There are a whole group of social policy roadblocks to legal malpractice litigation.  The additional element of “but for” causation is one; the requirement of privity is another; the exemption for strategic decisions is a third.  A very black and white limitation is that of legal malpractice by a criminal defense lawyer.  Put in short, it is required that the client be acquitted, have the conviction reversed on appeal or be exonerated before a legal malpractice suit may be brought.

This is the short lesson of Braxton v Segal  2018 NY Slip Op 50393(U)  Decided on March 26, 2018  Supreme Court, New York County  Reed, J. in which a pro-se claimant has the complaint dismissed.

“With regard to plaintiff’s motion for summary judgment as to Segal, “to state a cause of action for legal malpractice arising from negligent representation in a criminal proceeding, plaintiff must allege his innocence or a colorable claim of innocence of the underlying offense” (see Carmel v. Lunney, 70 NY2d 169). Plaintiff has not done so here. Instead, plaintiff alleges that Segal’s prior complaints, admonishments and suspensions from the practice are conclusive proof of malpractice in his case, entitling plaintiff to monetary relief. Such a clustering of unfortunate facts, however, does not translate into an articulable claim of legal malpractice. Segal was, it is true, suspended from the practice of law during the representation of plaintiff’s case. The Appellate Division of the First Judicial Department ordered Segal to transfer his cases to another attorney in good standing. While it certainly is an inconvenient and untimely disruption for any criminal defendant to receive a new attorney, this alone is not sufficient to sustain a cause of action for legal malpractice. Accordingly, plaintiff’s motion for summary judgment as against Segal is denied. Moreover, again searching the record pursuant to CPLR 3212(b), the court grants summary judgment to defendant Segal dismissing the complaint as against him — inasmuch as plaintiff fails to present anywhere in the record even a colorable claim of innocence in connection with the criminal matter for which defendant Segal provided him representation (see Carmel v. Lunney, supra; Merritt Hill Vineyards, supra).”

Court appoints a jewelry appraiser as a neutral, and the neutral then send retainer agreements to the parties.  Only one party signs the retainer agreement.  Appraiser then renders report which one party disputes.  Can there be a professional negligence claim?

Lintz v Aretz  2018 NY Slip Op 30455(U)  March 12, 2018  Supreme Court, New York County
Docket Number: 651766/2015  Judge: Barbara Jaffe says “no.”

“A party asserting a claim for professional malpractice or negligence must establish the
existence of a contractual .relationship or a bond between it and the professional that is the
functional equivalent of contractual privity. (Bullmore v Ernst & Young Cayman Is., 45 AD3d
461 [1st Dept 2007]). A relationship that constitutes the functional equivalent of contractual privity is one where there is: (1) awareness that information will be used for a particular purpose;
(2) reliance by a party in furtherance of that purpose; and (3) some conduct by the other party
linking them to the party and indicating their understanding of their reliance. (Ossining Union
Free School Dist. v Anderson LaRocca Anderson, 73 NY2d 417 [ 1989]).
Moreover, to the extent that a claim for negligent appraisal may be deemed one for
negligent misrepresentation, the party asserting the negligence must establish both reliance and
the existence of a special relationship between it and other party. (See e.g., Ravenna v Christie’s
Inc., 289 AD2d 15 [1st Dept 2001] [where plaintiff brought negligent misrepresentation claim
based on allegation that art specialist gave him wrong information about artwork’s origin,
causing damage, claim dismissed as no special relationship existed between them,
notwithstanding specialist’s awareness that plaintiff would rely on advice]).
Having inconsistently alleged that Aretz was both court-appointed and improperly
retained only by her husband and that only her husband was Aretz’s client, plaintiff thereby
demonstrates: 1) that there was no contractual relationship or its functional equivalent between
her and Aretz; and 2) that neither she nor her husband had either a special relationship or one ·
constituting the functional equivalent of privity with Aretz, as Aretz’s duty was to the court
rather than to either litigant. While she alleges that defendants failed to provide her with the
retainer agreement, thereby thwarting her from signing it and establishing a special relationship,
defendants prove that a copy of the agreement was faxed both to her and to her divorce attorney.
Thus, plaintiffs mere denial of receipt raises no triable issue of fact as to whether there was or
should have been a contractual relationship between her and defendants. To the extent she now
disputes the appointment, she does so in a fatally conclusory fashion, and fails to explain the
contrary allegation in her complaint.

