Professionals get one kind of statute of limitations; all others get a different kind.  That is the lesson of Brown v Deck  2016 NY Slip Op 30337(U)  February 26, 2016  Supreme Court, New York   County  Docket Number: 152769/2015  Judge: Cynthia S. Kern.  For professionals, the statute starts to run on the date of the negligence; for others, not so much.

“The relevant facts are as follows. Plaintiff Robert Brown contracted with defendants to design and build a deck at plaintiffs’ residence. In 2005. defendants completed construction of the deck. On or about July 10. 2012, when Mr. Brown leaned against a portion of the deck rail,  the rail collapsed and he fell approximately fifteen feet to the ground, sustaining injuries. Plaintiffs allege that the deck rail was improperly attached to the deck by an insufficient number of screws which were of inadequate length. On or about March 5. 2015. within three years of when plaintiff Brown was allegedly injured, plaintiffs commenced the instant action. alleging. inter alia. a personal injury cause of action for negligent and defective design and construction.

Defendants moved to dismiss plaintiff Robert Brown’s personal injury cause of action for negligent design and construction solely on the ground that it was barred by the three year statute of limitations for non-medical malpractice claims pursuant to CPLR s 214(6). Pursuant to CPLR § 214(6). the statute of limitations for non-medical. dental. or podiatric malpractice is three years. whether the action is based in contract or tort. The court denied the motion to dismiss on this ground based on the cou11·s finding that defendants had failed to make a prima facie showing that they were an architect or other professional to whom CPLR § 214(6) would apply.”

“Defendants now argue that this court erred in its determination because defendants are entitled to dismissal of plaintiffs’ cause of action for negligent design and construction pursuant to CPLR ~ 214(6) because the accrual date for statute of limitations purposes is completion of performance, the statute of limitations for negligent design and construction claims is three years after completion of performance and plaintiffs did not commence this action within three years after completion of performance. In making this argument. the defendants rely on two Court of Appeals decisions which were cited in their original papers. See City School District of Newburgh ‘” Hugh Stubbins & Associates, Inc. 85 N. Y 2d 535 (1995): Cabrini Medical Center v.  Desina,  64 N.Y.2d 1059 (1985). However. these cases are completely inapplicable to the present case. Initially. neither of these cases hold, as defendants argue. that contractors are professionals for the purposes of determining the applicability of the statute of limitations contained in CPLR ~ 214(6). Moreover. these cases do not address what the statute of limitations is for a personal injury claim. which is what plaintiff is asserting in this action. and when a claim for personal injury accrues for statute of limitations purposes. In both Citv School Dis1rict of Newhurgh and Cabrini Medical Center. the issue before the court was the proper accrual date for a cause of action against a contractor for defective construction where the plaintiff is asserting a claim for damage to real or personal property arising out of the contractual relationship. ”

“However, as the Court of Appeals explicitly noted in Newburgh. the rule that a cause of action for negligent design accrues upon completion of the construction is only applicable where the cause of action is for damages to property which has its genesis in the contractual relationship between the parties and it does not apply to actions for personal injury. It is well established that a cause of action for personal injury, which is what plaintiff is asserting in this action, has a three year statute of limitations which accrues when the plaintiff is injured. See CPLR § 214 (5) (action to recover damages for a personal injury is three years); Snyder v. Town Insulation, Inc., 81 N.Y.2d429 (1993) (cause of action for personal injury accrues on date of injury). Moreover, defendants have still not made a showing that CPLR § 214(6) applies to this action as they have not made any showing that defendants are professionals. ”

In the professional malpractice world, which takes in all professionals other than physicians, we see the evolution of principals from medical malpractice to other professional malpractice claims.  As an example, continuous treatment evolved into continuous representation.  This process and how it is applied is discussed in  Jefferson Apts., Inc. v Mauceri  2016 NY Slip Op 26230 [52 Misc 3d 1012]  July 25, 2016  Ritholtz, J.

