is it legal malpractice for an attorney to answer a information subpoena concerning his retainer agreement with a client if the answer does not contain privileged communications?  We will not know the answer to this question from GREGORY P. MORSON, Plaintiff, -against KREINDLER & KREINDLER, LLP, Defendant.09 CV 2994 (DRH)(ARL)UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK, 2011 U.S. Dist. LEXIS 112310;September 28, 2011, Decided because plaintiff waited too long to bring the action.
 

"Plaintiff’s claims arise out of events that occurred during defendant’s legal [*2] representation of plaintiff (or "Morson") and his sister, Vanessa Morson, (collectively, the "Morsons"), who served as the co-administrators of their mother’s estate. The subject representation involved a 1996 case brought in this District alleging wrongful death against the Libyan government for its involvement in the 1988 bombing of Pan American Airlines flight 103 over Lockerbie, Scotland (the "Lockerbie action").2 See Morson v. The Socialist People’s Libyan Arab Jamahirya, No. 96 CV 2077 (TCP) (E.D.N.Y). In October 2002, a conditional settlement agreement was reached between the parties in that action that relied on the occurrence of three "triggering events," the details of which are not relevant for present purposes. (Statement of Undisputed Material Facts, pursuant to Local Civil Rule 56.1 ("56.1 Stmt.") ¶¶ 20-21.) Kreinder & Kreindler LLP represented many of the victims’ families in the Lockerbie action. (Rule 56.1 Statement ¶ 11.)

Prior to this conditional settlement, on December 26, 2001, judgment was entered against Morson for approximately $1.7 million in a separate lawsuit in the Southern District of New York. (56.1 Stmt. ¶¶ 24, 27); See Palazzetti Import/Export, Inc. v. [*3] Morson, No. 98 CV 722 (FM) (S.D.N.Y.)(the "Palazzetti action"). The judgment was later affirmed on appeal at some point in 2002. (56.1 Stmt. ¶ 28.) Kreindler & Kreindler LLP did not represent Morson in that action.

In late 2002, Morson and one Sergio Palazzetti began direct settlement negotiations without the aid of counsel regarding payment of the Palazzetti judgment. (56.1 Stmt. ¶ 34.) During these talks, Palazzetti indicated that he "would be amenable to settle for $500,000 in cash," as a lump sum, (Deposition of Sergio Palazzetti ("Palazzetti Dep.") at 58-69, D’s Ex. I), though no final agreement was entered into by the two men at that time. (See Deposition of Gregory Morson ("Morson Dep.") at 46-47, D’s Ex. G; see also Palazzetti Dep. at 51 ("The only thing I remember is that when we actually sort of agreed on the 500,000 number.").)

Around that same time, Palazzetti discussed with his attorney, Debra J. Guzov, what Palazzetti had learned primarily through the news media, viz., that Morson was involved in the Lockerbie action, that settlement talks were underway between the parties, and that Morson was potentially entitled to a large payout in that case. (56.1 Stmt. ¶¶ 22, 30; Palazzetti [*4] Dep. at 34-36.) Guzov then served Kreindler & Kreindler LLP with a "Restraining Notice," pursuant to N.Y. CPLR 5222, requesting that the firm complete an attached questionnaire concerning Morson’s current and potential assets. On January 15, 2003, James P. Kreindler ("Kreindler") completed the questionnaire and returned it to Guzov. (Pl’s Ex. 4.) In his response, Kreindler provided the following statement relevant to this suit: "We filed suit arising from the death of Eva I. Morson against Libya in 1996. We have a written settlement agreement which goes into effect when Libya complies with the United Nations requirements. Settlement not less than $5 million nor more than $10 million." (Pl.’s Ex. 5.)

Meanwhile, Palazzetti had informed his "trial counsel," Michael Regan (who had a lien on any judgment in the Palazzetti action), that he had discussed settling the Palazzetti action with Morson for $500,000. According to Palazzetti’s testimony, Regan informed him that he learned from Guzov that the Lockerbie action "would be resolved positively for the Morsons very soon," and that he should not settle for less than the judgment. (Palazzetti Dep. at 58) Shortly thereafter, Palazzetti communicated [*5] to Morson that he would no longer settle the judgment for $500,000. Palazzetti testified that he changed his position because he "was told that [he] could get the whole amount in a fairly short time." (Palazzetti Dep. at 9, 64.)

The Morson’s eventually recovered $10 million from the Lockerbie action (56.1 Stmt. ¶ 32; D’s Ex. L.), and Palazzetti collected the entire amount of his judgment from Morson, (Pl.’s Ex. 7)."
 

"As to the date of accrual of the malpractice claims, New York looks to the date in which the malpractice was committed, while Illinois and Massachusetts consider the date in which the plaintiff discovers his or her injury arising out of such misconduct. McCoy v. Feinman, 99 N.Y.2d 295, 301, 785 N.E.2d 714, 755 N.Y.S.2d 693 (2002) (A claim accrues "when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court." (citing Ackerman v. Price Waterhouse, 84 N.Y.2d 535, 541, 644 N.E.2d 1009, 620 N.Y.S.2d 318 (1994))); Shumsky v. Eisenstein, 96 N.Y.2d 164, 166, 750 N.E.2d 67, 726 N.Y.S.2d 365 (2001) (citing Glamm v. Allen, 57 N.Y.2d 87, 95, 439 N.E.2d 390, 453 N.Y.S.2d 674 (1982)("What is important is when the malpractice [*17] was committed, not when the client discovered it.")); Hester v. Diaz, 346 Ill. App. 3d 550, 553, 805 N.E.2d 255, 281 Ill. Dec. 887 (Ill. App. Ct. 5th Dist. 2004)("In Illinois, the statute of limitations for legal malpractice is two years ‘from the time the person bringing the action knew or reasonably should have known of the injury for which damages are sought.’" (citing 735 Ill. Compiled Statutes 5/13-214.3(b))); Lyons v. Nutt, 436 Mass. 244, 247, 763 N.E.2d 1065 (Mass. 2002)("The statute of limitations applicable to a legal malpractice claim begins to run when a client ‘knows or reasonably should know that he or she has sustained appreciable harm as a result of the lawyer’s conduct.’" (citing Williams v. Ely, 423 Mass. 467, 473, 668 N.E.2d 799 (1996))). Here, the purported malpractice was committed by defendant, and the resulting injury was discovered by plaintiff in or around January 15-22, 2003. See discussion supra. Plaintiff’s malpractice claims therefore accrued under the law of all three states during that period."