There is also no evidence that plaintiff was unable to hire her own appraiser or that,
having received Aretz’s appraisal before the trial, she could not verify it before it was offered at
trial. And, while plaintiff alleges that Aretz’s retainer agreement with her husband violated his
ethical or expert duty to act as a neutral evaluator, that fact alone is insufficient to hold him
liable. (See e.g., Cohen v Kachroo, 115 AD3d 512 [l51 Dept 2014] [violation of rules of
professional conduct or ethical rules, in and of itself, does not constitute malpractice]).”

Judiciary Law §487 is an ancient part of the common law, so old that it was enacted merely 30 years after the Magna Carta.  That’s old!  Here, in Ehrenkranz v 58 MHR, LLC  2018 NY Slip Op 01902    Decided on March 21, 2018 Appellate Division, Second Department applied its version of JL 487 (which differs from the First Department’s version) and found that while there may have been some confusion, there was no intent to deceive.

“The Supreme Court properly granted that branch of LePatner’s motion which was to dismiss the 16th cause of action in the third-party complaint, although the dismissal should have been pursuant to CPLR 3211(a)(7) and not CPLR 3211(a)(1) (see Smalls v St. John’s Episcopal Hosp., 152 AD3d 629). Accepting the facts alleged in the third-party complaint as true, and according the third-party plaintiffs the benefit of every favorable inference (see Leon v Martinez, 84 NY2d 83, 88; Raach v SLSJET Mgt. Corp., 134 AD3d 792, 793), the third-party complaint failed to allege facts sufficient to find that LePatner acted “with intent to deceive the court or any party” (Judiciary Law § 487; see Klein v Rieff, 135 AD3d 910; Savitt v Greenberg Traurig, LLP, 126 AD3d 506; Fleyshman v Suckle & Schlesinger, PLLC, 91 AD3d 591, 592-593).”

We’ve discussed other statute of limitations cases this week, and Roubeni v Dechert, LLP  2018 NY Slip Op 01950  Decided on March 21, 2018
Appellate Division, Second Department is an excellent example of what is really the only way around the iron-clad rule that the statute of limitations in legal malpractice commences at the mistake and not when the damage is discovered.  It is the McCoy v. Feinman, 99 NY2d 295 (2002)  – Ackerman v. Price Waterhouse  84 NY2d 714 (2002)argument that “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.”  It works about 2% of the time.  Here it fails, with little commentary by the AD.

“Here, the defendants satisfied their initial burden by demonstrating that this legal malpractice action accrued, at the latest, when the bankruptcy proceeding was terminated in October 2006, which was more than three years before the commencement of this action (see Stein Indus., Inc. v Certilman Balin Adler & Hyman, LLP, 149 AD3d at 789; Tsafatinos v Law Off. of Sanford F. Young, P.C., 121 AD3d 969, 969). In opposition, the plaintiffs failed to raise a question of fact as to whether the continuous representation doctrine tolled the running of the statute of limitations (see Stein Indus., Inc. v Certilman Balin Adler & Hyman, LLP, 149 AD3d at 789; Quinn v McCabe, Collins, McGeough & Fowler, LLP, 138 AD3d 1085, 1087).”

Genet v Buzin  2018 NY Slip Op 01878  Decided on March 20, 2018  Appellate Division, First Department is an example of a pro-se legal malpractice case wiped off the board.  In a short decision, which gives few clues, the AD affirmed in about the shortest way possible.

“Order, same court and Justice, entered January 20, 2017, which, insofar as appealed from as limited by the briefs, denied plaintiffs’ motion to renew so much of defendants’ motion to dismiss as was based on lack of personal jurisdiction, and for leave to serve an amended complaint, unanimously affirmed, without costs.

Plaintiffs’ proposed amendment is “palpably insufficient” (MBIA Ins. Corp. v Greystone & Co., Inc., 74 AD3d 499, 499 [1st Dept 2010]). The allegations underlying the legal malpractice claim merely “reflect plaintiff[s’] dissatisfaction with defendants’ strategic choices and tactics; there is no showing that those choices and tactics were unreasonable” (Kassel v Donohue, 127 AD3d 674, 674 [1st Dept 2015], lv dismissed 26 NY3d 940 [2015]; see also Rosner v Paley, 65 NY2d 736, 738 [1985]).”

