Judiciary Law § 487 is hard to prove to a court’s satisfaction.  It is not “lightly given” and rarely proceeds past the pleading stage.  Dreamco Dev. Corp. v Empire State Dev. Corp.  2021 NY Slip Op 00952 [191 AD3d 1444] February 11, 2021 Appellate Division, Fourth Department is a recent example.

“We likewise agree with defendants that the court erred in denying that part of the motion seeking to dismiss the ninth cause of action, for violations of Judiciary Law § 487, against Phillips Lytle LLP. Under section 487 (1), an attorney who “[i]s guilty of any deceit or collusion . . . with intent to deceive the court or any party,” is guilty of a misdemeanor and is potentially liable for treble damages to be recovered in a civil action. A violation of the statute may be established by evidence of the defendant’s alleged deceit (see Scarborough v Napoli, Kaiser & Bern, LLP, 63 AD3d 1531, 1533 [4th Dept 2009]; Izko Sportswear Co., Inc. v Flaum, 25 AD3d 534, 537 [2d Dept 2006]), but “alleged deceit that is not directed at a court must occur in the course of ‘a pending judicial proceeding’ ” (Hansen v Caffry, 280 AD2d 704, 705 [3d Dept 2001], lv denied 97 NY2d 603 [2001]; see Sun Graphics Corp. v Levy, Davis & Maher, LLP, 94 AD3d 669, 669 [1st Dept 2012]; Henry v Brenner, 271 AD2d 647, 647-648 [2d Dept 2000]).

The complaint alleged that Phillips Lytle LLP “actively participated in the preparation and distribution of [a certain memorandum] and preparation and filing of multiple court submissions to the New York State Supreme and Appellate Courts that included false and misleading statements” and “knowingly caused these misstatements to be filed with the intent of deceiving the Courts.” The complaint failed to allege, however, that Phillips Lytle LLP engaged in egregious misconduct or made a material false statement in the course of a judicial proceeding. The allegedly deceitful memorandum was not directed at the court, and the complaint failed to allege that it was promulgated during a pending judicial proceeding (see Costalas v Amalfitano, 305 AD2d 202, 203-204 [1st Dept 2003]; Hansen, 280 AD2d at 705). Furthermore, it is evident from the face of the complaint that plaintiffs were not parties to a judicial proceeding when the [*3]memorandum was prepared. The complaint also failed to identify the “multiple court submissions” that allegedly contained false and misleading statements by Phillips Lytle LLP, and it thus failed to adequately allege that deceitful statements were directed at a court (see Hansen, 280 AD2d at 705).

Finally, even assuming, arguendo, that the statement of an attorney from Phillips Lytle LLP to a law clerk that, according to defendant Travelers Casualty and Surety Company of America (Travelers), DiPizio’s surety, DiPizio’s “paperwork was a mess and . . . the subcontractors didn’t know what to build,” was directed at the court, we nevertheless conclude that “the complaint fail[ed] to show . . . a deceit that reaches the level of egregious conduct” on the part of Phillips Lytle LLP (Savitt v Greenberg Traurig, LLP, 126 AD3d 506, 507 [1st Dept 2015] [internal quotation marks omitted]; see Englert v Schaffer, 61 AD3d 1362, 1363 [4th Dept 2009]; cf. Papa v 24 Caryl Ave. Realty Co., 23 AD3d 361, 361-362 [2d Dept 2005], lv denied 6 NY3d 705 [2006], cert denied 547 US 1207 [2006]). Moreover, defendants submitted, as part of their motion, documentary evidence in the form of email communications and deposition testimony establishing, inter alia, that consultants for Travelers did, in fact, express the belief that DiPizio’s paperwork was in disarray.”

