Golub v Shalik, Morris & Co., LLP  2018 NY Slip Op 32358(U)  September 21, 2018  Supreme Court, New York County  Docket Number: 158055/2017  Judge: Barbara Jaffe presents a difficult analysis of the statute of limitations. When it commences and whether continuing representation tolls the statute are the cornerstones of this opinion.

“On August 16, 2012, ARG transferred his 50 percent interest in a property in Southampton, New York, as a gift to The Aaron Richard Golub 2012 Qualified Personal Residence Trust (QPRT). As of August 27, 2012, the property as a whole was appraised at $9 million. In reporting the value of the gift as one-half the appraised value, defendants erred as the 50 percent interest was “hon-controlling” and not easily sold. Defendants also failed to observe that the correct value of the gift should have been the remainder interest after the expiration of the QPRT, not the gross value of the non-controlling interest. These errors resulted in the gift being “overreported” and the expenditure of too much of AR G’s lifetime gift tax exemption.

Defendants also incorrectly prepared and filed the 2012 Form 709 by reporting that the recipient was plaintiff Darrow Golub (DG) instead of the QPRT. As a result, the gift was also “under-reported” by $13,000 due to defendants’ erroneous application of the annual gift tax exclusion to the gift which does not qualify for it. The basis of the gift was also incorrectly reported as $4.5 million, which will result in an inaccurately high figure for purposes of calculating capital gain or loss.”

“Apart from ARG’s self-serving and unsupported allegations, plaintiffs offer no clear indicia of an ongoing, continuous, developing, and dependent relationship between the parties such that absent other circumstances, defendants’ representation was continuous with respect to the QPRT. WFS’s website, containing a general description of services rendered does not constitute an agreement between the parties, and the assurance of the SM partner that he would continue to provide the same accounting services performed by Frushtick is not sufficiently
specific to satisfy the legal requirements for proving continuous representation as to the
underlying malpractice relating to the QPRT. That defendants offer no affidavit is of no moment
as it is plaintiffs’ burden to demonstrate continuous representation. (See Davis v Cohen &
Gresser LLP, 160 AD3d 484 [l51 Dept2018] [plaintiff bears burden of showing that statute of
limitations has been tolled or does not apply]).

However, as it is undisputed that a 2014 Form 709 was required for the QPRT to achieve its purpose and that the errors in the 2012 Form 709 were not discovered until 2016, it was reasonably expected that until the termination of their services, defendants would follow through with the filing of a 2014 Form 709. This reasonable expectation reflects both a mutual understanding of the need for further representation with respect to the QPRT and plaintiffs’ reliance upon a continuous course of services related thereto. That defendants failed to file the 2014 Form 709, that they were not asked to do so, or that the alleged errors in the 2012 Form 709 precluded the filing of a 2014 Form 709 does not disprove the mutual understanding absent any offer of proof from defendants and given Harris’s assertion that the duty to file a 2014 Form 709 is implicit in the filing of the 2012 Form 709. Thus, plaintiffs satisfy their burden of demonstrating a factual issue as to whether defendants continuously represented them with respect to the QPRT. To accept defendants’ argument that they are shielded from liability by their own negligence would be inequitable at this stage of the proceedings. (Cf Deitz vKelleher & Flink, 232 AD2d 943 [3d Dept 1996] [defendant cannot use own negligence to shield itself from malpractice]). “

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Andrew Lavoott Bluestone

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened…

Andrew Lavoott Bluestone has been an attorney for 40 years, with a career that spans criminal prosecution, civil litigation and appellate litigation. Mr. Bluestone became an Assistant District Attorney in Kings County in 1978, entered private practice in 1984 and in 1989 opened his private law office and took his first legal malpractice case.

Since 1989, Bluestone has become a leader in the New York Plaintiff’s Legal Malpractice bar, handling a wide array of plaintiff’s legal malpractice cases arising from catastrophic personal injury, contracts, patents, commercial litigation, securities, matrimonial and custody issues, medical malpractice, insurance, product liability, real estate, landlord-tenant, foreclosures and has defended attorneys in a limited number of legal malpractice cases.

Bluestone also took an academic role in field, publishing the New York Attorney Malpractice Report from 2002-2004.  He started the “New York Attorney Malpractice Blog” in 2004, where he has published more than 4500 entries.

Mr. Bluestone has written 38 scholarly peer-reviewed articles concerning legal malpractice, many in the Outside Counsel column of the New York Law Journal. He has appeared as an Expert witness in multiple legal malpractice litigations.

Mr. Bluestone is an adjunct professor of law at St. John’s University College of Law, teaching Legal Malpractice.  Mr. Bluestone has argued legal malpractice cases in the Second Circuit, in the New York State Court of Appeals, each of the four New York Appellate Divisions, in all four of  the U.S. District Courts of New York and in Supreme Courts all over the state.  He has also been admitted pro haec vice in the states of Connecticut, New Jersey and Florida and was formally admitted to the US District Court of Connecticut and to its Bankruptcy Court all for legal malpractice matters. He has been retained by U.S. Trustees in legal malpractice cases from Bankruptcy Courts, and has represented municipalities, insurance companies, hedge funds, communications companies and international manufacturing firms. Mr. Bluestone regularly lectures in CLEs on legal malpractice.

Based upon his professional experience Bluestone was named a Diplomate and was Board Certified by the American Board of Professional Liability Attorneys in 2008 in Legal Malpractice. He remains Board Certified.  He was admitted to The Best Lawyers in America from 2012-2019.  He has been featured in Who’s Who in Law since 1993.

In the last years, Mr. Bluestone has been featured for two particularly noteworthy legal malpractice cases.  The first was a settlement of an $11.9 million dollar default legal malpractice case of Yeo v. Kasowitz, Benson, Torres & Friedman which was reported in the NYLJ on August 15, 2016. Most recently, Mr. Bluestone obtained a rare plaintiff’s verdict in a legal malpractice case on behalf of the City of White Plains v. Joseph Maria, reported in the NYLJ on February 14, 2017. It was the sole legal malpractice jury verdict in the State of New York for 2017.

Bluestone has been at the forefront of the development of legal malpractice principles and has contributed case law decisions, writing and lecturing which have been recognized by his peers.  He is regularly mentioned in academic writing, and his past cases are often cited in current legal malpractice decisions. He is recognized for his ample writings on Judiciary Law § 487, a 850 year old statute deriving from England which relates to attorney deceit.