“The “continuous treatment” doctrine originated in medical malpractice cases to toll the running of the statute of limitations. This judicial exception was first encountered in 1902 in Gillette v Tucker(67 Ohio St 106, 65 NE 865 [1902]). The Gillette court held that using the surgery date as the starting point for calculating the statute of limitations would improperly burden the victim by forcing her to sue the surgeon while her treatment continued or forgo her cause of action. (Gillette, 67 Ohio St at 129, 65 NE at 871.) Over 100 years later, the “continuous treatment” doctrine, adopted by the New York courts, has evolved to cover not only medical malpractice, but, under the name of the “continuous representation” doctrine, has been extended to other professions and occupations, such as accountants.

Proper analysis and application of the “continuous representation” doctrine tend to produce just results, as opposed to mindless invocation of a limitations defense. The instant motion deals, inter alia, with the application of the “continuous representation” doctrine as it relates to the tolling of the statute of limitations in an action alleging accountant or auditor malpractice.”

“On a motion to dismiss a cause of action pursuant to CPLR 3211 (a) (5) on the ground that it is time-barred, a defendant bears the initial burden of establishing, prima facie, that the time in which to sue has expired (see Bill Kolb, Jr., Subaru, Inc. v LJ Rabinowitz, CPA, 117 AD3d 978 [2014]; Kennedy v H. Bruce Fischer, Esq., P.C., 78 AD3d 1016, 1017 [2010]). The burden then shifts to the plaintiff to raise a question of fact as to whether the statute of limitations was tolled or was otherwise inapplicable or whether the action was actually commenced within the applicable limitations period (see Kitty Jie Yuan v 2368 W. 12th St., LLC, 119 AD3d 674 [2014]; Beizer v Hirsch, 116 AD3d 725 [2014]; Williams v New York City Health & Hosps. Corp., 84 AD3d 1358, 1359 [2011]).

Negligence claims made against a nonmedical professional, whether based in tort or contract, are governed by a three-year statute of limitations (see CPLR 214 [6]; see also Matter of R.M. Kliment & Frances Halsband, Architects [McKinsey & Co., Inc.], 3 NY3d 538 [2004]; Chase Scientific Research v NIA Group, 96 NY2d 20 [2001]; Ackerman v Price Waterhouse, 84 NY2d 535 [1994]). As to the accounting malpractice claim, absent fraud, such a claim accrues when the harm occurs, which is “when all the facts necessary to the cause of action have occurred,” regardless of whether the plaintiff has yet become aware of the error (see Ackerman v Price Waterhouse, 84 NY2d 535, 541 [1994], supra; Mitschele v Schultz, 36 AD3d 249, 252 [2006]). Here, the alleged transactions on January 8, 2010, January 25, 2010 and February 9, 2010 would have been disclosed as a receivable in the financial statement for the year ending June 30, 2010, which was issued on February 7, 2011. With regards to these claims for auditing/accounting services rendered prior to June 17, 2012, they are dismissed.

The continuous representation doctrine tolls the running of the statute of limitations on a claim arising from the rendition of professional services only so long as the defendant continues to advise the client “in connection with the particular transaction which is the subject of the action and not merely during the continuation of a general professional relationship” (Zaref v Berk & Michaels, 192 AD2d 346, 348 [1993] [citations omitted]; see also Transport Workers Union of Am. Local 100 AFL-CIO v Schwartz, 32 AD3d 710, 713 [2006]; CLP Leasing Co., LP v Nessen, 12 AD3d 226, 227 [2004]; Dignelli v Berman, 293 AD2d 565, 566 [2002]). Thus, unless services relating to the particular transaction sued upon were rendered within the limitation{**52 Misc 3d at 1019} period, even the defendant’s “general and unfettered control of [the plaintiff’s] financial, tax and investment affairs . . . [is] insufficient to sustain the timeliness” of the action (Zaref, 192 AD2d at 348). Stated otherwise, where a professional advises a client in “a series of discrete and severable transactions” (Parlato v Equitable Life Assur. Socy. of U.S., 299 AD2d 108, 115 [2002], lv denied 99 NY2d 508 [2003]), the performance of services in each successive transaction does not serve to toll the running of the statute of limitations on any claim arising from the prior transaction (see Booth v Kriegel, 36 AD3d 312, 314 [2006]).

