Statute of Limitations

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

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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.

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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…negligent in not objecting to the judgment debtor’s bankruptcy proceeding…

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In Basile v Law Offices of Neal Brickman, P.C., 2022 NY Slip Op 06079 [1st Dept Nov. 1, 2022], the court affirmed the denial of the law firm’s motion to dismiss, holding:

The legal malpractice claim may not be barred by the three-year statute of limitations (CPLR 214[6]). Plaintiff contends that the claim was tolled by the continuous representation doctrine based on alleged emails and telephone conversations about collecting on plaintiff’s money judgment against the judgment debtor following its entry in 2010, at which time the judgment debtor did not have sufficient assets to satisfy the judgment. Defendants, however, assert that there was no continuous representation because plaintiff had no communication with them concerning collecting on the unsatisfied judgment until August 2019, when the limitations period on the instant claim had expired. These factual contentions concerning whether defendant continued to represent plaintiff during the relevant time period so as to toll the limitations period give rise to factual issues that cannot be resolved in this pre-answer motion to dismiss (see Boesky v. Levine, 193 A.D.3d 403, 147 N.Y.S.3d 2 [1st Dept. 2021]; Johnson v. Law Off. of Kenneth B. Schwartz, 145 A.D.3d 608, 612, 46 N.Y.S.3d 1 [1st Dept. 2016]).

Furthermore, the complaint’s allegations are sufficient to state a cause of action for legal malpractice. Plaintiff alleges that defendants were negligent in not objecting to the judgment debtor’s bankruptcy proceeding in 2015, which resulted in a discharge order that barred plaintiff from collecting on his money judgment against her. Defendants argue that they did not breach their duty to plaintiff by not intervening in the bankruptcy proceeding because they did not receive notice of the proceeding. Defendants submit the bankruptcy petition, which, in naming plaintiff as a creditor, included an outdated address for defendants and omitted the name of defendants’ law firm or a suite number. These undisputed facts, however, are not sufficient to find as a matter of law that defendants did not breach their duty to plaintiff. Defendants relocated to their new office in September 2014 and the judgment debtor filed her bankruptcy petition in January 2015, three months later. The bankruptcy petition included the name of the attorney who had assisted in plaintiff’s underlying action against the judgment debtor. At the very least, a factual issue exists as to whether the notice of the bankruptcy proceeding to object on plaintiff’s behalf was forwarded to defendants, which cannot be resolved at this juncture. As to proximate cause, contrary to defendants’ contention, proof of the collectability on a judgment is not an essential element of the legal malpractice claim, and arises after the “case within the case” has been proven (Lindenman v. Kreitzer, 7 A.D.3d 30, 35, 775 N.Y.S.2d 4 [1st Dept. 2004]).

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.

Prior results do not guarantee a similar outcome.

© 2022 Richard A. Klass

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Scales of justice illustrating article about legal malpractice.

Plaintiffs failed to meet their shifted burden.

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In Colucci v Rzepka, 209 AD3d 1205, 1207-08 [3d Dept 2022], the court held:

“An action to recover damages arising from legal malpractice must be commenced within three years after accrual” (Zorn v. Gilbert, 8 N.Y.3d 933, 933–934, 834 N.Y.S.2d 702, 866 N.E.2d 1030 [2007] [citation omitted]; see CPLR 214[6]). In the civil context, the claim “accrues when the malpractice is committed” (Ruggiero v. Powers, 284 A.D.2d 593, 594, 725 N.Y.S.2d 759 [3d Dept. 2001], lv dismissed 97 N.Y.2d 638, 735 N.Y.S.2d 495, 760 N.E.2d 1291 [2001]), “not at the time that the injury is discovered” (Lavelle–Tomko v. Aswad & Ingraham, 191 A.D.3d 1142, 1143, 143 N.Y.S.3d 109 [3d Dept. 2021]; see McCoy v. Feinman, 99 N.Y.2d 295, 301, 755 N.Y.S.2d 693, 785 N.E.2d 714 [2002]). As the moving parties, the law firms bear the “the initial burden of demonstrating, prima facie, that the time within which to commence the action has expired” (Krog Corp. v. Vanner Group, Inc., 158 A.D.3d 914, 915, 72 N.Y.S.3d 178 [3d Dept. 2018] [internal quotation marks and citations omitted]; see Lavelle–Tomko v. Aswad & Ingraham, 191 A.D.3d at 1143–1144, 143 N.Y.S.3d 109). To that end, the law firms established that this action was brought after the three-year statute of limitations accrued inasmuch as Rzepka ceased representation of plaintiffs in December 2015 and this action was not commenced until May 2020. Thus, the burden shifted to plaintiffs “to raise a question of fact as to whether the statute of limitations has been tolled or was otherwise inapplicable, or whether the action was actually commenced within the period propounded by … defendant[s]” (State of N.Y. Workers’ Compensation Bd. v. Wang, 147 A.D.3d 104, 110, 46 N.Y.S.3d 230 [3d Dept. 2017] [internal quotation marks and citations omitted]; see Bank of Am., N.A. v. Gulnick, 170 A.D.3d 1365, 1367, 95 N.Y.S.3d 639 [3d Dept. 2019], lv denied 34 N.Y.3d 908, 2020 WL 728411 [2020]).

Plaintiffs failed to meet their shifted burden. Specifically, plaintiffs erroneously rely upon Grace v. Law, 24 N.Y.3d 203, 997 N.Y.S.2d 334, 21 N.E.3d 995 (2014) for the proposition that they were not permitted to commence this action until the appeal of the Stuyvesant Plaza action was resolved in January 2018. In Grace v. Law, the Court of Appeals held “that prior to commencing a legal malpractice action, a party who is likely to succeed on appeal of the underlying action should be required to press an appeal. However, if the client is not likely to succeed, [the client] may bring a legal malpractice action without first pursuing an appeal of the underlying action” (id. at 210, 997 N.Y.S.2d 334, 21 N.E.3d 995 [emphasis added]). Here, given Supreme Court’s “broad discretion in controlling discovery and disclosure” (Colucci v. Stuyvesant Plaza, Inc., 157 A.D.3d at 1098, 69 N.Y.S.3d 410 [internal quotation marks and citations omitted]), plaintiffs’ appeal from the Stuyvesant Plaza action was not “likely to succeed,” such that it was not necessary for them to file an appeal pursuant to the standard set forth in (Grace v. Law, 24 N.Y.3d at 210, 997 N.Y.S.2d 334, 21 N.E.3d 995; see Florists’ Mut. Ins. Co., Inc. v. Behman Hambelton, LLP, 160 A.D.3d 502, 502, 71 N.Y.S.3d 357 [1st Dept. 2018]). Thus, plaintiffs were not “forced” to file an appeal prior to commencing the legal malpractice action. If plaintiffs believed the best course of action was to also file an appeal, they were certainly free to, but this did not toll the statute of limitations. Rather, the preferable course of action would have been to both timely commence the legal malpractice action and pursue an appeal and then request a stay of the legal malpractice action until determination of the appeal (see Spitzer v. Newman, 163 A.D.3d 1026, 1027–1028, 82 N.Y.S.3d 595 [2d Dept. 2018]). Accordingly, Supreme Court did not err in granting the law firms’ motions to dismiss the complaint as untimely. In light of this determination, plaintiffs’ remaining contentions have been rendered academic.

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.

Prior results do not guarantee a similar outcome.

© 2022 Richard A. Klass

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Scales of justice illustrating article about legal malpractice.

Court reiterated the rule regarding the continuous representation doctrine.