The statute of limitations, as we have commented recently, is a social policy which seeks to limit the backlog of potential claims now sitting in virtual warehouses around the nation.  You’ve been harmed, and that harm is actionable.  Society has decided that certainty of business and personal life requires that such claims be brought, or after a certain period, just abandoned.  So it is, and the statute is very powerful.  There are exceptions such as the “continuing wrong” doctrine discussed in Palmeri v Willkie Farr & Gallagher LLP   2017 NY Slip Op 05794 [152 AD3d 457]  July 25, 2017  Appellate Division, First Department.

“In the complaint in this action, dated February 15, 2013, plaintiff asserted causes of action against defendant for breach of fiduciary duty, aiding and abetting breach of fiduciary duty, gross negligence, professional negligence, breach of contract, and breach of the implied covenant of good faith and fair dealing. Plaintiff alleged that defendant, during its representation of Ramius in the FINRA investigation, shifted all responsibility for any alleged violations of FINRA’s rules to him, suggesting that plaintiff undertook certain wrongful actions without Ramius’s knowledge. Plaintiff further asserted that defendant disclosed to FINRA his internal, privileged communications with Ramius’s counsel, thus causing FINRA to assert charges against Palmieri. Moreover, plaintiff alleged that defendant disclosed information that it had learned during the time it represented him. Plaintiff also alleged that the FINRA complaint was primarily based on privileged statements he had made to counsel at Ramius, and that these statements were also disclosed during the course of Willkie’s representation of Ramius after it ceased representing him.”

“To begin, the motion court properly dismissed plaintiff’s claims for gross negligence, breach of contract, and breach of the implied covenant of good faith and fair dealing as duplicative of his legal malpractice claim, given that they are all based on the same facts and seek the same relief (Sun Graphics Corp. v Levy, Davis & Maher, LLP, 94 AD3d 669 [1st Dept 2012]).

Plaintiff’s claim for legal malpractice, in turn, is untimely. Claims for legal malpractice are subject to a three-year statute of limitations and accrue when the malpractice is committed, not when the client learns of it (Lincoln Place, LLC v RVP Consulting, Inc., 70 AD3d 594 [1st Dept 2010], lv denied 15 NY3d 710 [2010]; CPLR 214 [6]). Plaintiff’s legal malpractice claim first accrued on or about June 25, 2009, when defendant terminated its legal representation of him, but continued to represent Ramius in the ongoing FINRA investigation. He did not, however, file his claim until February 15, 2013, more than three years later.”

“However, the IAS court should have permitted the breach of fiduciary duty claim to proceed. The IAS court correctly noted that the claim was subject to a three-year statute of limitations. The court was mistaken, however, in finding that the allegedly wrongful conduct ended on June 25, 2009, when defendant unilaterally terminated its representation of plaintiff. On the contrary, defendant’s conduct extended through at least June 29, 2011, during which time it represented Ramius and its employees in their participation at plaintiff’s FINRA disciplinary hearing.

Here, plaintiff alleges not only that defendant breached its fiduciary duty when it terminated its professional relationship with him, but also when, until at least June 2011, it acted in a manner directly adverse to his interests. Where there is a series of continuing wrongs, the continuing wrong doctrine tolls the limitation period until the date of the commission of the last wrongful act (Harvey v Metropolitan Life Ins. Co., 34 AD3d 364 [1st Dept 2006]; see also Ring v AXA Fin., Inc., 2008 NY Slip Op 30637[U], *8 [Sup Ct, NY County 2008] [applying continuing violations doctrine to General Business Law § 349 claim where initial payments occurred outside statute of limitations but “the insurer . . . continued to bill, and . . . (plaintiff) . . . continued to pay” within three years of filing suit]).

Here, plaintiff has presented evidence of a “continuing wrong,” which is “deemed to have accrued on the date of the last wrongful act” (Leonhard v United States, 633 F2d 599, 613 [2d Cir 1980], cert denied 451 US 908 [1981]; Harvey, 34 AD3d at 364). Indeed, the record contains evidence sufficient to create an issue of fact as to whether defendant breached its fiduciary obligations to plaintiff after June 2009 and well into June 2011 during its ongoing representation of the Ramius parties.

For example, as noted, the record contains evidence that in the early portion of 2011, defendant helped Ramius identify witnesses who would testify against plaintiff at his FINRA disciplinary hearing. Similarly, defendant was present on behalf of Ramius and Ramius employees who testified at plaintiff’s FINRA hearing on June 28 through 29, 2011—a hearing at which the employees gave testimony that was generally adverse to plaintiff’s interests. This evidence is sufficient for a fact-finder to determine that defendant breached its duty of loyalty to plaintiff, a former client (see Cooke v Laidlaw Adams & Peck, 126 AD2d 453, 456 [1st Dept 1987] [ethical standards applying to the practice of law impose a continuing obligation upon lawyers to refuse employment in matters adversely affecting a client’s interests, even if the client is a former client]). Concur—Sweeny, J.P., Mazzarelli, Moskowitz and Kahn, JJ.

