World wide investor signs contracts for a number of Trump condos, and then loses it all. How could this happen? The answer is that 10 years went by while the pre-case issues simmered. In the end, none of the attorneys will be held responsible.
Soloway v Kane Kessler, PC 2017 NY Slip Op 50992(U) Decided on August 7, 2017 Supreme Court, New York County Bluth, J. gives the details:
“This case is about a series of failed real estate transactions involving the purchase of pre-construction residential and hotel condominium units in Trump International Hotel & Tower in Toronto, Canada. Plaintiff was the buyer and Talon International, Inc. (‘Talon”) was the seller. Plaintiff entered into five separate agreements to purchase units from July 2004 to May 2006 and made down payments totaling about $1.2 million. These transactions were never finalized.
Kane represented plaintiff in connection with numerous real estate transactions in Toronto, Chicago, Las Vegas and New York City. This case focuses on only the five transactions in Toronto and Kane’s role as the notice party for three (the three hotel units) of the five transactions— this meant that Kane, as the attorney for plaintiff (buyer), was designated in the contracts to receive written notices from Talon (seller), which included notices about the closing date. Plaintiff’s attorney at Kane was defendant Erwin Lontok. Mr. Lontok worked for Kane until he resigned in June 2006 and moved to Sonn & Associates, P.C., where he worked until the end of 2009. Mr. Lontok then worked at Lontok Chance LLP until April 2013 when he left to form Ebert Lontok LLC with Steven Ebert in April 2013. Mr. Lontok represented plaintiff throughout his employment at these various entities.
On October 11, 2006, a few months after Mr. Lontok left Kane, plaintiff fired Kane and requested that he be forwarded his files immediately. At the time of the termination, the real estate transactions in Toronto were still pending and awaiting closings. Kane insists that six months after Kane was terminated, plaintiff executed an amendment to the purchase agreements regarding the closing dates for the units. Kane contends that it did not represent plaintiff for those amendments. In October 2012, years after plaintiff fired Kane and several months after plaintiff executed amendments to the sales contracts, Talon’s counsel faxed three letters to Kane which identified a new closing date for the three units. While Kane argues that the seller’s attorneys, Harris Schaeffer, LLP, failed to use the fax number listed in the purchase agreement (which Kane says was plaintiff’s fax number), Kane did not ignore the fax. Defendant Berger, a Kane attorney, contends that despite never having any previous contact with plaintiff he called plaintiff and told him about the October 2012 notices. Plaintiff told Berger to call Lontok and Berger told Lontok about the notices as well.
Plaintiff contends that because Kane and Berger accepted notices from Talon, they are estopped from claiming they did not act as plaintiff’s counsel. Plaintiff insists he never knew about these notices and that all defendants in this action failed to properly represent him.
In 2014, Talon started an action in Canada against plaintiff seeking damages and a declaration that plaintiff breached the terms of the purchase agreements and forfeited his deposits. Talon claimed plaintiff ignored multiple notices for the closing dates and failed to close on the five units. Plaintiff filed his own action against Talon in Canada as well.”
“New York’s borrowing statue, CPLR 202, provides that “An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without state where the cause of action accrued, except that where the cause of action accrued in favor of a resident of the state the time limited by the laws of the state shall apply.” “[I]n actions brought by non-New York residents, the shorter of the New York Statute of Limitations or the limitations period of the jurisdiction where the cause of action accrued will apply” (Ackerman v Price Waterhouse, 252 AD2d 179, 195, 683 NYS2d 179 [1st Dept 1998]).
Here, plaintiff, a New Jersey resident, brings a legal malpractice claim against Kane and Berger. The applicable statute of limitations for a claim of legal malpractice is three years in New York (CPLR 214) and six years in New Jersey (McGrogan v Till, 167 NJ 414, 426, 771 A2d 1187 ). Therefore, New York’s three-year statute of limitations period applies.
The absolute latest date Kane or Berger (on behalf of Kane) could possibly have committed legal malpractice was February 7, 2013— the latest closing date referenced in the complaint (seecomplaint at 17 [alleging that Kane received two notices from Harris Schaefer on December 20, 2012 that closings for four separate units would occur on February 7, 2013]). Taking these facts as true, as the Court must on a motion to dismiss, this action was still commenced more than three years later – in October 2016. Therefore, this action is time barred against Kane and Berger.
Plaintiff’s reliance on a theory of a continuing duty of representation does not compel a different result. Plaintiff allegedly suffered damages because he was unaware of these notices and lost his down payments when he ignored the closing dates. That means the cause of action accrued at those closing dates— assuming arguendo that Kane and Berger had some continuous duty to represent plaintiff after plaintiff fired Kane in October 2006.”