Citibank

A New York bank and its California customer agreed that disputes arising out of their banking relationship would be resolved under New York law. The customer sued in California under New York law for causes of action arising in California after the bank refused to credit its account for payment on a check bearing a forged endorsement. Under New York law, a three-year statute of limitations governed the claims. However, New York’s “borrowing statute” required that each cause of action must be timely under both New York law and the law of the jurisdiction in which the claim arose. The customer’s claims, asserted more than two years after it learned of the forgery and of the bank’s allegedly wrongful payment of the check, were timely under the New York statute of limitations, but time-barred under California law. The trial court enforced the parties’ contractual choice of law provision, but refused to enforce the borrowing statute and precluded the bank from asserting a statute of limitations defense. The jury found infavor of and awarded damages to the customer. The bank appealed.

We hold that, where parties to a valid and enforceable contractual choice of law provision…