Island Consol. v Grassi & Co., Certified Public Accountants PC 2025 NY Slip Op 30094(U) January 7, 2025 Supreme Court, New York County Docket Number: Index No. 451469/2023 Judge: Margaret A. Chan came as somewhat of a surprise to read. Not only did a statute of limitations defense in an accounting malpractice suit fail, but “gross negligence” and a fraud claim was found not duplicative of a malpractice claim.

“In this professional malpractice action, plaintiffs Island Consolidated, Eastern Materials Corp., Island International Exterior Fabricators Del LLC, and Island Exterior Fabricators LLC (hereinafter collectively referred to as “Island” or “Plaintiffs”) allege professional malpractice and gross negligence against their accountant, defendant Grassi & Co., Certified Public Accountants PC for the sales tax advice it gave plaintiffs in 2015. In reliance on defendant’s 2015 sales tax advice, plaintiffs sustained monetary damages through tax penalties and interests on repayment costs to the New York State Department of Taxation and Finance, costs, and lost profits. Defendant moves to dismiss plaintiffs’ Amended Complaint for failure to: (1) comply with the condition precedent before bringing a suit against defendant; (2) timely bring their claims within the three-year statute of limitations; and (3) state a cause of action with sufficiency. Alternatively, defendant urges dismissal of damages on the grounds that they are not recoverable and is limited by the parties’ agreement. Plaintiffs oppose the motion. For the reasons stated below, defendant’s motion is denied.”

“Statute of Limitations Defendant argues that plaintiffs’ causes of action based on malpractice for its sales tax advice in 2015 are barred by the three-year statute of limitations for professional malpractice (id. at 9-11). And because such a claim accrues when the malpractice is initially committed, plaintiffs’ claims for professional malpractice expired in 2018 (id. at 10). Defendant adds that the continuous representation doctrine did not toll the statute of limitations here because the recurrence of any professional relationship between the parties was limited to incidental and general advising and not specific to the 2015 advice (id. at 11). In opposing defendant’s statute of limitations argument, plaintiffs contend that the parties had an understanding that more work is needed and that defendant had to engage in corrective measures or remedial measures (id. at 18). Citing Shumsky v Eisenstein (96 NY2d 164, 168 [2001]), plaintiffs assert that “[f]or accounting malpractice, the statute of limitations begins to run when the accounting representation is completed. The continuous representation doctrine tolled the statute of limitations for plaintiffs’ cause of action such that their complaint is timely” (id. at 18-19). Plaintiffs contend that defendant continued to provide their professional advice and guidance on the sales tax issues from 2015 through late 2021 and dealt with tax authorities to try to avoid the very sales taxes that defendant had claimed were not taxable (id.). Plaintiffs claim that defendants were engaged in continuous representant which tolls the statute of limitations for accounting malpractice (id. at 18 citing Lemle v Regen, Benz & MacKenzie, CPA, PC, 165 AD3d 414, 415 [1st Dept 2018]). Pursuant to CPLR 214[6], the statute of limitations for accounting malpractice is three years. New York courts have held that a professional malpractice claim accrues at the time “the malpractice is committed, not when the clients discover it” (Williamson ex rel. Lipper Convertibles, L.P. v PricewaterhouseCoopers LLP, 9 NY3d 1, 8 [2007]); see also Lemle 165 AD3d at 414 [finding professional malpractice accrued when the client filed tax returns, not when client discovered they were wrong]). However, the continuous representation doctrine will toll a statute of limitations on a professional malpractice action when there is a continuing professional relationship between parties that specifically pertains to the matter in which the alleged malpractice was committed in the first place (see Shumsky, 96 NY2d 164). The continuous representation doctrine does not apply in cases where the professional relationship merely continues with later services that are not related to the original services (see Ackerman v PricewaterhouseCoopers, 252 AD2d 179 [1st Dept 1998]; see also CLP Leasing Co., LP v Nessen, 12 AD3d 226 [1st Dept 2004]). However, the continuous representation doctrine has been found to toll a statute of limitations where defendant undertook to defend or explain earlier advice they had provided or where the defendant represented plaintiffs in audited investigations by the IRS (see Ackerman, 252 AD2d 179 [holding defendants’ repeated use of an improper accounting method, repeated failure to disclose risks associated with it, and representations that it was handling an IRS audit in relation was enough evidence to support the application of continuous representation]; see also Lemle, 165 AD3d 414 [holding continuous representation doctrine tolled statute of limitations where without any new engagement by plaintiff, defendants undertook to respond to audit letter and defend or explain the treatment given on an earlier 2012 return and service was related to the alleged malpractice in 2012]; cf. Apple Bank for Sau. v PricewaterhouseCoopers LLP, 70 AD3d 438, 438 [1st Dept 2010] [holding continuous representation doctrine did not toll statute of limitations even where defendant audited plaintiffs year-end financial statements, prepared its tax returns and provided ad hoc tax advice to plaintiff because the parties never had an express, mutual agreement to advise plaintiff after the original advice]). Here, plaintiffs have alleged sufficient facts establishing that the continuous representation doctrine tolled the statute of limitations for professional malpractice in this case. While the follow-up June 16, 2020, memorandum and follow-up 2021 emails do repeat, clarify, and elaborate on the advice first given, this alone is likely not sufficient to rise to what is needed to trigger the continuous representation doctrine (see Apple Bank for Sau., 70 AD3d at 438). However, plaintiffs here also allege and demonstrate that defendant continued to provide their professional advice and guidance regarding sales taxes by defending a tax appeal on the exact issues through late 2021 (see Lemle, 165 AD3d at 414). These allegations support a reasonable inference that the parties’ professional relationship was not just comprised of a recurrence of general duties. Accordingly, defendant’s motion to dismiss the amended complaint as barred by the statute of limitations is denied.”