Was this merely bad luck or worse.  In either event. plaintiffs lack standing to bring this action. In Schoolman v McAuliffe 2020 NY Slip Op 34228(U) December 21, 2020 Supreme Court, Suffolk County Docket Number: 4311/2019 Judge: Sanford Neil Berland we see:

“This action arises out of three petitions initially brought under Chapter 11 of the United States Bankruptcy Code by. respectively. by 1 lampton Transportation Ventures. Inc. (HTV). Schoolman Transportation System, Inc. (STS) and 1600 Locust Avenue Associates, LLC ( 1600) (collectively, the debtor (Companies). which subsequently were converted to a consolidated Chapter 7 Bankruptcy proceeding and led to the liquidation of the three companies. Plaintiff was the founder. president and CEO of the debtor companies, and defendant, an attorney. represented the debtor corporations in the bankruptcy proceedings. Plaintiff commenced this action by filing a summons with notice on August 16, 2019, and served the complaint on defendant upon demand on October 6, 2019. Plaintiff seeks to allege claims against the defendant for breach of fiduciary duty, legal malpractice. fraud and honest services fraud arising
from his representation of the debtor companies in the bankruptcy proceedings. ”

“ln substance. the complaint alleges as follows: The debtor companies started suffering financial reversals in 2008. In 2014. they were forced by a hedge fund that had purchased the companies’ debt to hire a consultant. The consultant forced the companies into hard money
loans to the companies’ detriment, while enriching the consultant. Defendant learned of this from an SBA Joan underwriter who was working with plaintiff and whose office was in the same building as defendant’s office. Defendant told the underwriter that the plaintiff was the victim or “lender liability” and that he could help plaintiff with that and with Chapter 11. Plaintiff met with defendant and another lawyer who was introduced to him as an associate of defendant, and
it was represented to plaintiff that defendant and the associate would file a lender liability lawsuit while the debtors were in Chapter 11. They further represented that they were well versed in bankruptcy proceedings and would go “all-out” for their clients. Defendant never
brought the lender liability lawsuit. did not prepare a reorganization plan or take the steps to facilitate a possible purchase of the debtor companies’ assets pursuant to Section 363 of the Bankruptcy Code (a “363 sale”) or follow up on interest expressed by other bus companies in purchasing plaintiffs companies. Defendant filed only a tepid response to the motion for the appointment of a Chapter I I trustee. who he alleges. was corrupt. The Trustee imposed a purportedly unnecessary 10% non-refundable deposit on a $5.5 million 363 offer, which proved prohibitive to the prospective 363 purchasers. The 363 sale never came to fruition, and the debtor companies were, consequently. forced to liquidate. Plaintiff alleges that the defendant
deliberately timed the bringing of an order to show cause, aimed at preventing the debtor companies from being shut down, so that the bankruptcy judge would not be able to see the papers until two days after the debtor companies were, in fact, shut down. Further, according to plaintiff. in the order to show cause, defendant stated that he was only making the motion because his client asked him to. Defendant failed to bring to the court’s attention various infractions by the trustee. Although defendant’s associate was supposed to represent the debtor companies, he was not approved to do so under bankruptcy court’s rules, so his involvement had to remain secret. Defendant basically did nothing, plaintiff alleges. to advocate zealously on behalf of the debtor companies. ”

“‘Upon the filing of a voluntary bankruptcy petition. all property which a debtor owns, including a cause of action, vests in the bankruptcy estate,”‘(Burbacki v. Abrams, Fensterman, Fensterman, Eisman, Formato, Ferrara & Wolf, LLP, 172 AD3d 1300, l 300. 99 NYS3d 671
[2d Dept 2019), t/UOting Keegan v. Moriarty-Morris, 153 AD3d 683, 684 (2d Dept 2017), citing
11 USC § 541 [a][IJ; In re Oshome, 2013 WL 113177662, *2, 2013 US Dist LEXIS 190402,
*5-6 {SDNY 2013)). Therefore, a plaintiff may not maintain a legal malpractice cause of action
in his or her individual capacity relating to a bankruptcy. The right to sue is only exercisable by
the trustee in bankruptcy. whether the claim asserted in the complaint accrued prior to the filing of the bankruptcy petition. or post-petition (see 11 USC § 541 [a][ I): Burbacki v. Abrams,
Fensterman, Eiseman, Formato, Ferrara & Wolf, LLP, supra 172 AD3d at 1300.
citing Williams v. Stein, 6 AD3d 197, 775 I Jn re Alvarez, 224 F3d 1273. 1275-1278
[ 11th Cir 2000)). Therefore, to the extent that plaintiff asserts claims for legal malpractice in
connection with defendant’s representation of the three companies, plaintiff lacks the capacity to sue as a matter of bankruptcy law.”

