It seems to be a simple question.  What is the statute of limitations for legal malpractice?  After all, the Court of Appeals decided the issue squarely in Melcher v Greenberg Traurig, LLP  2014 NY Slip Op 02213 [23 NY3d 10]  April 1, 2014 Read, J. Court of Appeals.  “Thus, even if a claim for attorney deceit originated in the first Statute of Westminster rather than preexisting English common law (a question unresolved by Amalfitano and disputed by the parties in this case), liability for attorney deceit existed at New York common law prior to 1787. As a result, claims for attorney deceit are subject to the six-year statute of limitations in CPLR 213 (1). Because of our disposition of this appeal, we do not reach and need not resolve Melcher’s other arguments.”

Simple, no?  Not so simple.  Looking backwards, at one time there were different statutes of limitation for legal malpractice in tort (3 years) and in contact (6 years).  The legislature “solved” the problem by passing CPLR 214(6)  “The following actions must be commenced within three years:

So, when the issue of the statute of limitations for JL 487 comes up, the Second Department has charted its own course.  It has now determined, at least twice that when a JL 487 claim is enunciated in the same case with a Legal Malpractice claim, then its 6 year statute is transmuted to a 3 year statute, based upon the same logic as having a 6 year contract statute transmuted to a 3 year statute.  They wrote:

“The Odierno defendants demonstrated, prima facie, that the present action was commenced after expiration of the three-year statute of limitations applicable to the plaintiff’s legal malpractice cause of action (see CPLR 214 [6]). Moreover, since her cause of action alleging a violation of Judiciary Law § 487 is premised on the same facts and does not allege distinct damages, it too is barred by the three-year statute of limitations (see Farage v Ehrenberg, 124 AD3d 159, 169 [2014]; cf. Melcher v Greenberg Traurig, LLP, 23 NY3d 10, 15 [2014]).”

Judiciary Law 487, which is “not lightly” applied to attorneys resulted in a finite set of cases during 2015.  Over the next month we will review all of the cases, and try to determine the trends.  Today, we look at  Armstrong v Blank Rome LLP;  2015 NY Slip Op 01755 [126 AD3d 427]
Decided on March 3, 2015 Appellate Division, First Department.

Although the AD decision does not state the acts of deceit, a review of Supreme Court’s decision and order  indicates that Blank Rome was representing Morgan Stanley in “lucrative transactional representation in Pennsylvania.”  Her husband was “so exalted at Goldman Sachs and that his interests and his company’s were so intertwined” that Blank Rome “threw her under the bus.”  She claims that Blank Rome advised her to give up her share of the marital asset valued at $ 16,167,000.  Wow!

The AD affirmed Supreme Court’s denial of the motion to dismiss.  “The complaint states a claim for violation of Judiciary Law § 487 with sufficient particularity (see Flycell, Inc. v Schlossberg LLC, __ F Supp 2d __, 2011 WL 5130159, *5, 2011 US Dist LEXIS 126024 [SDNY 2011]; Greene v Greene, 47 NY2d 447, 451 [1979]). Specifically, the complaint alleges that defendants concealed a conflict of interest that stemmed from defendant law firm’s attorney-client relationship with Morgan Stanley while simultaneously representing plaintiff in divorce proceedings against her ex-husband, a senior Morgan Stanley executive, who participated in Morgan Stanley’s decisions to hire outside counsel (see New York Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.7[a]). Contrary to defendants’ argument, applying a liberal construction to the allegations in the complaint (see e.g. Leon v Martinez, 84 NY2d 83, 87-88 [1994]), plaintiff identifies the nature of the conflict as stemming from defendants’ interest in maintaining and encouraging its lucrative relationship with Morgan Stanley and the impact of that interest on defendants’ judgement in its representation of plaintiff in the divorce proceedings (see New York Rules of Professional Conduct [22 NYCRR 1200.0] rule 1.7[a]).

Further, the complaint alleges numerous acts of deceit by defendants, committed in the course of their representation of plaintiff in her matrimonial action. Additionally, the complaint sufficiently alleges that the individual defendants knew of but did not disclose defendant law firm’s representation of Morgan Stanley to plaintiff, and it details the calculations of her damages.”