There is a not-well known exception to the statute of limitations found in CPLR 203(d) which is explained by the Appellate Division, Second Department in Getzel Schiff & Pesce, LLP v Shtayner 2024 NY Slip Op 06186 Decided on December 11, 2024.

“In November 2021, the plaintiff, Getzel Schiff & Pesce, LLP (hereinafter GSP), commenced this action against the defendants, Semyon Shtayner, Yasya Shtayner, AAMJ, LLC, Unifern, LLC, and Chicago Medallion Management Corp. (hereinafter collectively the defendants), alleging, among other things, breach of contract and unjust enrichment. In February 2022, the defendants interposed their answer with counterclaims alleging fraud in the inducement and professional malpractice. The defendants filed a third-party complaint against the third-party defendant, Jeffrey A. Getzel, alleging fraud in the inducement and professional malpractice. GSP moved pursuant to CPLR 3211(a) to dismiss the defendants’ counterclaims. Getzel separately moved pursuant to CPLR 3211(a) to dismiss the third-party complaint. In an order entered September 18, 2023, the Supreme Court granted the separate motions. The defendants appeal.

The Supreme Court properly granted that branch of GSP’s motion which was to dismiss the first counterclaim, alleging fraud in the inducement, and properly granted that branch of Getzel’s motion which was to dismiss the first cause of action of the third-party complaint, alleging fraud in the inducement. “Under CPLR 3211(a)(1), a dismissal is warranted only if the documentary evidence utterly refutes [a party’s] factual allegations, conclusively establishing a defense as a matter of law” (Yan Ping Xu v Van Zwienen, 212 AD3d 872, 874 [internal quotation marks omitted]; see [*2]Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326; Leon v Martinez, 84 NY2d 83, 88). Here, the documentary evidence, consisting of engagement letters (see Attallah v Milbank, Tweed, Hadley & McCloy, LLP, 168 AD3d 1026, 1028), utterly refuted the defendants’ factual allegations and conclusively established a defense to those claims as a matter of law.

The Supreme Court properly granted that branch of Getzel’s motion which was to dismiss the second cause of action of the third-party complaint, alleging professional malpractice. “A defendant who seeks dismissal of a complaint on the ground that it is barred by the statute of limitations bears the initial burden of proving, prima facie, that the time in which to commence an action has expired” (Mello v Long Is. Vitreo-Retinal Consultant, P.C., 172 AD3d 849, 850; see CPLR 3211[a][5]). “If the defendant satisfies this burden, the burden shifts to the plaintiff to raise a question of fact as to whether the statute of limitations was tolled or otherwise inapplicable, or whether the plaintiff actually commenced the action within the applicable limitations period” (Barry v Cadman Towers, Inc., 136 AD3d 951, 952).

An action to recover damages for accounting malpractice must be commenced within three years (see CPLR 214[6]; Schwartz v Leaf, Salzman, Manganelli, Pfiel & Tendler, LLP, 155 AD3d 803, 803). “A cause of action alleging professional malpractice against an accountant accrues upon the client’s receipt of the accountant’s work product” (Schwartz v Leaf, Salzman, Manganelli, Pfiel & Tendler, LLP, 155 AD3d at 803; see Ackerman v Price Waterhouse, 84 NY2d 535, 541). Here, Getzel established that the malpractice claim against him accrued more than three years before the defendants filed their third-party complaint. In opposition, the defendants failed to raise a question of fact as to whether the statute of limitations was tolled by the doctrine of continuous representation (see CRC Litig. Trust v Marcum, LLP, 132 AD3d 938, 939; Weiss v Deloitte & Touche, LLP, 63 AD3d 1045, 1047).

