How One Legal Malpractice Plaintiff Lost Twice

Hsu v Liu & Shields LLP  2013 NY Slip Op 30291(U)  February 7, 2013  Sup Ct, New York County
Docket Number: 400781/12  Judge: Richard F. Braun is the story of how one set of plaintiffs lost this case twice, in fact three times.  Plaintiff is pro-se, and complains that he and other plaintiffs were the defendants in a NASD action. "In 2006 the National Association of Securities Dealers issued a decision against plaintiffs and their brokerage firm.  Plaintiffs' position is that the NASD made a mistake in charging them with violations.  Plaintiffs appealed the NASD decision with the SEC."  They hired defendants to handle the case.  After that it was all downhill.  Plaintiffs allege that defendants "allegedly represented that they would e-file the appeal with the court. Defendants represented the papers were timely filed. Upon plaintiffs’ request, defendants provided plaintiffs with a copy of the allegedly filed notice of appeal. Plaintiffs continued to make inquiry regarding the progress of the appeal, but eventually defendants refused to respond to plaintiffs’ inquiries. Plaintiffs filed a complaint against defendants with the Grievance Committee. Plaintiffs alleged that in responding to the Grievance Committee defendants falsified a letter that defendants had withdrawn as counsel from plaintiffs’ case. Plaintiffs deny receiving any letter, phone call, or email from defendants after February 14, 2008. Other alleged deceptions by defendants were that the SEC decision had never been served on defendants, that the time to appeal had not yet begun to run, and that plaintiffs could still hire another attorney to do the appeal. The Grievance Committee dismissed the plaintiffs’ complaint against defendants. From 2009 to 2011, plaintiffs attempted to appeal the NASD decision. In 201 1, plaintiffs’ action as to the NASD decision was dismissed by the judge because plaintiffs did not appeal the SEC decision, so the appellate remedy was waived. The New Jersey Bureau of Securities used the NASD decision as evidence to revoke plaintiffs’ registrations and assess monetary penal ties against plaintiffs."

"Plaintiffs argue that the legal malpractice claim occurred within the statute of limitations. However, plaintiffs fail to recognize that a legal malpractice claim accrues “when all the facts necessary to the cause of action have occurred” and the court can grant relief (McCoy v Feinman, 99 NY2d 295, 301 [2002]). Plaintiffs’ claim is based on the allegation that defendants failed to timely file an appeal, among other things. Relying on Glamm v Allen (57 NY2d 87, 95 [1982]), defendants note that a claim for malpractice related to a missed deadline accrues when the deadline is missed. The Court stated: “What is important is when the malpractice was committed, not when the client discovered it,” (id.) Plaintiffs also assert a purported fraud claim, forgery, deception, and a breach of agreement, all stemming from the alleged legal malpractice (cf. Melnitzky v Hollander, 16 AD3d 192 [ 1st Dept 20051 [where the fraud and collusion causes of action were dismissed under CPLR 32 1 1 (a) (71, due to their being grounded in the same allegations as the legal malpractice cause
of action]). CPLR 2 14 (6) provides for a three year statute of limitations for “an action to recover
damages for malpractice ..., regardless of whether the underlying theory is based in contract or tort.”  Plaintiffs’ action was not commenced within the three year statute of limitations. The continuous representation doctrine does not apply here. Further, defendants representation was limited to the terms of their agreement with plaintiffs. Therefore, the CPLR 321 1 (a) (5) branch of the motion should be granted."

 

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