On the macro level, both areas concern professionals doing a less than maximal job.  On a micro level, the rules are similar.  A relationship, a departure and damages.  How and when to apply the rules differs, as is seen in Alksom Realty LLC v Baranik  2015 NY Slip Op 50869(U) [47 Misc 3d 1227(A)]  Decided on June 9, 2015  Supreme Court, Kings County  Demarest, J.

“Accounting Malpractice

Plaintiffs’ thirteenth through eighteenth causes of action originate from Rom Bar’s provision of tax and accounting services to the plaintiffs. Plaintiffs claim that Roman and Rom Bar provided accounting and tax related services to Komolov from 1985 to 2014 and to Alksom [*2]from 2005 to 2014, and that Komolov’s engagement of Rom Bar’s services was based to a great extent on the fact that Roman was fluent in Russian and that all communications between Komolov and Roman were conducted in Russian.

In or about May 2007, Alksom contracted to sell apartment 58G at 25 Columbus Circle, New York, New York (the “Contract” and the “Apartment”, respectively) to Artique Multinational, LLC (“Artique”) for the purchase price of $4.1 million. Upon execution of the Contract, Artique paid $41,000 as a down payment to Alksom. At the closing of title, Artique did not pay the balance of the purchase price. Nevertheless, Alksom transferred title to the Apartment on September 10, 2007 based on the managing member of Artique, David Segal’s (“Segal”), assurances that payment of the balance was forthcoming. Plaintiffs claim that they were never paid the full purchase price. This chain of events gave rise to an action in New York County styled Komolov v Segal, Index No. 651626/2011, in which plaintiffs seek a money judgment for conversion of the Apartment (the “Segal Action”).

Based on Roman’s deposition testimony in the Segal Action, plaintiffs claim that Roman and Rom Bar committed accounting malpractice by reporting receipt of full consideration for the sale of the Apartment on Alksom’s 2007 Federal tax return (the “Original Return”), even though Alksom had never received the balance of the $4.1 million purchase price. Plaintiffs claim that Roman and Rom Bar impermissibly relied on representations from Segal that full consideration was paid to Alksom, as well as a single page facsimile from Segal that contained Segal’s recollection of the amount paid by Alksom when it first purchased the Apartment from Segal in 2005. Plaintiffs claim that Roman failed to collect any supporting documentation and did not have “closing statements” from either Alskom’s 2005 purchase of the Apartment or the September 2007 sale of the Apartment. Plaintiffs further claim that Roman and Rom Bar knew that no consideration was received in plaintiffs’ bank accounts because Roman had full access to these accounts. Plaintiffs assert that Roman and Rom Bar relied on incomplete information and failed to verify this information with the client before filing the Original Return. Plaintiffs further assert that although Roman and Rom Bar knew that the Original Return was inaccurate by the fall of 2010, Roman and Rom Bar waited until 2012 to file an amended tax return, even though the deadline to amend the Original Return would have been April 2011. Based on these allegations, plaintiffs assert causes of action for accountant malpractice, negligence, and gross negligence.”

“Defendants argue that plaintiffs’ thirteenth through eighteenth causes of action must be dismissed as time-barred. CPLR § 214(6) sets forth a three-year statute of limitations for accounting malpractice. “A claim accrues when the malpractice is committed, not when the client discovers it” (Williamson v PricewaterhouseCoopers LLP, 9 NY3d 1, 7-8 [2007]). Defendants claim that because the Original Return was filed on April 14, 2008, plaintiffs’ claims for accounting malpractice, negligence, and gross negligence are time-barred because this action was commenced on December 1, 2014, over three years from when plaintiffs’ cause of action accrued. However, plaintiffs correctly argue that the statute of limitations here is tolled because of the continuous representation doctrine.

“[U]nder the continuous treatment doctrine, when the course of treatment which includes the wrongful acts or omissions has run continuously and is related to the same original condition or complaint,’ the limitations period does not begin to run until the end of the treatment” (id. at 8, quoting Borgia v City of New York, 12 NY2d 151, 155 [1962]). Although the continuous representation doctrine originally derived from the continuous treatment concept in medical malpractice cases, it has been applied to other professionals, such as accountants (see Zaref v Berk & Michaels, P.C., 192 AD2d 346 [1st Dept 1993]). For the continuous representation doctrine to apply, plaintiff must “assert more than simply an extended general relationship between the professional and the client in that the facts are required to demonstrate continued representation in the specific matter directly under dispute” (id. at 348). After filing the Original Return in 2008, Roman filed an amended return in 2012 ^[FN2]in order to correct the erroneous information in the Original Return. Here, plaintiff has demonstrated continuous representation by defendants relating to the specific matter of the inaccuracies reported by Roman and Rom Bar in the Original Return such that the statute of limitations is tolled. Accordingly, plaintiffs’ accounting malpractice claims are timely.”