However, the Supreme Court erred in granting that branch of GSP’s motion which was to dismiss the second counterclaim, alleging professional malpractice, to the extent that counterclaim seeks to offset any award of fees to GSP. Even crediting the court’s determination that this claim accrued on February 4, 2019, rendering time-barred the counterclaim alleging professional malpractice asserted on February 15, 2022, the defendants are permitted, pursuant to CPLR 203(d), to seek equitable recoupment in a counterclaim. CPLR 203(d) provides, “[a] defense or counterclaim is interposed when a pleading containing it is served. A defense or counterclaim is not barred if it was not barred at the time the claims asserted in the complaint were interposed, except that if the defense or counterclaim arose from the transactions, occurrences, or series of transactions or occurrences, upon which a claim asserted in the complaint depends, it is not barred to the extent of the demand in the complaint notwithstanding that it was barred at the time the claims asserted in the complaint were interposed.” “This provision allows a defendant to assert an otherwise untimely claim which arose out of the same transactions alleged in the complaint, but only as a shield for recoupment purposes, and does not permit the defendant to obtain affirmative relief” (Balanoff v Doscher, 140 AD3d 995, 996). This counterclaim alleging professional malpractice relates to GSP’s performance of accounting services pursuant to which GSP would recover, and, thus, the counterclaim falls within the scope of CPLR 203(d), permitting the counterclaim to the extent it seeks to offset any award of fees to GSP, but not to the extent it seeks affirmative relief beyond an offset. Further, and contrary to GSP’s contention, the second counterclaim adequately states a cause of action for professional malpractice (see CPLR 3211[a][7]; see generally Nonnon v City of New York, 9 NY3d 825, 827).”

Ostrander v Mullen 2024 NY Slip Op 06461 Decided on December 20, 2024
Appellate Division, Fourth Department is an example of what really sounds like a JL 487 kind of claim. It concerns allegations of a “forged” deed and attempts to use it in litigation.

“We agree with plaintiffs that Supreme Court erred in dismissing the first cause of action against Moore, sounding in violations of Judiciary Law § 487. Judiciary Law § 487 provides, in pertinent part, that “[a]n attorney or counselor who . . . [i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party . . . [i]s guilty of a misdemeanor, and in addition to the punishment prescribed therefor by the penal law, he forfeits to the party injured treble damages, to be recovered in a civil action.” In essence, the statute “imposes liability for the making of false statements with scienter” (Bill Birds, Inc. v Stein Law Firm, P.C., 35 NY3d 173, 178 [2020]). However, “Judiciary Law § 487 is not a codification of common-law fraud and therefore does not require a showing of justifiable reliance” (id.; see Amalfitano v Rosenberg, 12 NY3d 8, 14 [2009]). Stated another way, “liability under the statute does not depend on whether the court or party to whom the statement is made is actually misled by the attorney’s intentional false statement” (Bill Birds, [*2]Inc., 35 NY3d at 178); i.e., the statute “focuses on the attorney’s intent to deceive, not the deceit’s success” (Amalfitano, 12 NY3d at 14).

Here, plaintiffs alleged in their amended complaint that, from the time he became the client’s attorney, Moore engaged in a pattern of conduct whereby he advocated for the validity of a fraudulent deed, and oversaw the revision of fraudulent surveys based upon that deed. Plaintiffs alleged that Moore was in possession of documents and correspondence establishing that the deed was the fraudulent product of the client and defendant Aaron I. Mullen, an attorney who had previously represented the client, and that Moore failed to disclose those items despite receiving a valid discovery demand for them. Plaintiffs also alleged that Moore instituted a CPLR article 78 proceeding based upon the allegedly fraudulent deed and that he attached the deed to the petition. Plaintiffs further alleged that Moore participated in the client’s fraud, and did so intentionally and with knowledge of the client’s fraud, to plaintiffs’ detriment of more than $100,000 in legal fees and expenses. Accepting the facts as alleged in the amended complaint as true and according plaintiffs the benefit of every possible inference, as we must (see Nowlin v Schiano, 170 AD3d 1635, 1635 [4th Dept 2019]), we conclude that plaintiffs’ factual allegations with respect to the Judiciary Law § 487 cause of action are sufficient to survive Moore’s motion to dismiss, and we therefore modify the order accordingly.”

Seibel v Scarola Zubatov Schaffin PLLC 2025 NY Slip Op 00067 Decided on January 07, 2025 Appellate Division, First Department is the story of how a law firm successfully withdrew from a case when the client became less than cooperative.

“The court properly granted defendant’s motion for summary judgment dismissing the complaint for legal malpractice and breach of contract. Contrary to plaintiffs’ contention, the affidavit by defendant law firm managing member, Richard Scarola, was admissible. Scarola’s statements, recounting what Steven Bennett, now deceased, one of the attorneys assigned to plaintiffs’ case, told him, were not offered for the truth of the matters asserted, but for the effect those statements had on Scarola’s state of mind, specifically on why he decided that SZS should discontinue its representation of plaintiffs Rowen Seibel and the Seibel-related entities (see Matter of Bergstein v Board of Educ., Union Free School Dist. No. 1 of Towns of Ossining, New Castle & Yorktown, 34 NY2d 318, 323-324 [1974]). The affidavit of Daniel Brooks, the other attorney assigned to plaintiffs’ matter, was admissible based on his personal knowledge of the facts stated therein. Also contrary to plaintiffs’ contention, the Brooks affidavit did not require the attachment of SZS’s billing statements, as Seibel not only failed to object to the billing statements, but admittedly paid the fees (see Aronson Mayefsky & Sloan, LLP v Praeger, 228 AD3d 182, 185 [1st Dept 2024]). In fact, Seibel did not object to the fees until the instant action; such belated protest is insufficient to defeat summary judgment (see Mintz & Gold LLP v Daibes, 125 AD3d 488, 489 [1st Dept 2015]).

