New York, and especially Manhattan are breeders for real estate legal malpractice litigation. High value real estate transactions, and the variety/complexity of those transactions inevitably lead to legal malpractice cases, each with its own very high value. 35 W. 26th St. Realty, LLC v Norris, McLaughlin, & Marcus, P.C. 2023 NY Slip Op 31851(U) June 2, 2023 Supreme Court, New York County Docket Number: Index No. 155004/2022 Judge: Lori S. Sattler is a fine example.

“Plaintiff 35 West 26th Street Realty, LLC (“Plaintiff”) is a real estate company that owns
a five-story building located at that address (“the building”) with a sole owner and officer, Osman Bessa. It seeks to recover damages purportedly caused by Defendants’ negligent representation in an administrative proceeding before the New York Loft Board. Nonparty Norris McLaughlin is a law firm and Proefriedt is an attorney there.
Plaintiff purchased the building in 2002. At the time, the building had been subject to the Loft Law and the Loft Board’s jurisdiction for nearly 20 years. As set forth in the papers, the In 1985, a tenant harassment finding was issued against a previous owner of the building concerning, inter alia, conditions in the building’s second and fifth floor units. The tenant harassment finding remained in effect at the time Plaintiff purchased the building, although Bessa contends he was unaware of it.

Plaintiff alleges that it retained Defendants in 2007 to remove the building from the Loft
Board’s jurisdiction and deregulate its units. It maintains that Proefriedt was held out by Norris McLaughlin as having “considerable experience in matters related to the Loft Board” and that Proefriedt had represented the building’s previous owner (NYSCEF Doc. No. 8, Complaint ¶¶ 24-26). According to Plaintiff, at Proefriedt’s recommendation, it bought out the tenants of the second floor and fifth floor units in 2007 and 2014 respectively. Plaintiff maintains these purchases were made so that the units could be deregulated and rented at the prevailing market rate pursuant to Section 286(12) of the Loft Law. To that end, Bessa allegedly executed sale of rights records under the Loft Law on behalf of Plaintiff at Proefriedt’s instruction. Proefriedt then filed these forms with the Loft Board on June 15, 2016.”

““A legal malpractice claim accrues ‘when all the facts necessary to the cause of action
have occurred and an injured party can obtain relief in court’” (McCoy v Feinman, 99 NY2d 295, 301 [2002], quoting Ackerman v Price Waterhouse, 84 NY2d 535, 541 [1994]). “In most cases, this accrual time is measured from the day an actionable injury occurs, even if the aggrieved party is ignorant of the wrong or injury” (id. [citation omitted]). An actionable injury has been found to have occurred when a plaintiff’s damages become “sufficiently calculable to permit [the] plaintiff to obtain prompt judicial redress” (id. at 306; see also Flintlock Constr. Servs., LLC v Rubin, Fiorella & Friedman, LLP, 188 AD3d 530, 531 [1st Dept 2020], quoting McCoy, 99 NY2d at 301, citing King Tower Realty Corp. v G & G Funding Corp., 163 AD3d 541 [2d Dept 2018]).

Defendant meets its prima facie burden of showing that the statute of limitations for
malpractice expired before Plaintiff commenced this action. It annexes to its moving papers a copy of the June 24, 2016 Loft Board letter to Plaintiff stating that the harassment finding remained in place and the second and fifth floor units were still subject to rent regulation under the Loft Law (NYSCEF Doc. No. 9). It also submits a January 25, 2017 invoice sent to Bessa by Norris McLaughlin for Proefriedt’s legal services containing an entry for November 16, 2016 that states “Finalize application” (NYSCEF Doc. No. 10). These documents establish, prima facie, that any purported malpractice in failing to apply for a termination of the harassment finding took place in 2016 when the applications were submitted and that any future attempts to raise the units’ rents to fair market value would fail unless the harassment finding was removed.

Plaintiff fails to aver any evidentiary facts indicating that the statute of limitations had not expired at the time it commenced this action or that otherwise create a question of fact as to whether this action was timely (see MTGLQ Invs., LP, 172 AD3d at 644). It annexes to its opposition an affidavit from Bessa and copies of emails between Bessa and Proefriedt from June and July 2016 (NYSCEF Doc. Nos. 15, 17-18). The affidavit, which merely reiterates Plaintiff’s argument that Bessa was unaware of the June 24, 2016 Loft Board letter, only asserts that Bessa believed Proefriedt “learned about the determination in the summer of 2016” and “likely delayed” the final application to the Loft Board by several months to cover up his failure to have the harassment finding terminated (Bessa aff ¶¶ 19, 25). Neither these speculatory assertions nor
the 2016 emails between Bessa and Proefriedt create an issue of fact as to whether Plaintiff’s alleged damages only became ascertainable in October 2019 or the malpractice cause of action otherwise accrued at a later date. The Court therefore finds that the statute of limitations accrued on August 8, 2019.

Plaintiff also fails to create an issue of fact as to whether the statute of limitations was
tolled because it was continuously represented by Defendants between the 2016 removal application filings and the 2019 Loft Board final order. Under the continuous representation doctrine, the statute of limitations for legal malpractice is tolled “only where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim” (McCoy, 99 NY2d at 306; Shumsky v Eisenstein, 96 NY2d 164, 168 [2001]). The continuous representation toll ends upon the conclusion of the matter or upon the attorney’s withdrawal from representation (see Shumsky, 96 NY2d at 170-171; Williamson ex rel. Lipper
Convertibles, L.P. v PricewaterhouseCoopers LLP, 9 NY3d 1, 9-1). An attorney’s withdrawal can be inferred where, for instance, the attorney ceases to respond to the plaintiff’s attempts at communication (cf. Shumsky, 96 NY2d at 170-171; Champlin v Pellegrin, 111 AD3d 411 [1st Dept 2013] [13-year gap in communication put plaintiff on notice that representation had terminated]).”