Hartford Fire Ins. Co. v Sedgwick Claims Mgt. Servs., Inc. 2021 NY Slip Op 30438(U) February 16, 2021 Supreme Court, New York County Docket Number: 653915/2015 Judge: Andrea Masley is a case concerning the failures at trial of a medical malpractice case, and how that can play out in different states.

“In this breach of contract action, plaintiff Hartford Fire Insurance Company (Hartford) seeks to recover a payment of $15 m ii lion from defendant Sedgwick Claims Management Services, Inc. (Sedgwick), asserting that Sedgwick breached its third-party administrator services agreement (Agreement) (NYSCEF Doc. No. [NYSCEF] 257, 1 Agreement) by its negligent administration of the action Garrick Calandra, as Administrator of the Estate of Genevieve Calandra v Radius Management Services, Inc., et al. (Civil Action No. MICV2011-02874D [Middlesex Superior Court 2011]) (Wrongful Death Action.) Sedgwick’s negligence allegedly exposed Hartford to treble damages in a subsequent federal action for failure to “effect prompt, fair and equitable settlements of claims in cases where liability is reasonably clear …. ” (NYSCEF 238,
Verified Complaint~ 66.) ”

“The factual background is set forth in this court’s decision denying Sedgwick’s summary judgment motion and will not be repeated in detail here. (NYSCEF 188, Decision and Order.) To summarize, Genevieve Calandra died at age 91 on August 16, 2008. (NYSCEF 238, Complaint~ 25.) In addition to a variety of health problems, after falling from her wheelchair, Calandra was taken from the insured nursing home (Insured) and hospitalized. (Id.~ 61.) Calandro’s Estate, represented by David Hoey, Esq., filed the Wrongful Death Action on August 16, 2011. (Id.~~ 26-27.) Sedgwick’s claims manager, Mary Blair, hired Lawrence Kenney, Esq. to represent the Insured in the Wrongful Death Action. (Id.~~ 30, 32.) On July 21, 2014, the jury returned a  verdict of $1,425,000, $675,000 for pain and suffering and $750,000 for wrongful death, as well as punitive damages of $12,514,605 upon a finding of gross negligence. 3 (Id.~ 71.)

On September 30, 2014, the Calandra Estate demanded $40 million from Sedgwick and Hartford for purported bad faith and unfair trade practices for a failure to settle for which treble damages could be awarded under Massachusetts law. (NYSCEF 192, Estate’s 93A Demand Letter.)5 On November 20, 2014, Hartford settled the 93A Action for $15.9 million. 6 (NYSCEF 238, Complaint~ 85). On December 5, 2014, the Estate filed its action against Sedgwick (93A Action). (NYSCEF 191, Winget aff ~ 9; see also NYSCEF 214, Calandra v Sedgwick, 2017 WL 5593777 [D Mass 2017] [Civ Act. No. 15-10533].) Sedgwick offered to settle for $1.9 million, the amount of the compensatory damages and interest (NYSCEF 198, 93A Action Statement of Fact ~16).
However, there was no settlement with Sedgwick, and the matter proceeded against it.”


There is much further detail to read about, so read on in the case.

Judiciary Law 487 is the ancient deceit statute concerning attorneys.  It is not “lightly given” and remains a rarely successful remedy.  Lavelle-Tomko v Aswad & Ingraham  2021 NY Slip Op 01112 [191 AD3d 1142]
February 18, 2021 Appellate Division, Third Department is an example.

“After plaintiff was terminated by her former employer (hereinafter Century 21) from her position as a real estate agent in 2004, she allegedly used her access to Century 21’s voicemail to steal business, among other things. Century 21’s owners, Thomas A. Sbarra and Deborah J. Sbarra, discovered plaintiff’s activity in 2007 and commenced a civil action against her (hereinafter the first action). The Department of State’s Division of Licensing Services Enforcement Unit (hereinafter the Department) then began an investigation into plaintiff’s conduct. Plaintiff hired defendant Richard N. Aswad and his law firm, defendant Aswad & Ingraham (hereinafter A&I), to represent her in the first action, signing a letter of engagement on July 27, 2007 and providing A&I a retainer. Aswad represented plaintiff in the negotiation of a settlement agreement with Century 21 and the Sbarras, which was executed on August 19, 2007. The settlement agreement required plaintiff to, among other things, surrender her real estate license to the Department and cease working as a real estate agent or broker by September 1, 2007. Aswad timely delivered plaintiff’s license to the Department. Pursuant to plaintiff’s request to cancel her retainer agreements, on October 8, 2007, A&I sent plaintiff the balance of her retainer. In March 2008, after some negotiation involving Aswad and other attorneys, plaintiff’s license surrender was accepted by the Department.

