Davis v Cohen & Gresser LLP  2016 NY Slip Op 50417(U)  Decided on March 24, 2016
Supreme Court, New York County  Ramos, J. presents a most complicated intertwined issue of tolling, statutes of limitation, successor-attorney problem, onset of statute issues, along with the Mental Health Law and guardianships.

The simple story is that Plaintiff became a judgment creditor or decedent after a fraudster tricked decedent and his companies into loaning millions, only to lose it.  Plaintiff obtained the judgment based upon guarantees, went after the fraudster, and then the entire case was lost.

The facts are too complicated to summarize in a blog entry.  The take away is that in legal malpractice, every element of every cause of action must be analyzed to determine whether it is timely, whether there are “but for” problems, and which of the attorneys might be liable.

As a small taste, we present the following:

“An action to recover damages arising from an attorney’s malpractice must be commenced within three years from accrual. A legal malpractice claim accrues when all facts necessary to the cause of action have occurred and an injured party can obtain relief in court (CPLR 214 [6]; McCoy v Feinman, 99 NY2d 295, 300-01 [2002]).

The death of a client severs the attorney-client relationship (Pace v Raisman & Assoc., Esq., LLP, 95 AD3d 1185 [2d Dept 2012]). Thus, a legal malpractice claim commenced more than three years after the client’s death is untimely as a matter of law (Id.). CRA died on March 9, 2011, and thus, the latest time that the malpractice claim could have accrued is at that time, which is more than three years before the instant action was commenced, on August 12, 2014. Because CG has demonstrated that the claim is untimely, the burden shifts to plaintiff to establish an exception to the applicable statute of limitations period (TIAA Global Invs., LLC v One Astoria Sq. LLC, 127 AD3d 75, 97-98 [1st Dept 2015]).

Plaintiff unpersuasively argues that the continuous representation doctrine tolls the limitations period. The “toll ceases to be operative when the representation in the particular matter comes to an end” (Alexander, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C214.6, at 168 [2003 ed]). As stated supra, the death of CRA in March 2011 severed the attorney-client relationship with CG and thus, the doctrine of continuous representation cannot apply.

Moreover, application of the doctrine of continuous representation is limited to those situations where the attorney continues to represent the client in the same matter in which the malpractice occurred, and the parties had a “mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim” (McCoy, 99 NY2d at 305-06).

Plaintiff’s allegations that CG led Luke to believe that it was representing the estate in the RICO action is belied by the relevant retainer agreements and court dockets from the time period at issue. The retainer agreements amongst the parties show that CG represented CRA, by Luke as his guardian, in the RICO case before CRA’s death. The 2008 retainer agreement was between CG and Luke, as CRA’s guardian; Luke’s authority as guardian expired at CRA’s death (see discussion below). After CRA’s death, CG represented the estate in the Excelsior action, and CG represented the estate in connection with the federal investigation of Devine pursuant to the 2011 retainer agreement. In the 2011 retainer agreement (which pertains to the federal investigation of Devine), it specifically states that the engagement of CG “does not encompass, nor does it engage the Firm to represent [Grace, CRA’s executrix] or the Estate of [CRA] in any matter not specifically described herein” (Exhibit I, annexed to the Stanley Aff.).

CG’s only role in the RICO action following CRA’s death was to represent Luke in his individual capacity as a third party defendant (Exhibit A, annexed to the Stanley Aff.). On March 17, 2011, CG filed a Suggestion of Death Upon the Record in the RICO [*4]action as the “Former Attorneys for C. Robert Allen, III” (emphasis added). On June 15, 2011 (the same date that the estate entered into the 2011 retainer agreement with CG with respect to the federal Devine investigation), the estate, represented by Reed P. Whitemore, Esq., moved to be substituted as plaintiff in the RICO action (Exhibit D, annexed to the Stanley Aff.). In December 2011 and April 2012, Farrell Fritz, P.C. and Camplo, Middleton & McCormick, L.L.P. also appeared on the estate’s behalf in the RICO action (Exhibit A, annexed to the Stanley Aff.). CG never formally appeared in the RICO action on behalf of the estate following CRA’s death. To the extent that the 2008 retainer agreement articulated a broader scope of representation on CG’s part and on CRA’s behalf, this representation ended at CRA’s death, in March 2011.”