How does continuous representation interplay with claims of fraud by attorneys? Hansen-Nord v Youmans  2015 NY Slip Op 31684(U)  September 1, 2015  Supreme Court, New York County  Docket Number: 651924/2014  Judge: Anil C. Singh  discusses the unusual situation in which an attorney and a law firm are accused of aiding and abetting fraud, but not sued for legal malpractice.

“This case arises out of the commingling of funds between plaintiff, her ex-husband Stephen Fortier, and their restaurants, including Pasta La Vista, Inc. (“Pazza Notte”) and Pazza Notte Columbus, LLC (“Loft”). Several promissory notes were executed by the corporate restaurants in favor of defendant Youmans. Ultimately, defendant Youmans initiated a lawsuit against plaintiff’s husband Fortier in 2008 alleging breach of fiduciary duty and seeking the amount owed. Tove Hansen-Nord, Pazza Notte, and Fortier entered into a settlement agreement with Youmans dated June 5, 2008, as amended on June 27, 2008. Plaintiff Nord further executed a personal guaranty on June 13, 2008. Plaintiff now alleges, inter alia, fraudulent inducement in order to set aside that settlement agreement.”

“The crux of plaintiffs complaint stems from her assertion that “defendants Meister, Cohen, Federman and McAnneny lent active assistance to Youmans both in fraudulently inducing the settlement agreement, consulting agreements and Nord guaranty, and in the years which followed during which Pazza Notte was fleeced by these defendants and they each actively induced plaintiffs to make payments that Youmans was not entitled to.” (Second Am. Compl. at if 142). The settlement agreement is dated June 5, 2008, as amended on June 27, 2008. The consulting agreement is dated June 17, 2008. Applicable Statutes of Limitations Under the law of New York the claims herein for fraud, aiding and abetting, fraud, fraudulent inducement and unjust enrichment are subject to a six year statute of limitations (CPLR §213( I) and (8); Standard Realty Associates, Inc. v. Chelsea Gardens Corp .. 105 A.D.3d 510, 964 N.Y.S.2d 94 [I st Dept 2013] (six year statute oflimitations applies to a claim for unjust enrichment); Pike v. New York Life Insurance Co., 72 A.D.3d 1043 [2d Dept 20 IO] (six year statute of limitations applies to a claim of fraudulent inducement); CSAM Capital, Inc. v. Lauder, 67 A.D.3d 149 [1st Dept 2009] (six year statute of limitations applies to a claim for aiding and abetting fraud); Avalon, LLC v. Derfner & Mahler, LLP, 16 A.D.3d 209 [1st Dept 2005] (six year statute of limitations applies to claim of fraud.  A cause of action for breach of fiduciary, as herein, which seeks a monetary remedy, 4 [* 4] is subject to a three year statute oflimitations); CPLR 214(4); IDT Corp. v. Morgan Stanley Dean Witter & Co .. 12 N.Y.3d 132 [2009]). ”

“Likewise, plaintiff alleges that the continuous representation doctrine applies to defendants MSF and Cohen. The continuous representation doctrine tolls the statute of limitations only where there is a mutual understanding of the need for further representation on the specific subject matter. (McCoy v Feinman, 99 NY2d 295, 306 [2002]). However, the continuous representation doctrine only applies to legal malpractice claims. The First Department has explicitly held that when the continuous representation doctrine is available “the tolling it allows only applies to the specific matter out of which the malpractice claim arises” (Johnson v Proskauer Rose LLP, 2015 NY Slip Op 03626 [1st Dept Apr. 30, 2015]). 8  Here, plaintiff has not asserted a legal malpractice claim against defendants MSF and Cohen. Thus, the continuous representation doctrine is inapplicable herein. ”