In this case, plaintiff does not dispute that the statute of limitations would be three years prior to the commencement of this action on June 17, 2015. Plaintiff disputes whether the financial statement for the period of July 1, 2010 through June 30, 2011 (the 2011 Financial Statement), prepared by Mauceri, is within the statutory period. Plaintiff argues that the claim for the 2011 Financial Statement accrued on the day Mauceri issued it to the Board, on or about September 28, 2012. Page one of Mauceri’s report dated September 28, 2012, provides, as herein relevant, as follows:

“”In my opinion, the financial statements and schedules referred to above present fairly, in all material respects, the financial position of The Jefferson Apartments, Inc., as of June 30, 2012 and June 30, 2011, and results of its operations for the years then ended in accordance with accounting principles generally accepted in the United States of America.”

Big law firm gets hired to guide an unusual real estate tax deduction which goes wrong.  How do the timelines for legal malpractice, IRS tax determinations, tax years, and the filing of deeds interact?

BLDG Christopher LLC v Herrick Feinstein LLP  2016 NY Slip Op 32237(U)  October 31, 2016  Supreme Court, New York County  Docket Number: 651795/12  Judge: Barry Ostrager gives both the history and the analysis of how the statute is applied, including a discussion of the only exception to the onset of the statute of limitations.

“Pursuant to CPLR § 214(6), the statute of limitations for legal malpractice is three years, “regardless of whether the underlying theory is based in contract or tort.” Similarly, the statute of limitations for the breach of fiduciary duty claim is three years, as it is based on some of the same facts as the malpractice claim and, like the malpractice claim, seeks monetary damages rather than equitable relief. See Nichols v Curtis, 104 AD3d 526, 527 (1st Dep’t 2013). According to Herrick, the law firm’s representation of plaintiffs in connection with the matters at issue ended in May of 2005 when it issued Opinion Letters regarding the tax status of the Easement donations, and the commencement of this action seven years later in May of 2012 is untimely. Plaintiffs first argue in opposition that the action is timely because the malpractice cause of action did not accrue until in or about 2011 at the earliest, when the IRS determined to disallow the tax deductions plaintiffs had claimed on their 2004 returns and plaintiffs discovered Herrick’s alleged malpractice for the first time. As recently as this month, in Hahn v The Dewey & LeBoeuf Liquidation Trust, 2016 WL 6078932, a case directly on point, the Appellate Division, First Department, rejected such a “discovery” argument, stating that: “Although plaintiffs claim not to have discovered that this advice was incorrect until years later, ‘[w]hat is important is when the malpractice was committed, not when the client discovered it’.” Hahn, citing McCoy v Feinman, 99 NY2d 295, 301 (2002), quoting Ackerman v Price Waterhouse, 84 NY NY2d 535, 541 (1994). The Appellate Division affirmed the trial court’s dismissal of the legal malpractice claim in connection with the defendant law firm’s erroneous tax advice rendered more than three years earlier, even though plaintiffs had not discovered the error until the IRS raised it two years before the action was commenced.