SZS was properly granted summary judgment based on Seibel’s breach of the parties’ retainer agreement (see Markov v Katt, 176 AD3d 401, 401-402 [1st Dept 2019]). The retainer agreement called for a retainer and installment payments from Seibel totaling $500,000 as a cap through discovery and summary judgment (if any). The retainer agreement further provided that either party could terminate the relationship at any time, with SZS having the right to terminate its services if Seibel failed “to cooperate with a reasonable request, or if [SZS] determines, in its sole discretion, that continuing services to [Seibel] would be unethical, impractical, improper or otherwise inappropriate.” Several circumstances warranted SZS’s discontinuation of its representation of Seibel, including: the breach of Seibel’s duty to be truthful about certain kickbacks and his supposed disassociation from agreements with Caesars Enterprises Inc.; Seibel’s refusal to cooperate with SZS’s reasonable request that he produce his prenuptial agreement to Caesars; and the impracticability of continuing the representation due to Seibel’s failure to pay key vendors and expert witnesses and because of Bennett’s untimely death.

Furthermore, SZS demonstrated [*2]that it had grounds to discontinue its services without refunding Seibel’s fees. Seibel failed to object to the billing, which exceeded the $500,000 cap, and admitted that he paid that amount, thereby waiving any right he may have had to insist that SZS either continue representation or refund a portion of its fees (see generally Hyperion Med. P.C. v TriNet HR III, Inc., 190 AD3d 456, 458 [1st Dept 2021]). Seibel is also estopped from claiming that SZS breached the retainer agreement by terminating its services (see Nassau Trust Co. v Montrose Concrete Prods. Corp., 56 NY2d 175, 184 [1982]). SZS relied to its detriment upon Seibel’s agreement to find replacement counsel, and Seibel never claimed that SZS was not entitled to discontinue its representation, nor did he request that SZS refund the fees already paid.”

Try to follow the events in 482 Tompkins Realty LLC v 482 Tompkins Capital LLC 2024 NY Slip Op 34520(U) December 18, 2024 Supreme Court, Kings County Docket Number: Index No. 1322/18 Judge: Larry D. Martin and decide for yourself who might be at fault.

“Plaintiffs commenced this action to recover damages and equitable relief stemming from a transaction where the subject property at 482 Tompkins Avenue in Brooklyn, owned by 482 Realty, was conveyed to defendant 482 Tompkins SME LLC (SME) as part of an alleged fraudulent foreclosure rescue scheme. 482 Realty, a limited liability company held by members Emeli, as to a 90% interest, and Komolafe, as to a 10% interest, assumed title to the subject property by deed dated November 15, 2007. In 2015, a foreclosure action was commenced on the mortgage encumbering the property. Plaintiffs wished to retain ownership of the property, but were unable to obtain the refinancing necessary to pay off the delinquent mortgage. Consequently, plaintiffs came into contact with defendant Eran Silverberg (Silverberg), member of defendant SME Capital Management LLC (SME Capital), who allegedly promised to help plaintiffs obtain refinancing that would save the subject property from foreclosure. According to the complaint, Silverberg represented that title to the property would have to be transferred to a newly formed limited liability company (LLC) due to the poor credit standing of 482 Realty, but that plaintiffs would still retain the majority interest in the new LLC, with Silverberg having a small interest so as to enable him to negotiate with the foreclosing mortgagee. Plaintiffs allege being told that after three months’ worth of payments were made on a hard money loan given by Silverberg’s company, they would be able to obtain an affordable conventional refinancing loan from a banking institution. Plaintiffs allege that Kaminsky’s firm was brought in by Silverberg to act as plaintiffs’ purported counsel in the transaction. 482 Realty, by Komolafe, entered into a retainer agreement with Kaminsky’ s firm, dated April 18, 2017, which provided, in part, the following: “We agree to assist and represent you in settling the mortgage default and resolve a payoff of the loan amount, which will result in discontinuance of the foreclosure, but not to appear in the foreclosure case and litigate the foreclosure defense. *** “Client waives attorney client confidentiality with regard to the proposed new lender and the mortgage broker, and client wants David A. Kaminsky & Associates, P.C. to communicate with them jointly in email threats, and that client waives any conflict of interest in David A. Kaminsky & Associates, P.C. representing her, and client understands that David A. Kaminsky & Associates, P.C. have in the past and continue to represent Evan Silverberg in separate unrelated matters, and he is a principal and/or participant in the new loan being arranged to payoff Client’s existing lender.” On June 8, 2017, plaintiffs entered into a ‘joint venture” with an “option agreement” (as alleged in the complaint) with the newly formed company, SME, whereby the existing mortgage in foreclosure was satisfied. The transaction included a Contract of Sale between 482 Realty and SME, a Bargain and Sale Deed conveying the property from 482 Realty to SME, an Operating Agreement for SME establishing a 90% interest in defendant 482 Tompkins Capital LLC (482 Capital) and a 10% interest in 482 Realty, and an Option Agreement giving 482 Realty the option of purchasing all membership interests held by 482 Capital in SME for an exercise price of $2,150,000.00. The option would be available to 482 Realty so long as monthly payments of $25,083.33 were remitted to 482 Capital. The option was available to 482 Realty from the date of the Option Agreement (June 8, 2017) through June 8, 2018 or the date of an option payment default as defined in the Option Agreement. The aforementioned documents were signed by Komolafe on behalf of 482 Realty as managing member. Also executed at the closing was a stipulation of discontinuance of the foreclosure action with prejudice by the foreclosing plaintiffs attorney and 482 Realty’s foreclosure action counsel. The deed conveying the property from 482 Realty to SME, dated June 8, 2017, was recorded on June 30, 2017. A satisfaction of the mortgage encumbering the property, dated June 8, 2017, was recorded on June 30, 2017. Plaintiffs allege that following the closing, Komolafe was made managing agent to operate and maintain the building and to collect rents, which would be deposited into a joint account with Silverberg to be used toward the monthly payments of $25,083.33, with plaintiffs making up any balance from their own income. Plaintiffs allege that disputes thereafter arose over payment of taxes and other financial issues, and that they were not given access to SME’s bank account and could not substantiate any balance which may be owed on top of the rental income collected. Plaintiffs maintain that when they attempted in January 2018 to make the monthly payment plus additional monies towards the taxes, the payments were rejected and plaintiffs were held in default. After issuing a notice of default, dated January 2018, 482 Capital terminated 482 Realty’s option to purchase its membership interest in SME.”