In September 2009, plaintiff reapplied for and received her real estate license, and she resumed employment as a real estate broker in January 2010. On February 24, 2010, the attorney for Century 21 and the Sbarras wrote to Aswad asserting that plaintiff had violated the settlement agreement, as it had permanently barred plaintiff from reacquiring her license or resuming work as a broker or agent. Aswad responded that his representation of plaintiff had ended and he had not been retained on a continuing basis, and he forwarded the attorney’s letter to plaintiff. Plaintiff then asked Aswad to respond to the letter, which he did. When Century 21 and the Sbarras commenced an action for breach of the settlement agreement (hereinafter the second action), Aswad became attorney of record. Century 21 and the Sbarras prevailed at trial, obtaining a judgment requiring plaintiff to permanently surrender her real estate license, along with nominal damages (see Thomas A. Sbarra Real Estate, Inc. v Lavelle-Tomko, 117 AD3d 1210, 1210 [2014], lv denied 26 NY3d 907 [2015]). Aswad’s representation ended on September 24, 2015, after exhausting all appeals in the second action.”

“We also deny the portion of plaintiff’s cross motion seeking to amend her amended complaint to add a cause of action under Judiciary Law § 487. “[I]n the absence of prejudice or surprise resulting directly from the delay in seeking leave [to amend a pleading], such applications are to be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit” (Lakeview Outlets Inc. v Town of Malta, 166 AD3d 1445, 1446 [2018] [internal quotation marks and citations omitted]). Judiciary Law § 487 permits recovery of treble damages in a civil action against an attorney who intentionally deceives the court or a party during the pendency of a judicial proceeding (see Beshara v Little, 215 AD2d 823, 823 [1995]; see generally Amalfitano v Rosenberg, 12 NY3d 8, 14 [2009]). The claim must be pleaded with particularity and allege “intentional deceit and damages proximately caused by the deceit” (Jean v Chinitz, 163 AD3d 497, 497 [2018]). The proposed third amended complaint is palpably insufficient; it fails to plead the cause of action with particularity, as plaintiff pleaded no facts tending to prove [*6]that Aswad intended to deceive her. Moreover, plaintiff was aware of the facts allegedly supporting her proposed amendment before she filed the note of issue and certificate of readiness, yet she waited more than six months after such filing before seeking to add the Judiciary Law § 487 cause of action. Defendants plausibly assert prejudice related to this delay, as they intend to seek discovery on this new claim, but discovery is otherwise complete. Under the circumstances, plaintiff may not amend her amended complaint to add this new cause of action.”

Judiciary Law 487 is an ancient statute dealing with attorney deceit.  A case can be made, with great difficulty, that filing an affidavit of another person which contains false information is a violation.  More often, Courts will reject this argument for lack of proof that the attorneys really knew the information was false.

In Cordell Marble Falls, LLC v Kelly  2021 NY Slip Op 00833 [191 AD3d 760] February 10, 2021 Appellate Division, Second Department, the Court writes: “Under Judiciary Law § 487 (1), an attorney who “[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party” is liable to the injured party for treble damages (see Shaffer v Gilberg, 125 AD3d 632, 636 [2015]; Curry v Dollard, 52 AD3d 642, 644 [2008]). “[V]iolation of Judiciary Law § 487 requires an intent to deceive” (Moormann v Perini & Hoerger, 65 AD3d 1106, 1108 [2009]) as opposed to conduct which is negligent. Here, the evidentiary material submitted by the defendants in support of their motion, which included, among other things, the motion papers filed in the prior action and excerpts of Lovy’s deposition testimony given in the prior action, was sufficient to demonstrate that the fact as alleged by the plaintiffs—that the defendants knew that certain statements set forth in the Kamisher and Lovy affidavits when submitted in the prior action were false with intent to deceive the court—was not a fact at all (see Shaffer v Gilberg, 125 AD3d at 636; Siskin v Cassar, 122 AD3d 714, 717 [2014]; see generally Guggenheimer v Ginzburg, 43 NY2d at 274-275). The complaint, as amplified by the plaintiffs’ evidentiary submissions in opposition to the defendants’ motion, contained only conclusory allegations, without any factual basis, that the defendants acted to deceive the court when submitting the Kamisher and Lovy affidavits in the prior action (see generally Patel v Gardens at Forest Hills Owners Corp., 181 AD3d 611, 613 [2020]).”