We predict that Facebook, Inc. v DLA Piper LLP (US)  2015 NY Slip Op 09602  Decided on December 29, 2015  Appellate Division, First Department   will turn out to be a highly cited and influential case in 2016.  The general sentiment, even in the face of conduct strongly suggesting deceit is basically to look the other way.  Judiciary Law 487, the most ancient of common law proscriptions is celebrated but almost never applied.

The facts are set forth, and generally support the reasonable assumption that Ceglia should not have been believed, even for a minute.  Nevertheless, a number of really big-time serious NYC law firms took up the case.  Was it solely for fees?  We don’t know.

“On June 30, 2010, Ceglia, through defendant attorney Paul Argentieri, filed a complaint in Allegheny County Supreme Court against Facebook and Zuckerberg (the Ceglia action), alleging that on April 28, 2003, Zuckerberg and Ceglia purportedly entered into a “Work For Hire Contract.” This purported contract allegedly reflected Ceglia’s agreement to pay Zuckerberg for developing the Street Fax website and a separate website with the working title of “The Face Book,” and Ceglia’s purported acquisition of a 50% interest in the software, programming language and business interests derived from any expansion of The Face Book, along with an additional 1% interest for each day the website was delayed beyond January 1, 2004. At the time they filed the complaint, Ceglia’s representatives obtained an ex parte TRO from the court restraining Facebook from transferring, selling, or assigning any assets owned by [*2]it. The TRO was served on Facebook on July 6, 2010, and expired on or before July 23, 2010.

On July 9, 2010, the case was removed to federal court based on diversity jurisdiction. From the outset of the litigation, Zuckerberg took the position that the Work For Hire Contract was a forgery and the Ceglia action was fraudulent.

In early 2011, Ceglia and Argentieri offered a contingency fee arrangement to various law firms via a “Lawsuit Overview” document, which mapped out the strategy and bases of the lawsuit. Several law firms, including the DLA Piper and the Lippes defendants, as well as Kasowitz, Benson, Torres and Friedman, LLP (Kasowitz), agreed to represent Ceglia.

On March 30, 2011, a forensic e-discovery consultant working with Kasowitz discovered the original Street Fax Contract on Ceglia’s computer hard drive and concluded it had been altered to create the “Work For Hire Contract” by adding references to Facebook. Kasowitz notified Argentieri of these findings several times and immediately withdrew as Ceglia’s counsel.

On April 11, 2011, the DLA Piper and the Lippes defendants (DLA-Lippes) filed an amended complaint in the Ceglia action repeating Ceglia’s claims against Facebook based on the Work For Hire Contract, and quoting, but not attaching, purported emails between Zuckerberg and Ceglia discussing the development of Facebook.

On April 13, 2011, Kasowitz sent a letter to the DLA-Lippes defendants, informing them that on March 30, it had seen documents on Ceglia’s computer that established that the Work For Hire Contract was a forgery and that it had communicated these findings to Argentieri on March 30, April 4, and April 12. The letter further stated that Kasowitz would agree, pending an investigation that defendant Vacco of Lippes Mathias had promised to undertake, to refrain from reporting its findings to the Federal Court ^[FN1]. This investigation was indeed undertaken as discussed infra.

On June 2, the parties moved and cross-moved for expedited discovery concerning the Work For Hire Contract, complete with affidavits and expert evidence both for and against the authenticity of the contract. On June 29, on the eve of the hearing for expedited discovery, the DLA-Lippes defendants

withdrew from the case without explanation ^[FN2]. The Federal Magistrate ordered expedited discovery into the authenticity of the Work For Hire Contract and the purported emails.

During the expedited discovery period, Ceglia hired the Milberg defendants, which first entered an appearance on March 5, 2012. They moved to withdraw from representing Ceglia on May 20, 2012.