“In their complaint, filed on June 6, 2018, plaintiffs set forth causes of action for a declaration of rights under Real Property Actions and Proceedings Law [RP APL] article 15 (first), equitable mortgage under Real Property Law [RPL] § 320 (second), fraud in the factum (third), fraudulent inducement (fourth), constructive trust (fifth), civil conspiracy to commit fraud (sixth), specific performance (seventh), breach of contract/anticipatory breach of contract (eighth) and legal malpractice (ninth). Following the commencement of this action, motions were brought by USC, Silverberg and Kaminsky for dismissal of the complaint under CPLR 3211. By order dated February 20, 2019 (Hon. Sylvia Ash, J.), the court denied USC’s motion without prejudice, granted Silverberg’s motion “as to his personal capacity,” denied Kaminsky’s motion “without prejudice as to fraud and conspiracy” and granted Kaminsky’s motion as to “all other causes of action.” Discovery proceeded in this matter, including the examinations before trial (EBTs) of Kaminsky, Silverberg, Emeli and Komolafe. A Note of Issue indicating that discovery was complete was filed on April 9, 2024. Kaminsky brought the instant motion for summary judgment on June 7, 2024.”

“In support of his motion for summary judgment, Kaminsky submits, among other proof, a copy of the retainer agreement stating that his representation was limited to settling the mortgage default and resolving a payoff of the loan amount, copies of the June 8, 2017 closing documents executed by Komolafe on behalf of 482 Realty, including the Contract of Sale, deed, Operating Agreement of SME setting forth, inter alia, the 10% interest of 482 Realty and 90% interest of 482 Capital, the Option Agreement setting forth the monthly payment requirements of 482 Realty with the Option to purchase all interest of SME, and Kaminsky’s own EBT testimony.”

“The proof submitted demonstrates that Kaminsky made no misrepresentations regarding the nature and effect of Komolafe’s execution of the documents at the June 8, 2017 closing, that no questions or reservations were made by Komolafe regarding the documents she signed, or that Kaminsky was privy to any alleged representations made by Silverberg regarding the transaction, or any extrinsic promise Silverberg may have made regarding the joint venture. Accordingly, Kaminsky established prima facie entitlement to summary judgment dismissing plaintiffs’ claims of fraud in the factum, fraudulent inducement, and conspiracy to commit fraud.”

Springs v L&D Law P.C. 2025 NY Slip Op 00032 Decided on January 02, 2025
Appellate Division, First Department discusses the “judgment rule” and how it should be applied in a legal malpractice setting.

“Plaintiff, a former New York City firefighter, first retained defendant Liggieri to represent him in a 2017 discrimination action in the Southern District of New York against the City of New York, the FDNY Commissioner and four individual firefighters (the 2017 Action). Plaintiff claimed that he was retaliated against for filing an Equal Employment Opportunity Commission (EEOC) complaint against the FDNY and was subjected to a hostile work environment. Plaintiff was permitted to sever his claims against the individual firefighters and bring them in state court. The remaining claims against the City defendants went to trial and the jury found in favor of defendants.

Thereafter, plaintiff was assigned to a new firehouse. In 2019, plaintiff retained Liggieri again, who filed a new and separate lawsuit on plaintiff’s behalf in the Southern District of New York against the City of New York, the FDNY Commissioner and two individual firefighters from his new firehouse (the 2019 Action). In the 2019 Action, plaintiff brought claims for discrimination, retaliation and a hostile work environment in violation of federal, state and city law. The 2019 Action is the subject of this legal malpractice litigation.

