Preserving Statute of Limitations Defense to Legal Malpractice Claim
Andrew S. Kowlowitz
New York Law Journal
February 19, 2013

One of the “cleaner,” more effective defenses to a claim of legal malpractice is premised on the expiration of the statute of limitations. Typically, a legal malpractice claim must be brought within three years of the accrual of such a claim (i.e., the date of the error or omission). The courts have strictly held that claims brought outside this time-frame are subject to dismissal. However, an exception is made, and the statute of limitations may be tolled pursuant to the “continuous representation” doctrine, when an attorney continues to provide legal services to a client after the commission of an alleged error.

Whether a relationship is considered “continuous” for purposes of invoking the “continuous representation” doctrine, may at times appear subjective and often presents a “close call” for the courts to consider. Savvy practitioners may maximize the chances of preserving a statute of limitations defense through defensive-minded risk management practices.

Accrual of a Claim

Pursuant to Civil Practice Law and Rules (CPLR) §214(6), a claim for legal malpractice must be commenced within three years of the date of injury on the part of the client. The New York courts have consistently held that an action to recover damages for legal malpractice accrues on the date that the alleged malpractice is committed and not the date in which the malpractice is first discovered.¹

By way of a simple example, suppose Attorney Smith represents Client Bob in connection with a claim for personal injuries against Tortfeasor Larry. Suppose further that Attorney Smith fails to file Client Bob’s lawsuit in a timely manner, and as a result, Client Bob loses the right to pursue a claim against Tortfeasor Larry. In this example, Client Bob’s claim for legal malpractice against Attorney Smith accrued on the date in which Client Bob’s personal injury claim against Tortfeasor Larry expired, as this is the date of Attorney Smith’s error. Let’s suppose further that Client Bob was initially unaware that his personal injury claim against Tortfeasor Larry expired, and later learned of this unfortunate fact four years later. Nevertheless, Client Bob’s belated discovery of Attorney Smith’s error does not change the accrual date of the claim for legal malpractice.

‘Continuous Representation’

While a claim for legal malpractice accrues on the date of the act of malpractice, the statute of limitations in a legal malpractice action may be “tolled” in certain circumstances when there is “continuous representation” of the client for the same matter by the attorney. Under the continuous representation doctrine, a legal malpractice action is tolled until the attorney’s ongoing representation of the plaintiff in connection with the particular matter in question is completed.

In order for a client to invoke the continuous representation doctrine, a legal malpractice plaintiff must demonstrate a “clear indicia of an ongoing, developing and dependent relationship between the client and the attorney” or of “a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim.”² The courts have held that an ongoing general relationship between an attorney and a client otherwise will not provide a basis for a client to invoke the continuous representation doctrine.³

The continuous representation doctrine does not apply where the attorney-client relationship has been “irretrievably broken” or it is evident that the client no longer continues to repose trust and confidence in her attorney.⁴

The disruption of the attorney-client relationship may manifest itself in one of many ways – for example, such as a client consulting with independent outside counsel, or a client vocalizing an obvious distrust of her attorney.⁵ Further, an attorney’s continued involvement with a client even after such a disruption frequently presents a “close call” when the courts are asked to consider the application of the “continuous representation” doctrine to a claim of legal malpractice.⁶

Clear Continuing Representation. In the example set forth earlier, suppose Attorney Smith belatedly files the personal injury action on behalf of Client Bob against Tortfeasor Larry. Suppose further that Larry’s attorney responds by filing a motion to dismiss the complaint on grounds that the action is time-barred, and prevails. Now, suppose that Attorney Smith then pursues an appeal of this decision, and ultimately the appellate court affirms the dismissal of Client Bob’s personal injury action. In this instance, while the claim for legal malpractice may have originally accrued when Attorney Smith failed to timely commence the personal injury action against Tortfeasor Larry, the statute of limitations for Client Bob’s legal malpractice action was tolled pursuant to the “continuous representation” doctrine while Attorney Smith continued to provide Client Bob with legal services pertaining to his personal injury case (i.e., through appeal).

The ‘Clear Break.’ If the hypothetical were changed, and after realizing the statute of limitations expired for Client Bob’s personal injury claim, Attorney Smith returned her file to Client Bob and advised him she no longer intended to provide him with legal services in connection with the personal injury case. Suppose further that simultaneously, Attorney Smith is also representing Client Bob in connection with the sale of his home. In this example, Attorney Smith’s ongoing representation of Client Bob in connection with a real estate transaction would not serve as a basis for Client Bob to invoke the continuous representation doctrine as it relates to the accrual of the legal malpractice claim. Again, the courts have held that in order to effectively invoke the continuous representation doctrine, the ongoing legal services must relate to the same matter for which the claim of legal malpractice arises.

‘Grey Territory.’ The application of the continuous representation doctrine becomes less clear when it is not apparent if the attorney continued to provide legal services to her client after committing an error, and/or it is sufficiently unclear whether the client continued to repose trust and confidence in his lawyer following the commission of an error.

Suppose, for example, that Attorney Smith inadvertently permits the statute of limitations to expire on Client Bob’s claim for personal injury against Tortfeasor Larry and takes no action to put the claim in suit. Suppose further that at some point thereafter, Attorney Smith engages in sporadic telephone conversations with Client Bob concerning the personal injury claim, yet fails to take any further action to pursue the claim. This hypothetical obviously presents a “closer call” for the courts to consider. When determining if the sporadic telephone calls provide a basis for Client Bob to invoke the continuous representation doctrine, the court may consider the content of the discussions, and the frequency of the calls.