On November 26, 2012, Ceglia was indicted for mail and wire fraud as a result of his scheme to defraud plaintiffs. He subsequently fled the jurisdiction and is currently a fugitive.

On March 26, 2013, following discovery, the Federal Magistrate recommended that the District Court dismiss the Ceglia action with prejudice, finding that the Work for Hire Contract and purported emails were all forgeries and that the lawsuit was a massive fraud on the court. This recommendation was adopted by the District Court on March 25, 2014, and the complaint was dismissed.”

“We turn now to the Judiciary Law claims. Relief under a cause of action based upon Judiciary Law § 487 “is not lightly given” (Chowaiki & Co. Fine Art Ltd. v Lacher, 115 AD3d 600, 601 [1st Dept 2014]) and requires a showing of “egregious conduct or a chronic and extreme pattern of behavior” on the part of the defendant attorneys that caused damages (Savitt v Greenberg Traurig, LLP, 126 AD3d 506, 507 [1st Dept 2015]). Allegations regarding an act of deceit or intent to deceive must be stated with particularity (see Armstrong v Blank Rome LLP, 126 AD3d 427, 427 [1st Dept 2015]); the claim will be dismissed if the allegations as to scienter are conclusory and factually insufficient (see Briarpatch Ltd., L.P. v Frankfurt Garbus Klein & Selz, P.C., 13 AD3d 296, 297-298 [1st Dept 2004],lv denied 4 NY3d 707 [2005]; Agostini v Sobol, 304 AD2d 395, 396 [1st Dept 2003]).

Here, the allegations that defendants knew of Ceglia’s fraud are conclusory and not supported by the record. Although plaintiffs allege that the DLA-Lippes defendants had been advised by Kasowitz that the Work For Hire Contract was a forgery prior to the filing of the amended complaint in the Ceglia action on April 11, the record unequivocally shows that the Kasowitz letter to that effect was dated April 13, two days after the amended complaint was filed. There is nothing to indicate that this information had been communicated to the defendants prior to the issuance of that letter. Moreover, plaintiffs offer no support for their claim that defendants had actual knowledge of the fraudulent nature of the claim based on statements made to them by Ceglia. In fact, the opposite is true. As noted, Ceglia consistently maintained that the Work For Hire Contract was genuine and even passed a polygraph test covering the contract and his other claims. Statements made in pleadings upon information and belief are not sufficient to establish the necessary quantum of proof to sustain allegations of fraud (see Angel v Bank of Tokyo-Mitsubishi, Ltd., 39 AD3d 368, 370 [1st Dept 2007]). Even assuming that the DLA-Lippes defendants knew of Kasowitz’s finding before they filed the amended complaint, and regardless of the fact that the Milberg defendants knew about the Street Fax Contract when they represented Ceglia, at any of those times, there was no conclusive proof of Ceglia’s fraud that rendered their representation deceptive. In fact, the dispute over the authenticity of the contract remained central to the Ceglia litigation throughout that action, and was the subject of expert testing and opinion, both in favor of, and against, its authenticity. As a result, the Judiciary Law § 487 claim should have been dismissed.”

It appears that there is a higher standard for Judiciary Law 487 than any other part of the common law.  Remember, JL 487 is the common law of the State of New York, and is not “merely” a statute. (Melcher v. Greenberg Taurig LLP.).  Yet, the standard is actually higher. Chowaiki & Co. Fine Art Ltd. v. Lacher.  Relief is not “lightly given” and JL 487 cases are routinely dismissed on CPLR 3211 motions.

The First Department dismissed a rather famous JL 487 case today. Facebook, Inc. v DLA Piper LLP (US) 2015 NY Slip Op 09602  Decided on December 29, 2015  Appellate Division, First Department was dismissed in a CPLR 3211 motion even when briefed by a well regarded firm, which had fascinating facts at its disposal.

“This case arises from dealings dating back over a decade between plaintiff Mark Elliot Zuckerberg and nonparty Paul Ceglia. The underlying facts of this case are as follows:

On April 28, 2003, Ceglia hired Zuckerberg to design a website for a company called Street Fax, Inc. Ceglia and Zuckerberg executed a two-page contract (the Street Fax Contract) and Zuckerberg performed some work under the contract, although he was not paid in full by Ceglia.

In December 2003, Zuckerberg conceived of Facebook, which he launched on February 4, 2004.