Defendants moved to dismiss the 2019 Action on the ground that plaintiff failed to allege that there was a causal connection between the protected activity, namely the filing of his EEOC complaint and the 2017 Action, and the adverse employment actions he suffered. After consulting with plaintiff, Liggieri made a tactical decision to amend plaintiff’s complaint in an attempt to moot the motion to dismiss, rather than to oppose the motion on its merits. The 2019 action was ultimately dismissed. In relevant part, the court found that plaintiff failed to make out a claim for retaliation because the amended complaint did not state that “Defendant X committed Act Y in retaliation for [plaintiff] filing an EEOC complaint or the 2017 [Action]).”

Following the dismissal of the 2019 Action, plaintiff requested that Liggieri file a motion for reargument and inquired about the possibility of appealing the decision. Although Liggieri initially agreed with plaintiff that a motion for reargument could be worth pursuing, he later claimed, after additional research, that a motion for reargument was not viable. With regards to the possibility of appealing the decision, Liggieri told plaintiff that “this case is over and there’s nothing we can do.”

In 2023, plaintiff commenced this action for legal malpractice against Liggieri and his firm. Plaintiff claimed that defendants failed to properly amend the complaint in the 2019 Action to state a causal connection between the filing of his EEOC complaint and [*2]the 2017 action and the adverse employment actions he suffered. Plaintiff further claimed that defendants committed additional acts of legal malpractice by failing to move for reargument and failing to apprise him of his rights to appeal the 2019 Action.

Supreme Court properly denied defendants’ motion to dismiss and granted plaintiff’s cross-motion to amend the complaint. “To establish a cause of action for legal malpractice, plaintiff must show that: (i) the attorney was negligent; (ii) the attorney’s negligence was a proximate cause of plaintiff’s losses; and (iii) plaintiff suffered actual damages” (RTW Retailwinds, Inc. v Colucci & Umans, 213 AD3d 509, 510 [1st Dept 2023]). Plaintiff has sufficiently alleged that defendants were negligent in failing to amend the complaint to state that a causal relationship existed between plaintiff’s filing of the EEOC complaint and the 2017 Action and the adverse treatment he suffered. Plaintiff has also sufficiently alleged that, but for defendants’ failure to properly assert his claim, it would not have been dismissed on the ground that he failed to allege a causal connection between the protected activity and the adverse employment action.

Supreme Court correctly declined to find that the professional judgment rule protected defendants from liability. Pursuant to the professional judgment rule, an attorney’s “selection of one among several reasonable courses of action does not constitute malpractice” (Rosner v Paley, 65 NY2d 736, 738 [1985]). Defendants maintain that their decision to amend the complaint in an attempt to moot the 2019 motion to dismiss instead of opposing the motion on its merits was a reasonable strategic choice that is protected by the professional judgment rule. However, plaintiff’s allegations are that defendants failed to submit a memorandum of law in opposition to the motion to dismiss and instead filed a deficient amended complaint that failed to state that there was a causal connection between plaintiff’s decision to file an EEOC complaint and the 2017 Action and the adverse treatment he suffered. At this juncture, the professional judgment rule is not available as a defense because the record does not allow us to make a determination that defendants’ course of conduct was reasonable as a matter of law (see Escape Airports [USA], Inc. v Kent, Beatty & Gordon, LLP, 79 AD3d 437, 439 [1st Dept 2010]). Absent a finding that the attorney’s courses of conduct were reasonable as a matter of a law, a determination that a course of conduct constitutes malpractice requires findings of fact (see Bernstein v Oppenheim & Co., 160 AD2d 428, 430 [1st Dept 1990]).”

Chang v Yi Lin 2024 NY Slip Op 33338(U) September 20, 2024 Supreme Court, New York County Docket Number: Index No. 161222/2023 Judge: Mary V. Rosado documents what is a not unusual situation. In a divorce setting, one of the parties often think that a single attorney is representing them as well as their spouse. While it is sometimes true that the attorney is representing both, it is often a mistake made by the less monied spouse. Here, the wife’s unilateral belief that the attorney represented her as well was rejected by the Court.

“This is a legal malpractice action. Plaintiff alleges Defendant represented her and her former husband in various real estate, immigration, and business-related matters (see NYSCEF Doc. 1 at ,i 3). Plaintiff alleges Defendant represented her former husband in a divorce proceeding (id. at ,i 15). Plaintiff further alleges that she consulted with Defendant prior to the divorce proceeding about her desire to divorce her husband. During the divorce proceeding, she believed Defendant was representing both her and her husband (id. at ,i 16). Plaintiff was allegedly never told she should seek independent counsel (id. at ,i 19). Allegedly, it was only after consulting with a separate attorney that Plaintiff learned Defendant made numerous misrepresentations to Plaintiff during the divorce proceedings, and here were assets omitted from the parties’ divorce agreement (id. at ,r,r 44-45). Plaintiff also alleges that pursuant to a 2020 telephone call from Defendant, she learned her name was not taken off certain marital liabilities.”