If for example, Attorney Smith advised Client Bob during the phone calls that she intends to contact Tortfeasor Larry’s insurer and facilitate settlement negotiations, the court in that case would likely avail Client Bob the benefit of the “continuous representation” doctrine to toll the statute of limitations on a legal malpractice action. Client Bob would likely be able to make a compelling argument that he believed that the attorney-client relationship with respect to his personal injury action was ongoing, and that he continued to repose trust and confidence in Attorney Smith.

Conversely, if the telephone calls were infrequent and Attorney Smith simply advised during the course of the calls that the personal injury claim was not put into suit and that Client Bob was free to retrieve his file at any point, a court in this case may find the “continuous representation” doctrine inapplicable. Again, the operative inquiry concerns whether there is proof of an ongoing, continuous, developing and dependent relationship.

Needless to say, when there is a lack of supporting documentation concerning the nature of the continuing relationship, the parties’ recollection and credibility often become the decisive factor.

Practical Applications

In terms of defending a claim of legal malpractice, a statute of limitations defense is one of the more effective tools, as it often provides a basis to pursue dispositive motion practice on a pre-answer basis. When a claim for legal malpractice is outside the limitations period, a pre-answer motion to dismiss pursuant to CPLR 3211(a)(5) may be filed in lieu of an answer and prior to discovery. This is beneficial since the court likely will not be asked to consider the merits of the allegations of legal malpractice, as the only issue of relevance concerns whether the claim was filed within the limitations period. Also, successful dispositive motion practice on a pre-discovery basis naturally results in a savings of time and costs. Discovery in a legal malpractice action is often time-consuming and expensive, as the underlying matter (the proverbial “case within a case”) must be litigated, along with the substantive allegations of attorney malfeasance.

Therefore, documenting a “clear break” in the attorney-client relationship is often the key to preserving a statute of limitations defense and preventing a factually sensitive inquiry by the court- which invariably will turn on witness testimony and credibility.

Effective termination of the attorney-client relationship should include filing a substitution of attorney stipulation, or stipulation of withdrawal with the court if the matter at issue involves pending litigation. An attorney should also issue a final invoice promptly. The final invoice should conspicuously state that the invoice is “final” (either on the face of the invoice or the accompanying cover letter).

Further, a disengagement letter should promptly be sent to the client explaining that the attorney no longer represents the client in the particular matter, and that the attorney no longer intends to take any further action in respect of the matter. To the extent the representation is incomplete and there are upcoming deadlines, any such deadlines should be clearly stated in the disengagement letter, and the client should be urged to consult other counsel to avoid missing such deadlines. The disengagement letter may also be used as a marketing tool to advertise other legal services the firm provides.

By way of an example, suppose Lawyer Smith represents Client Sally in connection with the sale of her home. At the conclusion of the transaction, Lawyer Smith may write Client Sally to advise her that since the transaction is complete, the firm intends to close its file. Lawyer Smith may also wish to advise Client Sally that her firm also performs matrimonial work, estate planning and provides litigation services, and that Lawyer Smith would be delighted to work with Client Sally again in the future should the need arise. In this case, it is a “win-win” situation – the attorney clearly documents the termination of the attorney-client relationship without appearing defensive, and also obtains the benefit of marketing the firm’s other services.

Savvy, defense-minded practitioners are urged to utilize effective disengagement techniques, including with long-standing clients. From a risk management standpoint, clearly documenting the start and conclusion of an attorney-client relationship may often be the key to mounting an effective defense to a claim of legal malpractice should the unfortunate circumstance arise.

Andrew S. Kowlowitz is a partner at Furman Kornfeld & Brennan. He can be reached at .
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Endnotes:

1. See e.g., Shumsky v. Eisenstein, 96 N.Y.2d 164, 726 N.Y.S.2d 365 (2001); Byron Chemical v. Groman, 61 A.D.3d 909, 877 N.Y.S.2d 457 (2d Dept. 2009).
2. See Hadda v. Lissner & Lissner, 99 A.D.3d 476, 477, 952 N.Y.S.2d 126 (1st Dept. 2012) citing In re Estate of Merker, 18 A.D.3d 332, 332-333, 795 N.Y.S.2d 215 (1st Dept. 2005).
3. See e.g., Deep v. Boies, 53 A.D.3d 948, 863 N.Y.S.2d 269 (3d Dept. 2008).
4. See e.g., Fleyshman v. Suckle & Schlesinger, 91 A.D.3d 591, 937 N.Y.S.2d 92 (2d Dept. 2012); Pandozy v. Robert J. Gumenick P.C., 2008 WL 2190151 (S.D.N.Y. 2008).
5. See Pandozy, supra.
6. See e.g., Hadda, supra (holding that “intermittent telephone contact” was insufficient to invoke continuous representation); Eric Perkins v. American Transit Insurance, 2013 WL 174426 at *12 (Jan. 15, 2013 S.D.N.Y.) (holding that an attorney who makes himself available to answer “lay of the land questions” from successor counsel is insufficient to invoke continuous representation).