May 18th, 2016

FKB’s A. Michael Furman and Rachel Aghassi obtain dismissal of an action asserting legal malpractice in two bankruptcy petitions

FKB successfully obtained a pre-answer dismissal on a motion to dismiss from Justice Lucindo Suarez in Supreme Court, Bronx County.


In this matter, FKB’s client represented plaintiffs with respect to their handling of two Chapter 13 bankruptcies  which were filed in response to a pending foreclosure action.  Shortly after the bankruptcies were filed, they were dismissed in August 2012 for failure to file a confirmable Chapter 13 plan.  The bankruptcies were then closed by the court in 2013.  Here, Plaintiffs sought damages not only relating to the failed bankruptcies but also relating to the loss of the property in foreclosure.


FKB’s pre-answer motion to dismiss the 2015 Complaint pursuant to CPLR §3211 was based on the argument that the complaint was filed beyond the relevant three year statute of limitations for legal malpractice which FKB contended ran from the date the bankruptcy actions were dismissed, not the date in which the bankruptcy actions were closed by the court.


In addition to opposing FKB’s motion, Plaintiff cross moved to amend the complaint arguing that the statute runs from the date the bankruptcies were closed in 2013 and therefore the Complaint was not time-barred.  Plaintiffs also asserted that  the doctrine of continuous representation tolls the statute of limitations here because the plaintiffs expected FKB’s clients to appeal the bankruptcies and had communicated with FKB’s clients after dismissal of the bankruptcies.  In opposition, FKB pointed out that in order to apply the continuous representation doctrine, the parties must have a mutual understanding of the need for further representation with respect to the bankruptcies, which documentary evidence showed was not the case here.


In the Court’s decision, Justice Suarez agreed that this case is barred by the statute of limitations because the  representation ceased when the bankruptcy actions were dismissed, rather than when the bankruptcy actions were administratively closed the following year.  In doing so, the Court found that the Plaintiffs failed to demonstrate a mutual understanding of the need for further representation after dismissal and that Plaintiffs’ alleged communication with FKB’s clients after the bankruptcy dismissal was not sufficient to constitute a continuous relationship.


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