Manhattan real estate is a steady source of legal malpractice cases. It sometimes seems that there are too few clients, as conflict of interest claims often accompany the legal malpractice claims. Here, too, defendant is accused of having too many clients in187 St. Mazal Manager, LLC v Herrick Feinstein LLP 2019 NY Slip Op 32305(U) July 29, 2019 Supreme Court, New York County Docket Number: 158840/2018 Judge: O. Peter Sherwood.
“In 2011, Ben Ari introduced plaintiffs and their affiliates (together, the HAP Entities) to
possible investment properties, which opportunity the Hap Entities decided to pursue. Their
intention was to purchase the property, clear it, and build an apartment building (the Project).
Herrick was hired, pursuant to a retainer agreement, to represent the HAP Entities in the
development of the Project. The agreement set out how Herrick would be paid. Ben Ari was to
perform the day to day services provided by Herrick under the supervision of Levine.
On September 24, 2012, Manager entered into a purchase and sale agreement to purchase
certain properties for $5 million. Manager also obtained assignments from non-party entities of the right to purchase additional parcels of land.
Plaintiffs allege defendants knew of irregularities in the title of certain of the properties
(284 Wadsworth Ave, and 655, 657, 661, 663, and 667 West 187th Street, together, the Demurjian Properties). In November 2011, defendant received a title report from First American Title Insurance Company (the First American Report) which identified some issues with the chains of title, including decades-long delays between transfer of the deed and its recording, potentially improper transfers, gaps in the chain of title, and so on. Defendants were aware of the First American Report and gave a copy to Michael Demurjian (seller of the Demurjian Properties), but never shared it with plaintiffs or advised plaintiffs of the issues with title to the Demurjian Properties or counseled them not to pursue those properties. In fact, defendants concealed the issues with title, finding Boston National Title Agency, LLC (Boston National), which would insure title of all of the properties. Boston National did no investigation. Defendants also failed to reveal Demurjian was a Herrick client and that Levine was an investor in at least one of his businesses.
Subsequent litigation regarding the Demurjian Properties has prevented plaintiffs from
realizing the Project and raised the question of whether plaintiffs ever acquired a valid interest in certain parcels.”
“The parties agree the three-year statute of limitations applies to the malpractice claims.
Plaintiffs argue the period was tolled based on the continuous representation doctrine.
“Application of the continuous representation or treatment doctrine is … generally limited to the course of representation concerning a specific legal matter or of treatment of a specific ailment or complaint; the concern, of course, is whether there has been continuous treatment, and not merely a continuing relation between physician and patient. Thus, the doctrine is not applicable to a client’s or patient’s continuing general relationship with a lawyer or physician involving only routine contact for miscellaneous legal representation or medical care, unrelated to the matter upon which the allegations of malpractice are predicated. Instead, in the context of a legal malpractice action, the continuous representation doctrine tolls the Statute of Limitations only where the continuing
representation pertains specifically to the matter in which the attorney committed the alleged
malpractice” (Shumsky v Eisenstein, 96 NY2d 164, 167-68  [internal citations omitted]). Here, plaintiffs base their argument entirely on the existence of the retainer agreement with Herrick, which had not been terminated. Plaintiffs do not allege any of the defendants provided any legal services after the September 24, 2012, sale agreement. However, the retainer expressly provides for Herrick to perform a long list of services in connection with the Project. Most of those services have yet to be performed (NYSCEF Doc. No. 22). Because on a motion to dismiss, the court must accord the plaintiff “the benefit of every possible favorable inference” (Rovello v Orofino Realty Co., 40 NY 2d 633, 634 ) and deny the motion where the documentary evidence does not “utterly refute” the claim (McCully v Jersey Partners, Inc., 60 AD 3d 562 [1st Dept 2009]), plaintiffs’ claim of continuous representation by Herrick survives and defendants’ statute of limitations defense fails (see Red Zone LLC v Caldwalader, Wickersham & Taft LLC, 27 NY 3d 1048, 1050 ). The case may not be dismissed pursuant to CPLR 3211 (a)(5). “