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In Tulino v Hiller, P.C., 202 AD3d 1132, 1135 [2d Dept 2022], the court reiterated the rule regarding the continuous representation doctrine, holding:

The statute of limitations for a cause of action to recover damages for legal malpractice is three years (see CPLR 214[6]; DeStaso v. Condon Resnick, LLP, 90 A.D.3d 809, 812, 936 N.Y.S.2d 51), which accrues at the time the malpractice is committed (see Shumsky v. Eisenstein, 96 N.Y.2d 164, 166, 726 N.Y.S.2d 365, 750 N.E.2d 67; Stein Indus., Inc. v. Certilman Balin Adler & Hyman, LLP, 149 A.D.3d 788, 789, 51 N.Y.S.3d 183). “ ‘However, pursuant to the doctrine of continuous representation, the time within which to sue on the claim is tolled until the attorney’s continuing representation of the client with regard to the particular matter terminates’ ” (Stein Indus., Inc. v. Certilman Balin Adler & Hyman, LLP, 149 A.D.3d at 789, 51 N.Y.S.3d 183, quoting Aqua–Trol Corp. v. Wilentz, Goldman & Spitzer, P.A., 144 A.D.3d 956, 957, 42 N.Y.S.3d 56). “ ‘For the doctrine to apply, there must be clear indicia of an ongoing, continuous, developing, and dependent relationship between the client and the attorney’ ” (Tantleff v. Kestenbaum & Mark, 131 A.D.3d 955, 956, 15 N.Y.S.3d 840, quoting Beroza v. Sallah Law Firm, P.C., 126 A.D.3d 742, 743, 5 N.Y.S.3d 297).

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.

Prior results do not guarantee a similar outcome.

© 2022 Richard A. Klass

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Scales of justice illustrating article about legal malpractice.

Legal malpractice context…continuous representation doctrine…generally limited to…a specific legal matter…

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In Goodman v Weiss, Zarett, Brofman, Sonnenklar & Levy, P.C., 199 AD3d 659, 661-62 [2d Dept 2021], court affirmed the dismissal the client’s malpractice action as time-barred, holding:

The plaintiff contends that the defendant’s malpractice consisted of improperly negotiating his separation from his previous employer and his new employment contract with the hospitals. However, an action alleging legal malpractice must be commenced within three years from the date of accrual (see CPLR 214 [6]). A claim accrues when the malpractice is committed, not when the client discovers it (see Shumsky v Eisenstein, 96 NY2d 164, 166 [2001]). “Causes of action alleging legal malpractice which would otherwise be time-barred are timely if the doctrine of continuous representation applies” (DeStaso v Condon Resnick, LLP, 90 AD3d 809, 812 [2011]). “In the legal malpractice context, the continuous representation doctrine tolls the statute of limitations where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim” (id. at 812). Application of the continuous representation doctrine is generally “limited to the course of representation concerning a specific legal matter . . . ; [t]he concern, of course, is whether there has been continuous [representation], and not merely a continuing relation” between the client and the lawyer (Shumsky v Eisenstein, 96 NY2d at 168 [internal quotation marks omitted]).

Contrary to the plaintiff’s contention, the legal malpractice cause of action at issue was time-barred under CPLR 214 (6), and the continuous representation doctrine did not toll the statute of limitations. That doctrine “tolls the running of the statute of limitations on a cause of action against a professional defendant only so long as the defendant continues to represent the plaintiff[s] in connection with the particular transaction which is the subject of the action and not merely during the continuation of a general professional relationship” (Maurice W. Pomfrey & Assoc., Ltd. v Hancock & Estabrook, LLP, 50 AD3d 1531, 1533 [2008] [internal quotation marks omitted]). Although the plaintiff alleges that the defendant continued to provide legal services to him between January 2011 and November 2013, he did not seek or obtain the defendant’s legal services at any time during that period and, when the plaintiff did subsequently engage the defendant’s legal services, that engagement was with regard to the performance of distinct services related to a different subject matter. Accordingly, the Supreme Court properly determined that the continuous representation toll was inapplicable and granted that branch of the defendant’s motion which was to dismiss the legal malpractice cause of action as time-barred.

Richard A. Klass, Esq.
Your Court Street Lawyer

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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.

Prior results do not guarantee a similar outcome.

© 2022 Richard A. Klass

R. A. Klass
Your Court Street Lawyer

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Scales of justice illustrating article about legal malpractice.