Centre Lane Partners, LLC v Skadden, Arps, Slate, Meagher, & Flom LLP 2017 NY Slip Op 07221 Decided on October 17, 2017 Appellate Division, First Department illustrates two rules. One of the rules is the borrowing statute, and the second is one that is both out-of-state and foreign to NY jurisprudence.
The borrowing statute, in appropriate circumstances, applies the statute of limitations of a foreign state to a NY case. Here is is applied to the detriment of Plaintiff.
In NY a legal malpractice action is deemed to commence at the time of the mistake, not at the time of its discovery. Oregon has a different statute, but in this case, it was deemed not to apply in plaintiff’s favor.
“Where the alleged injury is economic in nature, the cause of action is generally deemed to accrue in the state “where the plaintiff resides and sustains the economic impact of the loss” (Global Fin. Corp. v Triarc Corp., 93 NY2d 525, 529 ; see Kat House Prods., LLC v Paul, Hastings, Janofsky & Walker, LLP, 71 AD3d 580 [1st Dept 2010]). Here, the debtors’ principal places of business are in Oregon, and their financial losses were allegedly incurred in that state. Contrary to plaintiffs’ claim, the motion court’s application of Oregon’s two-year statute of limitations via New York’s borrowing statute (CPLR 202) in light of, inter alia, the situs of debtors’ Oregon-based businesses, the legal relationships existing between plaintiffs, debtors and defendants, and the nature of the instant action, was proper and the result would not be “absurd,” notwithstanding defendants’ place of business being located in New York (Insurance Co. of N. Am. v ABB Power Generation, 91 NY2d 180, 186 ; see 2138747 Ontario, Inc. v Samsung C & T Corp., 144 AD3d 122 [1st Dept 2016]).”
“Given such factual pleadings, the motion court properly rejected plaintiffs’ argument that [*2]Oregon’s discovery/tolling rule for legal malpractice claims rendered this malpractice action timely commenced. The court properly concluded that a reasonable person, knowing the facts that the debtors had available to them at the time of the two challenged transfers, should have been aware of a substantial possibility of defendants’ conflicted representation, as well as the harm that such negligent representation had caused, and such knowledge could not have been gained later than when the debtors filed for Chapter 7 bankruptcy on December 31, 2013 (see Kaseberg v Davis Wright Tremaine, LLP, 351 Ore 270, 277-278, 265 P3d 777, 781-782 ).”