On June 30, 2010, Ceglia, through defendant attorney Paul Argentieri, filed a complaint in Allegheny County Supreme Court against Facebook and Zuckerberg (the Ceglia action), alleging that on April 28, 2003, Zuckerberg and Ceglia purportedly entered into a “Work For Hire Contract.” This purported contract allegedly reflected Ceglia’s agreement to pay Zuckerberg for developing the Street Fax website and a separate website with the working title of “The Face Book,” and Ceglia’s purported acquisition of a 50% interest in the software, programming language and business interests derived from any expansion of The Face Book, along with an additional 1% interest for each day the website was delayed beyond January 1, 2004. At the time they filed the complaint, Ceglia’s representatives obtained an ex parte TRO from the court restraining Facebook from transferring, selling, or assigning any assets owned by [*2]it. The TRO was served on Facebook on July 6, 2010, and expired on or before July 23, 2010.

On July 9, 2010, the case was removed to federal court based on diversity jurisdiction. From the outset of the litigation, Zuckerberg took the position that the Work For Hire Contract was a forgery and the Ceglia action was fraudulent.

In early 2011, Ceglia and Argentieri offered a contingency fee arrangement to various law firms via a “Lawsuit Overview” document, which mapped out the strategy and bases of the lawsuit. Several law firms, including the DLA Piper and the Lippes defendants, as well as Kasowitz, Benson, Torres and Friedman, LLP (Kasowitz), agreed to represent Ceglia.

On March 30, 2011, a forensic e-discovery consultant working with Kasowitz discovered the original Street Fax Contract on Ceglia’s computer hard drive and concluded it had been altered to create the “Work For Hire Contract” by adding references to Facebook. Kasowitz notified Argentieri of these findings several times and immediately withdrew as Ceglia’s counsel.

On April 11, 2011, the DLA Piper and the Lippes defendants (DLA-Lippes) filed an amended complaint in the Ceglia action repeating Ceglia’s claims against Facebook based on the Work For Hire Contract, and quoting, but not attaching, purported emails between Zuckerberg and Ceglia discussing the development of Facebook.

On April 13, 2011, Kasowitz sent a letter to the DLA-Lippes defendants, informing them that on March 30, it had seen documents on Ceglia’s computer that established that the Work For Hire Contract was a forgery and that it had communicated these findings to Argentieri on March 30, April 4, and April 12. The letter further stated that Kasowitz would agree, pending an investigation that defendant Vacco of Lippes Mathias had promised to undertake, to refrain from reporting its findings to the Federal Court ^[FN1]. This investigation was indeed undertaken as discussed infra.

On June 2, the parties moved and cross-moved for expedited discovery concerning the Work For Hire Contract, complete with affidavits and expert evidence both for and against the authenticity of the contract. On June 29, on the eve of the hearing for expedited discovery, the DLA-Lippes defendants

withdrew from the case without explanation ^[FN2]. The Federal Magistrate ordered expedited discovery into the authenticity of the Work For Hire Contract and the purported emails.

During the expedited discovery period, Ceglia hired the Milberg defendants, which first entered an appearance on March 5, 2012. They moved to withdraw from representing Ceglia on May 20, 2012.

On November 26, 2012, Ceglia was indicted for mail and wire fraud as a result of his scheme to defraud plaintiffs. He subsequently fled the jurisdiction and is currently a fugitive.

On March 26, 2013, following discovery, the Federal Magistrate recommended that the District Court dismiss the Ceglia action with prejudice, finding that the Work for Hire Contract and purported emails were all forgeries and that the lawsuit was a massive fraud on the court. This recommendation was adopted by the District Court on March 25, 2014, and the complaint was dismissed.

Based on these factual allegations, plaintiffs commenced the instant action, asserting claims for malicious prosecution and attorney deceit against defendants-appellants (defendants), among others, alleging that they initiated the Ceglia lawsuit without probable cause, and [*3]thereafter continued it even as they knew, or reasonably should have known, that it was fraudulent, without merit, and based on fabricated evidence from the moment the original complaint was filed and at all times while the action was pending.

“With respect to the claims brought under Judiciary Law § 487 for attorney deceit, defendants argued that the complaint should be dismissed because it failed to allege with the requisite particularity that they intended to deceive the court or plaintiffs, that they engaged in a chronic and extreme pattern of legal delinquency, or that they were aware of the fraud and deceit during the Ceglia action. Plaintiffs opposed those respective motions and the motion court denied all motions. For the following reasons, we now reverse.