Plaintiffs latch on to certain language by the Court of Appeals in McCoy and Ackerman, supra, also quoted in Hahn, 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.” They argue that since they could not prove Herrick’s error until the IRS disallowed the Easement tax deduction in or about 2011, they could not prove injury and obtain relief in court. Such a reading is inconsistent with the facts and holding in Hahn discussed above. It is also contrary to other clarifying language in McCoy, where the Court of Appeals expressly found that: “Because the [defendant lawyer] was negligent in failing to assert plaintiff’s claim to preretirement death benefits in the settlement stipulation or judgment, we conclude that plaintiff suffered actionable injury on the day of the stipulation … , or at the latest, on the day the judgment incorporating the stipulation was filed in the county clerk’s office” even though plaintiff did not discover the negligence until she sought to access the death benefits years later. 99 NY2d at 301 (emphasis added). Similarly, the Court of Appeals in Ackerman found that the cause of action for accountant malpractice accrued upon the accountant’s issuance of an erroneous tax return and not years later when the IRS assessed the deficiency. 84 NY2d at 541-42. In so holding, the court explained that “the claim accrues upon the client’s receipt of the accountant’s work product since this is the point that a client reasonably relies on the accountant’s skill and advice and, as a consequence of such reliance, can become liable for tax deficiencies …. This is the time when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court …. ” Id. at 541 (citations omitted); see also, Landow v Snow Becker Krauss, P. C., 111 AD3d 795 (2d Dep’t 2013) (cause of action for legal malpractice accrued when attorney issued erroneous tax opinion letter and not when the error was raised by the IRS and discovered by client years later). As defendants have demonstrated, prima facie, that plaintiffs’ claims are timebarred based on the 2005 accrual date, the burden shifts to plaintiffs to raise a question of fact as to whether the statute of limitations was tolled. Landow, supra, 111 AD3d at 796-97. In a further attempt to shield their claims from Herrick’s statute of limitations defense, plaintiffs seek to rely on the toll available under the “continuous representation” doctrine. Specifically, plaintiffs assert that the Herrick firm continuously represented them in connection with the original engagement inasmuch as Herrick was asked for assistance with regard to the IRS audit and rendered statements for services rendered through August of 2009. Plaintiffs argue that because of the continuous representation by Herrick, the statute of limitations did not expire until three years later, after this action was commenced in May 2012. The Court of Appeals explained the continuous representation doctrine in detail in Shumsky v Eisenstein, 96 NY2d 164, 167-68 (2001) (internal quotation marks and citations omitted): The continuous representation doctrine, like the continuous treatment rule, its counterpart with respect to medical malpractice claims, recognizes that a person seeking professional assistance has a right to repose .confidence in the professional’s ability and good faith, and realistically cannot be expected to question and assess the techniques employed or the manner in which the services are rendered. ”

“As summarized more recently by the First Department, a finding of continuous representation must be based on “clear indicia of an ongoing, continuous, developing and dependent relationship between the client and the attorney” or of “a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim.” Hadda v Lissner & Lissner LLP, 99 AD3d 476, 477 (1st Dep’t 2012), quoting Matter of Merker, 18 AD3d 332, 332-33 (1st Dep’t 2005). ”

“While the dismissal of all the claims asserted by four of the five plaintiffs may .I appear harsh at the pleading stage in light of the significant value of the claims, plaintiffs are all sophisticated, long-term real estate owners and investors in the City of New York. Had plafntiffs acted in 2007 or 2008 to enter into a tolling agreement or commenced suit against Herrick when the IRS first notified plaintiffs of questions relating to the tax deductions, plaintiffs’ suit would have been timely. But plaintiffs did not act then, and this Court cannot correct that omission. “While courts have discretion to waive other time limits for good cause (see CPLR 2004), the Legislature has specifically enjoined that ‘[n]o court shall extend the time limited by law for the commencement of an action’ … ” McCoy, supra, 99 NY2d at 300 (citations omitted). And the law discussed above does not permit a toll of the statute of limitations; even assuming an ongoing relationship between Herrick and the four plaintiffs, the allegations and evidence fail to demonstrate the required “mutual understanding of the need for further representation on the specific subject matter underlying the malpractice ‘ claim” so as to entitle plaintiffs to the continuing representation toll. Id. at 306. “

Professional negligence is different from ordinary negligence.  How, one asks?  When the statute of limitations commences is one difference.  We see in  All Craft Fabricators, Inc. v Syska Hennessy Group, Inc. 2016 NY Slip Op 07257   Decided on November 3, 2016  Appellate Division, First Department that the statute normally starts later for professional negligence.

