Extension of time to respond to discovery demands

Posted on February 20, 2023 by Richard Klass

C Castle Group Corp. v Herzfeld & Rubin, P.C., 211 AD3d 1006, 1007 [2d Dept 2022] serves as a good reminder to ask for an extension of time to respond to discovery demands, such as a notice to admit in that case, when appropriate. The court held:

CPLR 2004 provides: “Except where otherwise expressly prescribed by law, the court may extend the time fixed by any statute, rule or order for doing any act, upon such terms as may be just and upon good cause shown, whether the application for extension is made before or after the expiration of the time fixed.” “In exercising its discretion to grant an extension of time pursuant to CPLR 2004, a court may consider such factors as the length of the delay, the reason or excuse for the delay, and any prejudice to the opponent of the motion” (Ibrahim v. Nablus Sweets Corp., 161 A.D.3d 961, 963, 77 N.Y.S.3d 439 [internal quotation marks omitted]; see Tewari v. Tsoutsouras, 75 N.Y.2d 1, 11–12, 550 N.Y.S.2d 572, 549 N.E.2d 1143).

Similarly, to be relieved of the adverse impact of the conditional order, a party must demonstrate “(1) a reasonable excuse for the failure to produce the requested [discovery] and (2) the existence of a meritorious claim or defense” (Gibbs v. St. Barnabas Hosp., 16 N.Y.3d 74, 80, 917 N.Y.S.2d 68, 942 N.E.2d 277; see Fortino v. Wheels, Inc., 204 A.D.3d 756, 757–758, 166 N.Y.S.3d 660). “The determination of what constitutes a reasonable excuse lies within the Supreme Court’s discretion” (Burro v. Kang, 167 A.D.3d 694, 698, 90 N.Y.S.3d 298 [internal quotation marks omitted]). “The court has discretion to accept law office failure as a reasonable excuse (see CPLR 2005) where that claim is supported by a detailed and credible explanation of the default at issue” (Scholem v. Acadia Realty L.P., 144 A.D.3d 1012, 1013, 42 N.Y.S.3d 214).

Richard A. Klass, Esq.
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Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn, New York. He may be reached at (718) COURT●ST or RichKlass@courtstreetlaw.comcreate new email with any questions.

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Harm caused by professional negligence

Posted on February 2, 2023 by Richard Klass

In Betz v Blatt, 211 AD3d 1004 [2d Dept 2022], the court held:

Although an attorney representing the executor of an estate, generally, is not liable to the beneficiaries of the estate (see Kramer v. Belfi, 106 A.D.2d 615, 616, 482 N.Y.S.2d 898), as the attorney does not represent the estate itself (see Betz v. Blatt, 116 A.D.3d at 816, 984 N.Y.S.2d 378; Matter of Hof, 102 A.D.2d 591, 593, 478 N.Y.S.2d 39), when fraud, collusion, malicious acts, or other special circumstances exist, an attorney may be liable to those third parties, even though not in privity with them, for harm caused by professional negligence (see Davis v. Farrell Fritz, P.C., 201 A.D.3d 869, 871, 163 N.Y.S.3d 82; Betz v. Blatt, 160 A.D.3d at 698, 74 N.Y.S.3d 75).

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No single statute of limitations for causes of action alleging breach of fiduciary duty

Posted on January 20, 2023 by Richard Klass

In Jadidian v Goldstein, 210 AD3d 969, 969-70 [2d Dept 2022], the court affirmed the dismissal of a claim against an attorney based on the statute of limitations, holding:

Contrary to the plaintiffs’ contention, the Supreme Court properly granted that branch of the defendants’ motion which was to dismiss the cause of action alleging breach of fiduciary duty. There is no single statute of limitations for causes of action alleging breach of fiduciary duty (see IDT Corp. v Morgan Stanley Dean Witter & Co., 12 N.Y.3d 132, 139, 879 N.Y.S.2d 355, 907 N.E.2d 268; Matter of Hersh, 198 A.D.3d 766, 769, 156 N.Y.S.3d 243). “Where the relief sought is equitable in nature, the statute of limitations is six years, and where the relief sought is purely monetary, the statute of limitations is generally three years” (Matter of Hersh, 198 A.D.3d at 769, 156 N.Y.S.3d 243). However, “regardless of the relief sought, ‘where an allegation of fraud is essential to a breach of fiduciary duty claim, courts have applied a six-year statute of limitations under CPLR 213(8)’ ” (id., quoting IDT Corp. v Morgan Stanley Dean Witter & Co., 12 N.Y.3d at 139, 879 N.Y.S.2d 355, 907 N.E.2d 268; see McDonnell v. Bradley, 109 A.D.3d 592, 594, 970 N.Y.S.2d 612). A cause of action alleging breach of fiduciary duty “accrues at the time of the [alleged] breach, even though the injured party may not know of the existence of the wrong or injury” (Matter of Hersh, 198 A.D.3d at 769, 156 N.Y.S.3d 243 [internal quotation marks omitted]; see Sternberg v Continuum Health Partners, Inc., 186 A.D.3d 1554, 1557, 131 N.Y.S.3d 356).

Here, the cause of action alleging breach of fiduciary duty was subject to a three-year statute of limitations since the relief sought was monetary in nature and the complaint failed to allege all the requisite elements of fraud, including justifiable reliance (see Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 562, 883 N.Y.S.2d 147, 910 N.E.2d 976; IDT Corp. v Morgan Stanley Dean Witter & Co., 12 N.Y.3d at 140, 879 N.Y.S.2d 355, 907 N.E.2d 268; Oppedisano v. D’Agostino, 196 A.D.3d 497, 499, 151 N.Y.S.3d 150). As the plaintiffs maintain, the cause of action alleging breach of fiduciary duty began to run, at the latest, on January 11, 2016, when the defendants allegedly commenced the prior legal malpractice action “to cover up their … negligence.” Thus, since the plaintiffs did not commence the instant action until March 24, 2021, more than three years later, the cause of action alleging breach of fiduciary duty was time-barred.

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Dismissal of action on statute of limitations grounds

Posted on January 10, 2023 by Richard Klass

In Kreutzberg v Law Offices of John Riconda, P.C., 210 AD3d 884, 884-85 [2d Dept 2022], the court upheld the dismissal of the client’s action on statute of limitations grounds, holding:

On a motion to dismiss a cause of action pursuant to CPLR 3211 (a) (5) on the ground that it is barred by the statute of limitations, a defendant bears the initial burden of establishing, prima facie, that the time in which to sue has expired (see Van Der Velde v New York Prop. Underwriting Assn., 205 AD3d 970, 971 [2022]; Joseph v Fensterman, 204 AD3d 766, 769 [2022]; Tulino v Hiller, P.C., 202 AD3d 1132, 1134-1135 [2022]; Deutsche Bank Natl. Trust Co. v Blank, 189 AD3d 1678, 1679 [2020]). “If the defendant satisfies this burden, the burden shifts to the plaintiff to raise a question of fact as to whether the statute of limitations was tolled or otherwise inapplicable, or whether the plaintiff actually commenced the action within the applicable limitations period” (Deutsche Bank Natl. Trust Co. v Blank, 189 AD3d at 1679 [internal quotation marks omitted]).

The statute of limitations for a cause of action to recover damages for legal malpractice is three years (see CPLR 214 [6]; Tulino v Hiller, P.C., 202 AD3d at 1135), which accrues at the time the malpractice is committed, not when the client discovers it (see Shumsky v Eisenstein, 96 NY2d 164, 166 [2001]; Goodman v Weiss, Zarett, Brofman, Sonnenklar & Levy, P.C., 199 AD3d 659, 661 [2021]; Sclafani v Kahn, 169 AD3d 846, 848 [2019]).

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The court discussed the issue re “near privity” concerning the attorney/client relationship

Posted on December 19, 2022 by Richard Klass

In Curtis v Berutti, 77 Misc 3d 327 [Sup Ct 2022], the court discussed the issue re “near privity” concerning the attorney/client relationship.