“A defendant who moves to dismiss based on the statute of limitations bears the initial burden of proving that the time to sue has expired (Lebedev v Blavatnik, 144 AD3d 24 [1st Dept 2022]). CPLR § 214(6) provides for a three-year period of limitations for legal malpractice claims. As held by the Court of Appeals, most legal malpractice claims accrue from the day an actionable injury occurs, even if the aggrieved party is ignorant of the wrong (McCoy v Feinman, 99 NY2d 295 [2002]; see also Flintlock Const. Servs., LLC v Rubin, Fiorella & Friedman, LLP, 188 AD3d 530 [1st Dept 2020]). Here, the alleged wrongs occurred during a divorce proceeding which was concluded in 2015 (see Zorn v Gilbert, 8 NY3d 933 [2007] [malpractice claim accrued, at the latest, when a judgment of divorce was entered in the underlying action]). The Complaint was not filed until November 15, 2023. Therefore, the claims related to the divorce are untimely. Although Plaintiff is correct the continuous representation doctrine tolls the statute of limitations, this doctrine is only applicable where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim (McCoy, supra at 306). Here, there are no facts alleging any representation as to the divorce proceedings after 2015, aside from an isolated telephone call in 2020. However, it is only alleged that on the November 2020 telephone call, Defendant called Plaintiff to have Plaintiffs name removed from an SBA loan and the deeds and mortgage for various properties in Pennsylvania. This telephone call, which is the only timely legal interaction between Plaintiff and Defendant, is by itself insufficient to state a legal malpractice claim. This isolated phone call does not constitute a “mutual understanding” to invoke the continuous representation doctrine, especially where the documentary evidence in the form of Court filings specifically state that Defendant was only representing Plaintiffs former husband in the proceedings (see also Farina v Katsandonis, P. C., 197 AD3d 1033 [1st Dept 2021] [“Plaintiff failed to allege sufficient facts showing there was a mutual understanding of the need for further representation”]). Simply, there is no clear indicia of an ongoing, continuous, and dependent relationship between the client and attorney related to the divorce proceeding. There is only a conclusory and self-serving affidavit of Plaintiff which fails to list any conversations or ongoing legal work between Plaintiff and Defendant after the divorce proceeding and prior to the November 2020 telephone related to the underlying divorce proceeding (see NYSCEF Doc. 13). Therefore, the legal malpractice cause of action predicated on Defendant’s alleged representation of Plaintiff in her divorce proceeding is dismissed as time barred. While the Court does not condone Defendant’s actions in representing Plaintiffs former husband in a divorce proceeding despite what appears to be a conflict of interest, the Court cannot toll the statute of limitations given the facts and allegations pled.”

Lee v Leeds, Morelli & Brown, P.C. 2024 NY Slip Op 06624 Decided on December 24, 2024 Appellate Division, Second Department is another case against the law firm of Leeds, Morelli & Brown, P.C., which developed a method of suing large companies on behalf of their employees, which drew at least two legal malpractice cases against it. In this case, as in Dowe v. Prudential Financial, Inc. and Leeds Morelli & Brown, the claims were for legal malpractice against the lawyers.

“In a putative class action, inter alia, to recover damages for legal malpractice and fraud, the plaintiff Cheryl Lee and purportedly Charles Roe appeal from an order of the Supreme Court, Kings County (Ingrid Joseph, J.), dated September 30, 2020. The order, insofar as appealed from, upon reargument, adhered to a prior determination in an order of the same court dated January 8, 2020, granting those branches of the motion of the defendants Leeds, Morelli & Brown, P.C., Leeds Morelli & Brown, LLP, Leeds, Morelli & Brown, Lenard Leeds, Steven A. Morelli, Jeffrey K. Brown, James Vagnini, Frederick David Ostrove, and Robert John Valli, Jr., which were pursuant to CPLR 3211(a) to dismiss the first, third, and sixth causes of action and denying, as academic, a cross-motion to substitute the administrator of the estate of Charles Roe as a plaintiff in place of Charles Roe.”

“On March 23, 2005, Lee and Roe commenced this action, individually and purportedly on behalf of class members similarly situated, against LMB, Leeds, Morelli & Brown, P.C., Leeds Morelli & Brown, LLP, six of LMB’s attorneys (hereinafter collectively the LMB defendants), and Bear Stearns, among others. The complaint alleged that LMB secretly entered into an agreement with Bear Stearns to resolve alleged employment discrimination claims through a global settlement process that would cap recovery by employees and protect Bear Stearns from negative publicity and liability for a number of employment discrimination claims, including claims of retaliation against employees who pursued employment discrimination claims against Bear Stearns. The complaint further alleged that, upon reaching such an agreement with Bear Stearns for a large payment to LMB, LMB recruited Lee, Roe, and other employees with valid employment discrimination claims, falsely agreeing to litigate the employment discrimination claims, and steered Lee, Roe, and the other employees into the global settlement process where they were advised to waive judicial and administrative remedies for a settlement amount that ultimately was very small. The first, third, and sixth causes of action sought to recover damages for breach of fiduciary duty, fraud, and legal malpractice, respectively, against the LMB defendants.

