merely until the bond maturity date,” id. at 260, 928 N.Y.S.2d at 674. Thus, Ajdler

maintains that each year’s interest obligation, if not paid, provides the basis for an

independent claim, such that claims for interest obligations within four years of his March

1, 2017 filing are timely.1

       Mindful that NML Capital’s quoted statement was made in the context of a timely

claim for principal, we considered its application in the context of an untimely claim for

principal unsettled under New York law, and certified two questions to the New York Court

of Appeals:

       1. If a bond issuer remains obligated to make biannual interest payments until
       the principal is paid, including after the date of maturity, do enforceable
       claims for such biannual interest continue to accrue after a claim for the
       principal of the bonds is time-barred?

       2. If the answer to the first question is “yes,” can interest claims arise ad
       infinitum as long as the principal remains unpaid, or are there limiting
       principles that apply?

See Ajdler v. Mendoza, 890 F.3d at 105–06 (internal citations omitted).




1
  We previously rejected as “unsupported by either argument or authority” Ajdler’s
contention “that his interest claim is subject to a six-year statute of limitations rather than
the four-year period specified in the Indenture’s Prescription provision.” Ajdler v.
Province of Mendoza, 890 F.3d at 99–100.
                                               3
         Answering the first question in the affirmative, and thus finding no need to reach

the second question, the New York Court of Appeals held that “in the absence of a timely

action to recover principal, a bondholder cannot enforce the conditional obligation to make

post-maturity interest payments.” Ajdler v. Province of Mendoza, 2019 WL 1282028, at

*1. “Once a creditor can no longer establish a right to repayment of principal, there is no

basis or foundation upon which to allege a right to payment of post-maturity interest.” Id.

at *4.

         The decision of the New York Court of Appeals fully disposes of the claims on this

appeal. Consistent with now-settled New York law, we conclude that Ajdler’s claims to

principal and interest were correctly dismissed as untimely. The judgment of the district

court is therefore affirmed.

                                    FOR THE COURT:
                                    CATHERINE O’HAGAN WOLFE, Clerk of Court




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