The statute of limitations serves to freshen and re-freshen the litigation warehouse.  Claims and potential claims are warehoused, and then sometimes brought out.  Policy considerations require that there be limits on how long a claim can be stored.  When the sue-by date arrives, the question of a statute of limitations must be decided, as in Collins Bros. Moving Corp. v Pierleoni  2017 NY Slip Op 07586 [155 AD3d 601]  November 1, 2017  Appellate Division, Second  Department.  Here the question was how far back in tax years may the accounts be held responsible?

“In seeking to assert the statute of limitations as a bar to a claim, a moving defendant bears the initial burden of demonstrating, prima facie, that the time within which to commence the cause of action has expired (see Stein Indus., Inc. v Certilman Balin Adler & Hyman, LLP, 149 AD3d 788, 789 [2017]). If the moving defendant satisfies its burden, the burden shifts to the plaintiff to raise a question of fact as to whether the statute of limitations is tolled or is otherwise inapplicable (see id.; Barry v Cadman Towers, Inc., 136 AD3d 951, 952 [2016]). A plaintiff may in some cases rely on the “continuous representation” doctrine to toll the statute of limitations (see Symbol Tech., Inc. v Deloitte & Touche, LLP, 69 AD3d 191, 194-196 [2009]). A prerequisite for the application of the continuous representation doctrine is that the relationship be continuous with respect to the matter in which the malpractice was alleged; a general professional relationship involving only routine contact is not sufficient (see Williamson v PricewaterhouseCoopers LLP, 9 NY3d 1, 9-10 [2007]; Shumsky v Eisenstein, 96 NY2d 164, 168 [2001]; Rodeo Family Enters., LLC v Matte, 99 AD3d 781, 784 [2012]). More specifically, the continuous representation doctrine “applies only where there is ‘a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim’ ” (Rodeo Family Enters., LLC v Matte, 99 AD3d at 784, quoting McCoy v Feinman, 99 NY2d 295, 306 [2002]).

Here, in opposition to the accounting defendants’ motion to bar arbitration of claims that were untimely under the three-year limitations period provided in the letter agreements, the plaintiffs did not contend that the accounting defendants had failed to meet their prima facie burden. Instead, the plaintiffs relied entirely on the continuous representation doctrine. In so doing, the plaintiffs alleged, in conclusory fashion, that “[t]he parties mutually contemplated ongoing representation following each annual review,” and that Anchin “had a continuing obligation to remedy defects in any consolidated financial statements.” The plaintiffs also submitted an affidavit of Webers, in which he averred, without any specificity, that “[r]evisions of prior years[‘] financial statements were routinely performed.” The plaintiffs’ evidence failed to raise a question of fact as to whether the limitations period contained in the letter agreements was tolled by the continuous representation doctrine (see Williamson v PricewaterhouseCoopers LLP, 9 NY3d at 9; Cusimano v Schnurr, 137 AD3d 527, 531 [2016]; cf. Stein Indus., Inc. v Certilman Balin Adler & Hyman, LLP, 149 AD3d at 790; Bronstein v Omega Constr. Group, Inc., 138 AD3d 906, 908 [2016]; Symbol Tech., Inc. v Deloitte & Touche, LLP, 69 AD3d at 196). Thus, the Supreme Court correctly determined that the continuous representation doctrine was inapplicable.

The accounting defendants failed, however, to submit any evidence that would have established which of the plaintiffs’ causes of action were untimely. The letter agreements provided [*3]for a three-year limitations period, as follows: “No action, regardless of form, arising out of the services under this agreement may be brought by either of us more than three years after the date of the last services for the year in dispute provided under this agreement.” Because the record before us does not establish the relevant “last services” dates, the determination of those dates and the consequent timeliness of the plaintiffs’ various causes of action must be made in further proceedings.”

Reading legal malpractice cases is an exercise in human sadness and unfortunate circumstance.    Okello v Schwartzapfel, P.C.  2018 NY Slip Op 30402(U)  March 12, 2018  Supreme Court, New York County  Docket Number: 154971/2017  Judge: Arlene P. Bluth  is no exception.  The case illustrates the intersection between mental illness, insanity and tolling of the statute of limitations.  There are few tolls of the statute.  Infancy, insanity and death are three that exist by statute.  What is insanity in the setting of everyday life?