“Plaintiffs allege that they were harmed by defendant’s failure to advise them that there was asbestos in wood panels and doors delivered to their facility for refurbishment. Defendant moved to dismiss based on, among other things, the three-year statute of limitations applicable to plaintiffs’ claim, whether grounded in professional negligence (malpractice) or ordinary negligence (CPLR 214[4], [6]).

Because the parties have no contractual relationship with each other, the claim must be viewed in terms of simple negligence (Board of Mgrs. of Yardarm Beach Condominium v Vector Yardarm Corp., 109 AD2d 684, 685 [1st Dept 1985], appeal dismissed 65 NY2d 998 [1985]), with accrual occurring within three years of the date of injury (Town of Oyster Bay v Lizza Indus., Inc., 22 NY3d 1024, 1031 [2013]), rather than a claim for professional negligence, which generally accrues upon the completion of the work at issue (Germantown Cent. School Dist. v Clark, Clark, Millis & Gilson, 100 NY2d 202 [2003]). We reject defendant’s position that the date of injury was in January 2012 when the asbestos-laden doors and panels were delivered to the facility. Until plaintiffs’ personnel actually unsealed the wooden crates that the doors and panels were encased in and cut into the material, any contamination of plaintiffs’ facility had not yet occurred.

Nevertheless, plaintiffs’ contention that the date of injury was, at the earliest, May 29, 2012, exactly three years before they commenced the action, when they first noticed what they believed to be asbestos, is unavailing. “[T]he damage that [plaintiffs] are seeking to undo’ is not the fact that they discovered asbestos, but the fact of its incorporation in their buildings” (MRI Broadway Rental v United States Min. Prods. Co., 92 NY2d 421, 428 [1998]). The record makes clear that, while plaintiffs may have first noticed asbestos on May 29, they exposed the facility to it earlier that month.”

What exactly does it take to form an attorney-client relationship?  When are services provided to a party susceptible of a claim of legal malpractice?

Exeter Law Group LLP v Wong 2016 NY Slip Op 32190(U)  October 26, 2016  Supreme Court, New York County  Docket Number: 161667/2014  Judge: Eileen A. Rakower tells us that:  “”To determine whether an attorney-client relationship exists, a court must consider the parties’ actions.” (Pellegrino v Oppenheimer & Co., Inc., 49 A.D. 3d 94, 99 [1st Dept 2008] [citations omitted]). “[A]n attorney-client relationship is established where there is an explicit undertaking to perform a specific task.” (Id.). While the existence of an attorney-client relationship is not dependent upon the payment of a fee or an explicit agreement, a party cannot create the relationship based on his or her own beliefs or actions. (Id.). See Jane St. Co. v Rosenberg & Estis, P.C., 192 A.D. 2d 451, 451 [1st Dept 1993] (holding “[t]here is nothing in the record to indicate that defendant law firm either affirmatively led plaintiff to believe it was acting on plaintiffs behalf or knowingly allowed plaintiff to proceed under this misconception.”). In order to defeat a motion to dismiss, a party must plead facts showing the privity of an attorney-client relationship, or a relationship so close as to approach privity. (Cal. Pub. Employees Ret. Sys. v. Shearman & Sterling, 95 N.Y.2d 427, 434 [2000] [affirming dismissal of legal malpractice claim for failure to plead actual privity or “a relationship so close as to approach that of privity”]). To show “a relationship so close as to approach that of privity,” or “near privity,” “[t]he evidence must demonstrate “(1) an awareness by the maker of the statement that it is to be used for a particular purpose; (2) reliance by a known party on the statement in furtherance of that purpose; and (3) some conduct by the maker of the statement linking it to the relying party and evincing its understanding of that reliance.” Cal. Pub. Employees, 95 N.Y.2d at 434. “To show ‘near privity,’ a plaintiff must allege that the attorney was aware that its services were used for a specific purpose, that the plaintiff relied upon those services, and that the attorney demonstrated an understanding of the plaintiffs reliance.” Candela Entertainment, Inc. v. Davis & Gilbert, LLP, 39 Misc 3d 1232(A) [Sup Ct 2013]. Here, taking all of the allegations as true, Defendants/Counterclaim Plaintiffs have alleged an attorney client relationship with Tan and the Tan Firm, and the engagement letter with Exeter does not flatly contradict the allegations. “

