FKB’s A. Michael Furman and Rachel Aghassi obtain dismissal of a legal malpractice claim as barred by the statute of limitations

10/10/2018

FKB successfully obtained CPLR § 3211 pre-answer dismissal in the Supreme Court, Kings County of a legal malpractice claim as barred by the statute of limitations.

In the underlying facts of this case, FKB’s clients represented the plaintiff in an action filed against him by his brother concerning the ownership interests in a closely-held family corporation.  After FKB’s clients convinced the brother to voluntarily discontinue his claims, the only remaining claims were the plaintiff’s counterclaims against his brother. During a certification conference on November 16, 2012, FKB’s client was directed to file the Note of Issue on the counterclaims within 90 days, which was February 14, 2013.  However, as a result of plaintiff’s continued failure to communicate with FKB’s clients or pay outstanding legal fees, FKB’s clients filed an Order to Show Cause (“OTSC”) to withdraw as counsel for plaintiff on December 27, 2012 which was denied on March 18, 2013.  In the interim, the Note of Issue was never filed on the counterclaims.  FKB’s clients filed a subsequent OTSC seeking leave to reargue and renew their motion to withdraw as counsel.  On June 24, 2013, the court finally granted the motion to reargue and withdraw as counsel. Plaintiff did not retain new counsel and the Note of Issue on the counterclaims was never filed, which were dismissed over a year later.

This legal malpractice action was filed on February 26, 2016 and asserted causes of action for legal malpractice and breach of contract based on FKB’s clients’ failure to file the Note of Issue on the counterclaims which plaintiff asserts caused the counterclaims’ dismissal.  The Complaint also asserts claims for fraud and violation of Judiciary Law § 487 based on FKB’s clients’ alleged misrepresentation in the OTSC regarding their unpaid legal fees.

FKB filed a pre-answer motion to dismiss under CPLR § 3211 arguing that  this action is barred by New York’s three (3) year statute of limitations for legal malpractice and for dismissal based upon lack of personal jurisdiction.  In New York, a plaintiff’s cause of action for legal malpractice accrues at the time the alleged malpractice occurs, not from when the malpractice is discovered.  Because the complaint asserts that the date of the alleged malpractice was February 14, 2013, the due date for the Note of Issue pursuant to the certification conference order, the limitations period expired on February 14, 2016.  Therefore, FKB argued, that this action commenced on February 26, 2016 is time-barred. While a legal malpractice claim can be tolled by the doctrine of continuous representation, FKB pointed out that the continuous representation doctrine did not apply here because the parties did not have  “a ‘mutual understanding’ that further representation is needed with respect to the matter underlying the malpractice claim,” which is required to apply the doctrine.  Zorn v. Gilbert, 8 N.Y.3d 933, 934 (2007).  FKB argued that the remaining claims must be dismissed as duplicative to the legal malpractice claim.

Finally, FKB pointed out that the court lacks personal jurisdiction over FKB’s client because plaintiff failed to timely serve them with the pleadings under CPLR § 308(2), the “substituted service” statute, and under CPLR § 306-b, which requires service of the pleadings within one hundred twenty days after the commencement of the action or proceeding.

In opposition, plaintiff argued that the statute of limitations is tolled by the doctrine of continuous representation since FKB’s clients were not formally withdrawn as counsel until June 24, 2013, which would make the statutory expiration date of the claims June 24, 2016 instead of February 14, 2016.  Plaintiff further argued that the doctrine applies because plaintiff and FKB’s clients had a meeting during which the parties contemplated continuing the representation after the first OTSC was denied. In response, FKB pointed out that the parties did not come to a “mutual understanding” during the meeting and were unable to resolve their differences.

On September 12, 2018, Justice Kathy King dismissed this case in its entirety under CPLR § 3211(5) (statute of limitations), as well as partially under CPLR §§ 3211(7) (failure to state a claim) and (8) (personal jurisdiction).  In the decision, the Court agreed with FKB’s position that the legal malpractice cause of action accrued on February 14, 2013, the date on which the note of issue on the underlying case was due under the certification conference order.  Therefore, this action, which commenced on February 26, 2016, is untimely under the three (3) year statute of limitations for legal malpractice.  The Court rejected plaintiff’s argument that the doctrine of continuous representation tolls the statute of limitations finding “there is no indication after [FKB’s clients] first moved to withdraw as counsel that [FKB’s clients] performed any substantive legal work on behalf of plaintiff giving rise to an ongoing, continuous, developing, and dependent relationship between defendants’ [sic] and plaintiff” which is required to apply the doctrine.

The Court further agreed that the claims for breach of contract, fraud, and violation of Judiciary Law § 487 are duplicative of the legal malpractice claim in that they do not allege distinct damages. Finally, the Court agreed that it lacked personal jurisdiction under CPLR § 308(2) because plaintiff failed to file the affidavits of service with the court within 20 days of service of the complaint.

If you have any questions about this decision, or the defense of attorneys in general, please contact A. Michael Furman or Rachel Aghassi.

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