On a motion to dismiss pursuant to CPLR 3211, we must accept as true the facts as alleged in the complaint and accord plaintiffs the benefit of every favorable inference (see Sokoloff v Harriman Estates Dev. Corp., 96 NY2d 409, 414 [2001]). However, “[f]actual allegations presumed to be true on a motion pursuant to CPLR 3211 may properly be negated by affidavits and documentary evidence” (Wilhelmina Models, Inc. v Fleisher, 19 AD3d 267, 269 [1st Dept 2005], citing Biondi v Beekman Hill House Apt. Corp., 257 AD2d 76, 81 [1st Dept 1999], affd 94 NY2d 659 [2000]; see also Matter of Sud v Sud, 211 AD2d 423, 424 [1st Dept 1995]).”

“We turn now to the Judiciary Law claims. Relief under a cause of action based upon Judiciary Law § 487 “is not lightly given” (Chowaiki & Co. Fine Art Ltd. v Lacher, 115 AD3d 600, 601 [1st Dept 2014]) and requires a showing of “egregious conduct or a chronic and extreme pattern of behavior” on the part of the defendant attorneys that caused damages (Savitt v Greenberg Traurig, LLP, 126 AD3d 506, 507 [1st Dept 2015]). Allegations regarding an act of deceit or intent to deceive must be stated with particularity (see Armstrong v Blank Rome LLP, 126 AD3d 427, 427 [1st Dept 2015]); the claim will be dismissed if the allegations as to scienter are conclusory and factually insufficient (see Briarpatch Ltd., L.P. v Frankfurt Garbus Klein & Selz, P.C., 13 AD3d 296, 297-298 [1st Dept 2004],lv denied 4 NY3d 707 [2005]; Agostini v Sobol, 304 AD2d 395, 396 [1st Dept 2003]).

Here, the allegations that defendants knew of Ceglia’s fraud are conclusory and not supported by the record. Although plaintiffs allege that the DLA-Lippes defendants had been advised by Kasowitz that the Work For Hire Contract was a forgery prior to the filing of the amended complaint in the Ceglia action on April 11, the record unequivocally shows that the Kasowitz letter to that effect was dated April 13, two days after the amended complaint was filed. There is nothing to indicate that this information had been communicated to the defendants prior to the issuance of that letter. Moreover, plaintiffs offer no support for their claim that defendants had actual knowledge of the fraudulent nature of the claim based on statements made to them by Ceglia. In fact, the opposite is true. As noted, Ceglia consistently maintained that the Work For Hire Contract was genuine and even passed a polygraph test covering the contract and his other claims. Statements made in pleadings upon information and belief are not sufficient to establish the necessary quantum of proof to sustain allegations of fraud (see Angel v Bank of Tokyo-Mitsubishi, Ltd., 39 AD3d 368, 370 [1st Dept 2007]). Even assuming that the DLA-Lippes defendants knew of Kasowitz’s finding before they filed the amended complaint, and regardless of the fact that the Milberg defendants knew about the Street Fax Contract when they represented Ceglia, at any of those times, there was no conclusive proof of Ceglia’s fraud that rendered their representation deceptive. In fact, the dispute over the authenticity of the contract remained central to the Ceglia litigation throughout that action, and was the subject of expert testing and opinion, both in favor of, and against, its authenticity. As a result, the Judiciary Law § 487 claim should have been dismissed.”

Law firm consults on a group of three loans that Plaintiff plans to make.  The loans are to be secured by life insurance policies as well as by  real property in Pennsylvania.  The law firm fails to file the correct lien documents and the loans are not secured.  This is a big, multi-million dollar loss.  The loans do not take place all on the same day, but are staggered.  When does the statue of limitations begin to run?

In Genesis Merchant Partners, LP v Gilbride, Tusa, Last & Spellane LLC  2015 NY Slip Op 31080(U) June 16, 2015 Supreme Court, New York County Docket Number: 653145/2014
Judge: Nancy M. Bannon the court discusses the statute of limitations.