Wait too long, and claims get stale.  Wait too long and claims disappear.  That’s exactly what happened in Johnson v Braverman CPA PC  2020 NY Slip Op 33149(U) September 25, 2020 Supreme Court, New York County
Docket Number: 650894/2020 Judge: Arlene P. Bluth.  A big overpayment was no longer subject to amendment and a big claim against the accountant was late.

“This case arises out of defendant’s work for plaintiff as an accountant. Plaintiff alleges that he hired defendant to handle his taxes in 2014. In 2016, he insists that he told defendant to file amended tax returns for 2013, 2014 and 2015. Later that year, plaintiff contends that defendant told him he had a tax liability of nearly $100,000 from the 2013, 2014 and 2015 federal, New York and New Jersey tax returns. He alleges that defendant filed a petition with the IRS Appeals Office in May 2016 to correct errors of previously filed amended tax returns but missed an August 2016 deadline to respond.
Plaintiff alleges that he hired another accounting firm in December 2016 and it calculated plaintiff’s tax liability to be only about $13,000. He alleges a breach of contract claim against defendant for miscalculating plaintiff’s tax liability and a fraud cause of action”

“The Court grants the motion. The allegations in the amended complaint clearly suggest a cause of action for accounting malpractice, which has a three-year statute of limitations (CPLR
214[6]). “The legislative history makes clear that where the underlying complaint is one which essentially claims that there was a failure to utilize reasonable care or where acts of omission or negligence are alleged or claimed, the statute of limitations shall be three years if the case comes within the purview of CPLR Section 214(6), regardless of whether the theory is based in tort or in a breach of contract” (In re R.M. Kliment & Frances Halsband, Architects (McKinsey & Co.,
Inc.), 3 NY3d 538, 541-42, 788 NYS2d 648 [2004] [internal quotations and citation omitted]).

And plaintiff’s accounting malpractice claim is time-barred. “There are circumstances where the statute of limitations is tolled, precluding dismissal on timeliness grounds although the alleged acts of negligence occurred more than three years prior to commencement of the action. This may occur where the parties engaged in a continuous professional relationship, such as where [the] same accounting firm provided ongoing services in addition to the yearly preparation of tax returns; however, this tolling of the statute is only appropriate where the continuous representation was in connection with the particular transaction which is the subject of the action” (Mitschele v Schultz, 36 AD3d 249, 252-53, 826 NYS2d 14 [1st Dept 2006]).

Here, defendant attached emails from plaintiff’s law firm to one of defendant’s employees in January 2017 instructing defendant to return plaintiff’s file (NYSCEF Doc. No. 42). It also submitted an affidavit from Mr. Braverman claiming that his work for plaintiff
terminated in response to those emails with plaintiff’s law firm and the files were shipped via FedEx on January 31, 2017 (NYSCEF Doc. No. 31, ¶¶16, 17).

The only logical conclusion is that the relationship with the parties ended in January 2017, at the latest, and this case was not commenced until February 7, 2020 more than three years later. The termination of plaintiff’s relationship with defendant—the demand for the return
of his files—starts the applicable limitations period (Mitschele, 36 AD3d at 253). “

Two international sophisticated insurance entities engage in multi-million dollar insurance-reinsurance agreements.  What could go wrong?  White Rock Ins. Co. PCC Ltd. v Lloyd’s Syndicate 4242
2021 NY Slip Op 31675(U)  May 18, 2021 Supreme Court, New York County Docket Number: 652867/2020 Judge: Andrew Borrok illustrates how court view arbitration and the deference paid to it.