During the pendency of the action, Roe died. On February 14, 2018, Deborah Roe (hereinafter the administrator) obtained letters of administration to administer Roe’s estate.

Thereafter, the LMB defendants and Bear Stearns separately moved pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against each of them. Lee, and purportedly Roe, cross-moved to substitute the administrator as a plaintiff in place of Roe. In an order dated January 8, 2020, the Supreme Court granted the motions of the LMB defendants and Bear Stearns, and denied, as academic, the cross-motion.

Lee, and purportedly Roe, moved, among other things, for leave to reargue the opposition to those branches of the LMB defendants’ motion which were pursuant to CPLR 3211(a) to dismiss the first, third, and sixth causes of action and the cross-motion. In an order dated September 30, 2020, the Supreme Court, inter alia, upon reargument, adhered to its prior determination granting those branches of the LMB defendants’ motion and denying the cross-motion. Lee, and purportedly Roe, appeal.

“The death of a party divests the court of jurisdiction and stays the proceedings until a proper substitution has been made pursuant to CPLR 1015 (a)[, and] any determination rendered without such substitution will generally be deemed a nullity” (Singer v Riskin, 32 AD3d 839, 839-840 [citations omitted]; see Hemmings v Rolling Frito-Lay Sales, LP, 220 AD3d 754, 757; Vicari v Kleinwaks, 157 AD3d 975, 976). Here, the Supreme Court erred in considering the separate motions of the LMB defendants and Bear Stearns pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against each of them because the motions were made after Roe’s death and prior to any substitution of a personal representative of his estate (see id. § 1015; Matter of Einstoss, 26 NY2d 181; Neuman v Neumann, 85 AD3d 1138, 1139; Manto v Cerbone, 71 AD3d 1099, 1100). Accordingly, so much of the order dated January 8, 2020, as granted the separate motions of the LMB defendants and Bear Stearns pursuant to CPLR 3211(a) to dismiss the complaint insofar as asserted against each of them must be vacated as a nullity (see CPLR 1015; Matter of Einstoss, 26 NY2d 181; Neuman v Neumann, 85 AD3d 1138), and the appeal taken by the plaintiff Cheryl Lee from so much of the order dated September 30, 2020, as, upon reargument, adhered to the determination in the order dated January 8, 2020, granting those branches of the LMB defendants’ motion which were pursuant to CPLR 3211(a) to dismiss the first, third, and sixth causes of action must be dismissed.

Furthermore, the death of a party also terminates an attorney’s authority to act on behalf of the deceased party (see Vicari v Kleinwaks, 157 AD3d at 976; Vapnersh v Tabak, 131 AD3d 472, 474; Lewis v Kessler, 12 AD3d 421, 422). Thus, Roe’s former attorneys lacked the authority to file either the cross-motion or this appeal on his behalf. Accordingly the appeal purportedly taken on Roe’s behalf must be dismissed (see Vicari v Kleinwaks, 157 AD3d 975).”

“Moreover, Lee established potential merit to the action sufficient to warrant substitution. In this respect, and contrary to the LMB defendants’ contention, the legal malpractice cause of action was not time-barred. A cause of action to recover damages for legal malpractice must be commenced within three years from the time of accrual (see CPLR 203[a]; 214[6]). “A legal malpractice claim accrues when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court” (McCoy v Feinman, 99 NY2d 295, 301 [internal quotation marks omitted]). Here, the legal malpractice claims accrued, at the latest, on March 6, 2002, and March 7, 2002, when Lee and Roe, respectively, executed agreements to settle their employment discrimination claims and release Bear Stearns for specified amounts (see Zorn v Gilbert, 8 NY3d 933, 934; Amodeo v Kolodny, P.C., 35 AD3d 773, 774). Pursuant to the doctrine of continuous representation, the statute of limitations is tolled for the period following the alleged malpractice until the attorney’s ongoing representation of the client on the particular matter is completed (see Grace v Law, 24 NY3d 203, 212; Shumsky v Eisenstein, 96 NY2d 164, 167-168; Farage v Ehrenberg, 124 AD3d 159, 164). Here, Lee established that LMB’s representation on the employment discrimination claims continued at least through March 29, 2002 (see Zorn v Gilbert, 8 NY3d at 934; Shumsky v Eisenstein, 96 NY2d at 170-171; Amodeo v Kolodny, P.C., 35 AD3d at 774; see also Grace v Law, 24 NY3d at 212). The legal malpractice cause of action, therefore, was not time-barred.

Since the action has potential merit, and in light of the strong public policy favoring the resolution of actions on the merits and the lack of any prejudice to the defendants, the cross-motion to substitute the administrator of the estate of Charles Roe as a plaintiff in place of Charles Roe should have been granted (see Hemmings v Rolling Frito-Lay Sales, LP, 220 AD3d at 757; Petion v New York City Health & Hosps. Corp., 175 AD3d at 520; Tokar v Weissberg, 163 AD3d at 1033; Reed v Grossi, 59 AD3d at 511).”