Billiard Balls Mgt., LLC v Mintzer Sarowitz Zeris Ledva & Meyers, LLP  2016 NY Slip Op 26356  Decided on November 2, 2016  Supreme Court, New York County  Edmead, J.  is an application of a 200 year old case to a question of timeliness.  When does the statute of limitations commence for a legal malpractice case and are there suspensions, stays or tolling of the statute?

Put simply, a one-car motor vehicle accident is reported to the insurance carrier and an attorney is directed to seek an extension to “answer or move” (but not to appear).  Then the insurance carrier declined coverage and the attorney dropped out of the case without any further paper filings.

The case went unanswered until Plaintiff hired new attorneys.  The answer was rejected and supreme court determined it to be timely.  The Appellate Division reversed.  When does the statute of limitations begin to run?  It is suspended, stayed or tolled?

“Billiard alleges that the Firm committed legal malpractice by failing to file a timely Answer by January 11, 2013, failing to move for relief to prevent Billiard from defaulting in the underlying action, and in failing to move to withdraw as counsel. It is uncontested that pursuant to CPLR 321(b), an attorney of record may be changed by filing with the clerk a consent to the change signed by the retiring attorney and signed and acknowledged by the party. Pursuant to CPLR 321(c), “An attorney of record may withdraw or be changed by order of the court in which the action is pending, upon motion on such notice to the client of the withdrawing attorney, to the attorneys of all other parties in the action or, if a party appears without an attorney, to the party, and to any other person, as the court may direct.” (Emphasis added). And, the record clearly contains two stipulations signed by counsel at the Firm stating the Firm’s status as “Attorney” for “Defendants” to wit: Billiard. It is also noted that Billiard alleges that, when the Firm was notified by Capitol Insurance in December 2015 to refrain from further activity, the Firm failed to move to withdraw as counsel and seek a stay of the underlying matter pending said application. According to the underlying Appellate Division order, Gershman moved for a default judgment against Billiard nine months after the time for Billiard to submit an answer expired (on January 11, 2012). Although the Appellate Division found Billiard’s delay in answering at certain points of the underlying litigation unreasonable, the Decision does not address the alleged duty of, or actions by, the Firm during the period between December 28, 2012 (the issuance of Capitol Insurance’s disclaimer) and January 11, 2013 (the expiration of Billiard’s time to answer). Billiard’s time to answer had already expired by the time of Mr. Gash’s January 25, 2013 letter advising Billiard that the Firm “would not be representing” Billiard (Billiard member Aristotle Hatzigeorgiou affidavit, ¶9).

To the degree the Complaint alleges that the Firm was engaged to defend Billiard in the underlying action, and that the Stipulation bears the Firm’s (and its attorneys’) names as“Attorneys for Defendants” “Billiard Balls Management LLC d/b/a Slate,” and assuming such facts as true as this Court must, the Court finds that Billiard states a claim for legal malpractice (emphasis added).