“Gilbride represented Genesis in setting up the loans. Loan 2 closed on December 22, 2008, and Loan 3 closed on July 31, 2009. Loan 2 was to be secured by collateral in the form of a portfolio of five life insurance policies, having a value of approximately $84 million. Loan 3 was to be secured with one life insurance policy, as well as by a mortgage, in the amount of $1 million, on property located in Pennsylvania (Pennsylvania property). Seven months prior to the closing of Loan 3, a lien was placed on the Pennsylvania property by Farmer Boy Ag System, Inc. (Farmer Boy), in the sum of $234,006.27.

Genesis commenced this action on October 15, 2014, asserting four causes of action, as follows: (1) legal malpractice, arising from Gilbride’s alleged failure to perfect security interests in all three loans; (2) breach of contract; (3) negligence; and (4) disgorgement of fees. According to the complaint, Gilbride was retained to advise on all of the related loans between Progressive and Genesis through the maturity dates of the loans, including amending the loans and ensuring that Genesis’ security interests in the collateral were perfected. Gilbride was to structure and draft the Loan documents so as to perfect security interests in the Loan collateral. However, when Progressive defaulted on the Loans, it was discovered that the security interests had not been perfected. Genesis contends that Gilbride failed to perfect the security interest in the life insurance policies because Gilbride only attempted to perfect the collateral by the filing of UCC financing statements listing the policies, which are insufficient to perfect security interests in life insurance policies.

Gilbride is also alleged to have failed to record the mortgage on the Pennsylvania
property until one and one half years after the Loan 3 was made, allowing subsequent
mortgages to “jump in line” before Genesis’s mortgage was recorded. When the Pennsylvania
property was sold at a tax foreclosure sale, Genesis recovered nothing, as all of the sale
proceeds went to pay back taxes and to satisfy Farmer Boy’s lien. However, neither of the two
mortgages which “jumped in line” in front of Genesis received anything either. ”

“A cause of action for legal malpractice may be tolled by the continuous representation doctrine. See Glamm v Allen, 57 NY2d 87, 93 (1982). “[T]he rule 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 … [a] person [is not] expected to jeopardize his pending case or his relationship with the attorney handling that case during the period that the attorney continues to represent the person [internal quotation marks and citation omitted].” Id. at 93-94. The statute of limitations will be tolled by the continuous representation doctrine “only so long as the defendant continues to represent the plaintiff ‘in connection with the particular transaction which is the subject of the action and not merely during the continuation of a general professional relationship.”‘ Transport Workers Union of Am. Local 100 AFL-CIO v Schwartz, 32 AD3d 710, 713 (1st Dept. 2006) quoting Zaref v Berk & Michaels, 192 AD2d 346, 348 (1st Dept. 1993); see West Vil. Assoc. Ltd. Partnership v Balber Pickard Battistoni Maldonado & Ver Dan Tuin. PC, supra. In the present matter, Gilbride fails to establish that the legal malpractice claim accrued more than three years prior to the commencement of this action and is, therefore, time-barred. Genesis alleges in the complaint, filed in 2014, that the parties always anticipated Gilbride’s continuing oversight of the Loans through their maturity dates in June 2012. Indeed, Gilbride performed legal work on behalf of Genesis relating to the Loans through, at least, 2011. Specifically, Gilbride completed amendments to the Loans in 2010 and 2011, “crosscollateralized” Loan 4 with the Loans, and consolidated the Loans with Loan 4 in August 2011. Gilbride was responsible for reviewing and revising the Loan documents to ensure the perfection of the collateral for the Loans and using the presumably perfected Loan collateral to “cross-collateralize” with Loan 4. In addition, Gilbride represented Genesis in a suit in Connecticut against Progressive with regard to the Loans. Genesis and Progressive entered into a conditional settlement, drafted by Gilbride, in which Progressive was to pay the aggregate outstanding value of the Loans by June 2012, plus interim monthly payments commencing in January 2012. Such work was done in connection with the Loans and was not merely the continuation of a general professional relationship between the parties. See Transport Workers Union of Am. Local 100 AFL-CIO v Schwartz, supra. Further, some of the work done during this period, including recording a $1 million mortgage on property included as collateral on Loan 3 eighteen months after the closing, was performed to rectify the alleged act of malpractice, i.e. 4 [* 4] failing to secure the Loans. See Red Zone LLC v Cadwalader. Wickersham & Taft LLP, 118 AD3d 581 (1st Dept. 2014). ”