An elderly couple sells some real estate and want to insulate the proceeds for estate planning purposes, specifically Medicare planning. They have to make the transaction such that they keep the proceeds and shield them from a 5 year look-back review by Medicare. As a reader of this blog, you surmise that something goes wrong. Some years later they are told that the proceeds have not been shielded. Is it too late to sue the attorneys? In sum, yes.
Judge Freed, in Bonin v Wells, Jaworski & Liebman, LLP 2017 NY Slip Op 32097(U)
October 4, 2017 Supreme Court, New York County Docket Number: 153167/2016 tells us that the time has expired.
“The legal malpractice claim is not timely asserted. An action to recover for attorney malpractice is governed by a three-year statute of limitations, regardless of whether the underlying theory is based on contract or tort (McCoy v Feinman, 99 NY2d 295, 301 ; see CPLR 214 ). The three-year limitations period accrues “when the malpractice is committed, not when the client discovers it” (Williamson v Price WaterhouseCoopers LLP, 9 NY3d 1, 7-8 ). This is true even where the plaintiff is unaware of any malpractice, damages, or injury (McCoy v Feinman, 99 NY2d at 300- 301). For statute of limitations purposes, plaintiffs legal malpractice claim accrued no later than July 2008, when the Trust was fully funded. A legal malpractice claim accrues when the alleged injury to the client occurs, such as when the trust agreement was funded, regardless of the client’s awareness of the malpractice (Johnson v Proskauer Rose LLP, 129 AD3d 59, 67 [Pt Dept 2015]; Pace v Raisman & Assoc. Esqs., LLP, 95 AD3d 1185, 1187-1188 [2d Dept 2012]). Therefore, the legal malpractice claim should have been asserted no later than July 2011 for it to have been timely commenced. However, plaintiff commenced this action on April 13, 2016, almost five years after expiration of the limitations period. Contrary to plaintiffs argument, the continuous representation doctrine is not applicable here because, once the Trust was funded, the attorney/client relationship between the Bonins and defendants ended. ”
“To toll the legal malpractice limitations period on a theory of continuous representation, the plaintiff must establish that there existed a mutual understanding between the attorney and client of the need for further representation on the specific subject matter underlying the malpractice alleged; a clear indication of an ongoing, continuous, developing, and dependent relationship between them pertaining specifically to the representation from which the alleged malpractice stems, that is not sporadic or intermittent; and a continuing relationship of trust and confidence between the attorney and the client (Matter of Merker, 18 AD3d 332, 332-333 [1st Dept 2005]).”
“Plaintiff has failed to plead any facts that suggest the existence of a continuing attorney/client relationship between defendants and herself. After the funding of the Trust in July 2008, no contact regarding the trust agreement is alleged to have occurred between the Bonins and defendants, until the Trustee’s letter dated March 6, 2013, almost five years after the funding of the Trust and 11/i years after the expiration of the statutory limitations period. For purposes of the statute of limitations, an attorney/client relationship cannot be revived after the limitations period has expired (see Droz v Karl, 736 F Supp 2d at 527 [applying New York law]; Maurice W Pomfrey & Assoc., Ltd. v Hancock & Estabrook,50 AD3d 1531, 1533 [4th Dept 2008]). Therefore, the correspondence exchanged by the parties in 2013 does not constitute evidence of a continuing relationship, and cannot revive the relationship. Defendants’ reassurances that the Trust was properly created do not demonstrate the existence of a continuous representation. Repeated assurances by attorneys that they provided accurate advice and that they did nothing wrong do not constitute continuous representation, particularly where there exists no mutual understanding to maintain a professional relationship (Arnold v KPMG LLP, 543 F Supp 2d 230, 236 [SD NY 2008], affd334 Fed Appx 349 [2d Cir], cert denied 558 US 901  [applying New York law]).”