“This legal malpractice case arises out of defendants’ representation of plaintiff Okello (“plaintiff’) in connection with her unsuccessful application for Social Security Income and Disability Insurance Benefits (hereinafter, “Social Security benefits”).· Plaintiff alleges that she began receiving Social Security benefits in 1999 as a result of suffering from bi-polar disorder, a condition which has caused her to be hospitalized on numerous occasions. Plaintiff claims that she relied on these benefits and the income of her husband to provide for her family. However, her husband suffered a stroke in 2006 and was subsequently unable to work. He eventually moved back to live with his parents in Zimbabwe, leaving plaintiff to take care of their children. Plaintiff lost her Social Security benefits in 2012 and filed an application to have her benefits reinstated.

When her initial application was denied, plaintiff hired defendants in December 2012 to .represent her in an appeal of the denial. Plaintiff claims she told defendants about how dire her financial situation and how much she needed the money to support her family. A hearing date of October 9, 2013 was set for plaintiffs appeal.

Before the hearing, the relationship between plaintiff and defendants deteriorated.
Plaintiff contends that defendants were rude and showed a lack of knowledge about her case.
Plaintiff fired defendants in June 2013. Defendants t9ld the Social Secur~ty Administration (the
body hearing plaintiffs appeal) ori June 13, 2013 that it no longer represented.plaintiff.
Thereafter, on September 4, 2013, defendants filed a request with the Social Security
Administration to withdraw plaintiffs appeal and claimed they were doing so with plaintiffs
consent. Plaintiff alleges that this letter was sent without her consent. The Social Security
Administration subsequently dismissed plaintiffs appeal on September 10, 2013.””

On the date of the hearing, October 9, 2013, plaintiff contends that she ·showed up for the
appeal and was shocked when she was told that her case had been dismissed. Plaintiff claims that
her mental condition deteriorated after the withdrawal of her appeal and that her husband (still
living in Zimbabwe at the time) eventually committed suicide in Decem~er 2013. Plaintiff
contends that her husband was distraught over the dismissal of plaintiffs claim, which would
prevent him from returning to the United States because the family did not have enough money
to support him.”

“Defendants argue that the time for plaintiff to file a legal malpractice cause of action ·
began to run in September 2013, when defendants allegedly sent the letter withdrawing plaintiffs
appeal. Defendants claim that this case was filed more than 3 years later in May 201 7.
In opposition, plaintiff argues that the legal malpractice claim accrued when plaintiff was
awarded benefits in March 2017. Plaintiff insists that she could not have brought a legal
malpractice claim until she knew whether her second attempt at getting benefits was successful.
Plaintiff also claims that the statute of limitations should be tolled both on equitable grounds or
on the basis that plaintiff suffered from a legal infirmity.

As an initial matter, the Court finds that the cause of action accrued on September 10,
2_013-when the Social Security Administration dismissed plaintiffs case. Although plaintiff
claims that she did not find out about the dismissal until she showed up for the hearing on
October 9, 2013 “the accrual time is measured from the day an actionable injury occurs even if
the aggrieved party is ignorant of the wrong or injury. What is important is when the malpractice was committed, not when the client discovered it” (McCoy v Feinman, 99 NY2d 295, 301, 755 NYS2d 693 [2002]). Here, the alleged malpractice was on September 10, 2013, the date when plaintiffs appeal was dismissed.
Plaintiffs claim that she did not have a viable cause of action until she was successful in
her second attempt to get Social Security benefits is without merit. As stated above, to establish
causation on this claim, plaintiff must show that she would have prevailed in the
underlying action. Here, that underlying action was dismissed in September 2013. Simply
because the Social Security Administration allows a person to file a new request for benefits does
not toll the statute of limitations arising from the denial of the first application. There is no
reason why plaintiff could not have brought a legal malpractice claim before.her subsequent
· Social Security claim was resolved. A legal malpractice cause of action accrues “from the date
of injury caused by the an attorney’s malpractice” (id.). Here, that was when the Social Security
Administration dismissed plaintiffs application for benefits following defendants withdrawal of
plaintiffs appeal, allegedly without her consent. Confirmation that plaintiff eventually won back
her benefits certainly would be helpful in proving a legal malpractice case, but it does not change
when the statute of limitations began to run. “