“The parties previously engaged in an arbitration (the Prior Arbitration) that commenced on March 1, 2019 (NYSCEF Doc. Nos. 13-27). The following three issues were submitted to the Prior Arbitration panel: (1) whether White Rock was liable to the Syndicate under the Reinsurance Agreement for the full amount of its exposure in respect of subject Loss Occurrences or whether its liability was limited to the amount in the trust, (2) whether White Rock was required to “claw-back” collateral to top-up the trust account to the current reserve positions, and (3) whether the principles of equitable estoppel barred the Syndicate from prevailing on its claim.”

“A review of the Prior Arbitration record (see NYSCEF Doc. Nos. 13-27), and as discussed above, makes clear that the provisions of Article 14 of the Trust Agreement – which are at the core of the instant action – were clearly considered and litigated as part of the Prior Arbitration
(e.g., NYSCEF Doc. No. 15 at 8; NYSCEF Doc. No. 18 at 3, 24). White Rock expressly raised these provisions in the Trust Agreement as one of several defenses to its liability under the parties’ Reinsurance Contract both in its memoranda and at the hearing (e.g., NYSCEF Doc. No. 18 at 2-4, 7-11, 24-26; NYSCEF Doc. No. 23 at 29-30). The fact that the Trust Agreement (contrary to the Reinsurance Agreement) lacked an arbitration clause is simply not material as the parties, and specifically White Rock, asked the Prior Arbitration panel to address both agreements in the Prior Arbitration. Having been unsuccessful in its arguments, White Rock cannot now have a second bite at the apple in this proceeding (Chapman Steamer Collective, LLC v KeyBank Natl Assn., 163 AD3d 760, 761 [2d Dept 2018] [party cannot relitigate any claim which was, could or should have been litigated in prior proceeding]; John Grace & Co., Inc. v Tunstead, Schecter & Torre, 186 AD2d 15, 19-20 [1st Dept 1992] [collateral estoppel and res judicata barred legal malpractice where, in prior fee action, plaintiff had alleged legal malpractice as a defense]). ”


One aspect of the professional – client relationship is the repetitive, year over year nature in which events keep recurring, and the work keeps being performed.  Helzen Assoc. LLC v Katz  2020 NY Slip Op 33508(U)
October 22, 2020 Supreme Court, New York County  Docket Number: 655561/2019 Judge: Carol R. Edmead is a case in which client pays a specific tax year after year only to find out that no tax need have been paid.  How far back can the accountants be liable?

“Plaintiff alleges that defendants erroneously advised plaintiff that it was liable for NewYork City unincorporated business tax (UBI), and plaintiff paid that tax in reliance upon defendants’ advice, as reflected in the returns prepared by defendants, starting with Helzen’ s incorporation in 2002. Plaintiff received refunds for the amounts of UBI tax paid for the years 2015 -2017, after the New York City Department of Finance (DOF) informed defendants that the UBI tax was not owed, and defendants filed Form 452, amending the returns for those three years. ”

“Defendant’s advice to Katz to write a letter in furtherance of plaintiff’s claims for refunds for the Prior Years constitutes advice on how to proceed and is some evidence of continuing representation with respect to the Prior Years.

While each annual tax return involves a separate contractual engagement, defendants have not presented sufficient evidence to demonstrate that they did not engage in any corrective or remedial services in connection with the overpayments in the Prior Years (see Lemle v Regen, Benz & MacKenzie, C.P.A ‘s, P.C., 165 AD3d 414, 415 [1st Dept 2018]). The statute of limitations is tolled under the continuous representation doctrine only for “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” (Booth v Kriegel, 36 AD3d at 314).

Plaintiff is entitled to discovery on the underlying issues, including whether defendants made any application for refunds or performed continuing services with respect to the Prior Years. “

Legal malpractice has a three-year statute of limitations.  While that seems like a long time, litigation can take forever, and often clients try to fix the problem before suing their attorney.  Sometimes they are required to try to fix things, sometimes not.  Ray-Roseman v Lippes Mathias Wexler Friedman, LLP  2021 NY Slip Op 04841 Decided on August 26, 2021 Appellate Division, Fourth Department shows how one can demonstrate continuing representation.