The Firm’s reliance on Paine Lumber Co. v Galbraith, (38 AD 68 [1899]), a Second Department case decided in the 1800s, for the position that it never appeared on behalf of Billiard is misplaced. Paine addressed only the issue of whether an attorney is deemed to have “appeared” in an action on behalf of his client, and not whether an attorney-client relationship [*3]existed between counsel and a purported client. In Paine, one attorney initially appeared in the action on behalf of defendant, and had obtained from the plaintiff’s attorney four extensions of time for defendant to answer. Thereafter, a different attorney signed an answer on behalf of defendant, which answer was rejected by plaintiff on the ground that the defendant had previously appeared in the action by the first attorney, who had not been properly substituted as counsel for defendant. Plaintiff argued that by obtaining the extensions of time to answer, the first attorney appeared in the action and that the answer could not be signed by anyone else in the absence of a proper substitution. Defendant argued that everything done by the first attorney did not constitute an appearance, and that defendant was free to put in an answer and thus appear in the action by any other attorney he chose. Under the theory that “attorneys in behalf of a defendant in obtaining an extension of time to answer . . . does not constitute a general appearance by such attorney” the Court held that the first attorney, “in subscribing himself as attorney for defendants [,] may have sufficed to operate as a waiver by defendants of irregularities or even as an affirmative submission to the jurisdiction of the court, . . . it was not an appearance which prevented the service of an answer signed by another attorney without substitution” (citations omitted) (id. at 70). (Emphasis added). Therefore, defendant “had not appeared in the action until he served the answer signed by” the second attorney. Such case, involving an appearance in an action by counsel so as to effect the manner in which a purported client communicates with other parties, simply does not establish that there was no attorney- client relationship between the parties.

Therefore, the Firm failed to demonstrate the absence of an attorney-client relationship at the time of Billiard’s default on January 12, 2013.”

“While it is well established that a court may not extend a Statute of Limitations or invent tolling principles, some tolling provisions are based upon common-law, equitable doctrines (Brown v State, 250 AD2d 314, 681 NYS2d 170 [3d Dept 1998] citing Roldan v Allstate Ins. Co., 149 AD2d at 33); cf., Shared Communications Services of ESR, Inc. v Goldman, Sachs & Co., 38 AD3d 325, 832 NYS2d 32 [1st Dept 2007] (declining to apply the doctrine of equitable tolling as there was no showing that plaintiff was “actively misled” by defendant, or that it “in some extraordinary way had been prevented from complying with the limitations period”)). Whenever some paramount authority prevents a person from exercising his legal remedy, the [*5]time during which he is thus prevented is not to be counted against him in determining whether the statute of limitations has barred his right, even though the statute makes no specific exception in his favor in such cases” (51 Am. Jur. 2d, Limitation of Actions, § 140, at 711; see also, 54 C.J.S., Limitations of Actions, § 86, at 121—123).

For example, and contrary to the Firm’s contention, the Statute of Limitations may be tolled where the limitations would run against a person unable to bring an action based on a prior ruling (see Brown, 250 AD2d 314, 681 NYS2d 170 citing Roldan, 149 AD2d 20, 32, 544 NYS2d 359) (“the Statute of Limitations is tolled where a cause of action has accrued, but was ‘temporarily extinguished as a result of an erroneous court order, which was later reversed'”); Coyle v Lefkowitz, 89 AD3d 1054, 934 NYS2d 216 [2011] (finding that a constructive fraud claim based on a November 24, 2003 entry of an unsatisfied judgment was not time-barred under the 6-year statute of limitations; the November 24, 2003 judgment was vacated by an order dated October 2, 2006, which was later reversed on September 9, 2008; thus, the statute of limitations was tolled for a period of approximately 23 months); cf. Varo, Inc. v Alvis PLC, 261 AD2d 262, 691 NYS2d 51 [1st Dept 1999] (declining to extend the toll applied to cases where a plaintiff was prevented from bringing suit by court order, where nothing in the Federal False Claims Act (31 USC § 3729 et seq) prohibited plaintiffs from timely commencing this action).