In New York, absent fraud, collusion, malicious acts or other special circumstances, an attorney is not liable for professional negligence to third parties who are not in privity with the attorney; however, where the relationship is so close as to touch the bounds of privity, an action for legal malpractice may be maintained. Allianz Underwriters Ins. Co. v. Landmark Ins. Co., 13 A.D.3d 172, 787 N.Y.S.2d 15 (1st Dept. 2004).

“In order for a relationship to approach ‘near’ privity’s borders, for the purpose of maintaining a professional negligence claim, the professional must be aware that its services will be used for a specific purpose, the plaintiff must rely upon those services, and the professional must engage in some conduct evincing some understanding of the plaintiff’s reliance.” Allianz, 13 A.D.3d at 175, 787 N.Y.S.2d 15.

Although New York’s “near privity” exception is infrequently applied, sufficient “near privity” has been found under certain circumstances. See, e.g., Minsky v. Haber, 74 A.D.3d 763, 764, 903 N.Y.S.2d 441 (2d Dept. 2010) (near privity exception applied where attorneys represented daughter’s “personal interests” where she was deemed to be a “third-party beneficiary” of the attorney’s prior representation of her father); Baer v. Broder, 86 A.D.2d 881, 882, 447 N.Y.S.2d 538 (2d Dept. 1982) (near privity exception applied where widow, who, as executrix of her husband’s estate, hired attorney to prosecute a wrongful death action, was permitted to maintain an action against the attorney, in her individual capacity, for malpractice even though she had no privity of contract with the attorney in her individual capacity, since the widow and the attorney had a “face-to-face” relationship in the underlying wrongful death action and the widow was the “real party in interest” in the wrongful death action); Good Old Days Tavern, Inc. v. Zwirn, 259 A.D.2d 300, 300, 686 N.Y.S.2d 414 (1st Dept. 1999) (near privity exception applied where plaintiff, as president and sole shareholder of corporate client, was a foreseeable third-party beneficiary of the contract pursuant to which he retained the defendant/attorney to represent his corporation, which was tantamount to a relationship of contractual privity).

The precise question of whether an attorney who represents a guardian also represents the guardian’s ward (under a “near privity” exception or otherwise) has not been answered in New York. Other states, however, have answered the question in the affirmative. Such states have recognized that an exception to the privity requirement for legal malpractice liability must exist when a guardian hires an attorney specifically the benefit their ward. For example, in Illinois, courts have recognized that an attorney-client relationship extended from the attorney to the ward where the attorney, although hired by the ward’s guardian, was acting for the primary benefit or best interests of the ward. See Schwartz v. Cortelloni, 177 Ill. 2d 166, 174–75, 226 Ill.Dec. 416, 685 N.E.2d 871 (1997) (stating that the key factor to be considered is whether the attorney acted at the direction of or on behalf of the client for the benefit of the ward). Similarly, in Florida, it has been held that the attorney for guardian owes a duty to the ward where the ward is the intended third-party beneficiary of the attorney’s services. See Saadeh v. Connors, 166 So. 3d 959 (Fla. Dist. Ct. App. 2015) (reinstating the ward’s legal malpractice claim against the guardian’s attorney and noting that the relationship between the guardian and the ward is such that the ward must be considered to be the primary or intended beneficiary and cannot be considered an “incidental” beneficiary). Further, Arizona courts have held that when an attorney undertakes to represent the guardian of an incompetent ward, the attorney assumes a relationship not only with the guardian but also with the ward as the intended beneficiary, whose interests overshadow those of the guardian and, thus, an attorney cannot escape liability for wrongful conduct on the ground of lack of privity. See In re Guardianship of Sleeth, 226 Ariz. 171, 244 P.3d 1169 (Ct. App. 2010); see also Fickett v. Superior Court, 27 Ariz. App. 793, 558 P.2d 988 (1976).

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