Even assuming the earliest date of the alleged malpractice was December 28, 2012, when Capitol Insurance declined coverage and the Firm ceased all action and did not advise plaintiff of same, or when the attorney-client relationship ceased as of December 28, 2012 (which this court does not find), Billiard was subsequently foreclosed from exercising any legal remedy by virtue of the Trial Court order dated May 7, 2015. Such order excused Billiard’s default, thereby eliminating any actionable injury suffered by Billiard, the statute of limitations was suspended until such injury was revived when, on September 23, 2015, the Appellate Division reversed the Trial Court order finding Billiard in default. In other words, Billiard no longer had a claim for malpractice upon the date of the Trial Court order. The Trial Court compelled plaintiff to accept Billiard’s answer, thereby, nullifying Billiard’s default, and Billiard was restored to its pre-default position in the underlying action. As such time, and notwithstanding that the malpractice claim had already accrued (at the earliest) on January 12, 2013 (when Billiard had defaulted in the action), Billiard no longer had a complete cause of action. As the statute of limitations was tolled during the 504 days (or, 1 year, 4 months, 16 days) between the time Billiard’s ability to sue was extinguished and subsequently restored, the instant action filed on April 26, 2015 was timely filed.^[FN3]

The Firm failed to establish that Billiard was not prevented from maintaining a malpractice claim notwithstanding the Trial Court order, and its sole argument in reply, that Billiard failed to city legal authority demonstrating an applicable toll under the circumstances is insufficient.”

Resnick v Abelow  2016 NY Slip Op 32197(U)  October 26, 2016  Supreme Court, New York County  Docket Number: 654313/2015  Judge: Eileen A. Rakower is the very rare legal malpractice case that starts off with a request for a default judgment.  Typically attorneys have malpractice insurance which mitigates against defaults.  Here, as almost always, something has befallen the attorney; death, disability or disbarment.  Plaintiff hired the attorney, the attorney suggested that she invest in a restaurant, $ 300,000 changes hands, the attorney id disbarred for the inability to defend financial improprieties and she sues.

“In addition to seeking a judgment against Mr. Abelow for $350,000, “representing the amount of the ‘investment,’ plus interest and costs, due to his fraud, fraudulent inducement, conversion of [her] money and breach of fiduciary duty,” Resnick is also seeking a judgment in the amount of $236,000.00, which would represent the return of the legal fees she paid to Mr. Abel ow. Resnick states that “Mr. Abel ow never provided [her] with bills that described his legal services, only a statement of hours allegedly spent on [her] case” which “contain no descriptions of services rendered.” Resnick states, “I believe that I was grossly overcharged by Mr. Abelow and that his services constituted malpractice, but for the purposes of this motion I am seeking to recover only the monies paid to him without any regard for the immense damages that I suffered from the monies paid to him without any regard for the immense damages that I suffered as a result of his negligent lawyering and the loss of custody of my son.” Resnick is also asking for a judgment to be rendered in the amount of $586,000.000 against defendant, 1683 Hospitality Group, Inc., “a business associated with Mr. Abelow.” As for the basis to hold 1683 Hospitality Group liable, Resnik states: I believe this business held the monies he defrauded me into giving him for ‘investment’ into the restaurant. I have been advised by my attorney that the corporate records for the New York Secretary of State reflect that this business has the same address as Mr. Abel ow’ s address. A social media business site, Linkedin.com, had this business same [sic] associated with Mr. Abelow. I believe this entity received my money after it was paid to Mr. Abelow. CPLR § 3215 provides, in relevant part: “On any application for judgment by default, the applicant shall file proof … of the facts constituting the claim, the default and the amount due by affidavit made by the party.” (CPLR § 3215[f]). Defendants have not answered or otherwise responded to the complaint, or appeared in opposition to this motion. Plaintiffs motion for default judgment is granted as against Defendants on the issue of liability. However, the statement of amounts due extend beyond funds issued for investment and legal fees and are not supported by Plaintiffs statements alone. Plaintiff must demonstrate her damages at an inquest. ”

Will any of this ever be recovered?  Stay tuned.