“Ronald L. Roseman, who resided in Florida prior to his death, was advised by his Florida attorney about a business opportunity that involved him investing in a struggling power plant in Niagara Falls, New York. Defendants were engaged as New York counsel in June 2014 to prepare loan documents between the Ronald L. Roseman Revocable Trust (Roseman Trust) and the borrowers, who were owners and officers of the power plant. In July 2015, the borrowers defaulted on the loan. In August 2015, defendants commenced a foreclosure action on behalf of the Roseman Trust in Supreme Court, Niagara County, and represented the Roseman Trust until sometime in August 2016.

The statute of limitations for a legal malpractice claim is three years (see CPLR 214 [6]; McCoy v Feinman, 99 NY2d 295, 301 [2002]). Here, plaintiffs correctly concede that defendants [*2]met their initial burden of establishing that the malpractice claim insofar as it related to the 2014 loan transaction was commenced beyond the three-year statute of limitations (see generally Rider v Rainbow Mobile Home Park, LLP, 192 AD3d 1561, 1561-1562 [4th Dept 2021]; U.S. Bank N.A. v Brown, 186 AD3d 1038, 1039 [4th Dept 2020]). Thus, the burden shifted to plaintiffs to raise a triable issue of fact whether “the statute of limitations was tolled or otherwise inapplicable, or whether . . . plaintiff[s] actually commenced the action within the applicable limitations period” (U.S. Bank N.A., 186 AD3d at 1039 [internal quotation marks omitted]; see generally Rider, 192 AD3d at 1562).

We conclude that plaintiffs, in opposition, raised a triable issue of fact whether the continuous representation doctrine applied to toll the statute of limitations with respect to the malpractice claim insofar as it related to the 2014 loan transaction (see generally Carbone v Brenizer, 148 AD3d 1806, 1807 [4th Dept 2017]). The continuous representation doctrine tolls the limitations period “where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim” (McCoy, 99 NY2d at 306), and ” ‘where the continuing representation pertains specifically to [that] matter’ ” (International Electron Devices [USA] LLC v Menter, Rudin & Trivelpiece, P.C., 71 AD3d 1512, 1513 [4th Dept 2010], quoting Shumsky v Eisenstein, 96 NY2d 164, 168 [2001]). Here, plaintiffs submitted communication between the Florida attorney and defendants in which the Florida attorney indicated that defendants’ role as New York counsel included “enforcement” of the 2014 loan transaction documents. Moreover, the 2014 loan transaction and the foreclosure proceedings were close in time, as evidenced by plaintiffs’ submission of defendants’ supplemental billing invoices for legal services, which demonstrated a representation from the loan transaction to the foreclosure proceeding without a break. Thus, we conclude that questions of fact exist regarding the extent of defendants’ representation of plaintiffs and, more specifically, whether “enforcement” of the loan documents contemplated a continued representation until the loan was paid in full and the transaction completed.”

We sometimes wonder how people agree to unusual methods of accomplishing very ordinary tasks.  How many apartments have been purchased and sold using the traditional contract, price, payment and transfer?  Why monkey with it?

Alskom Realty, LLC v Baranik  2020 NY Slip Op 07153 [189 AD3d 745]
December 2, 2020 Appellate Division, Second Department is the story of trying to re-invent the wheel.  It want asunder.  A lawsuit against the accountant did not progress very well, either.

“The plaintiffs allege accounting malpractice in connection with the defendants’ preparation of a federal income tax return for the year 2007. They claim that the tax return included incorrect information relating to the sale of a condominium apartment to nonparty David Segal, on the ground that they never received the balance of the purchase price at the closing.

The plaintiffs claimed that they transferred title at the closing because Segal promised that he would immediately resell the apartment to another buyer for a profit and that he would then pay the remainder of the purchase price. Thereafter, Segal claimed he paid the purchase price with pieces of artwork from his company. The question of whether the purchase price was in fact paid became the subject of a separate action in the Supreme Court, New York County (hereinafter the New York County action), which was dismissed based upon the statute of frauds, because the plaintiffs did not produce the contract of sale (see Komolov v Segal, 40 Misc 3d 1228[A], 2013 NY Slip Op 51339[U] [Sup Ct, NY County 2013], affd 117 AD3d 557 [2014]).

In preparing the 2007 tax return for the plaintiff Alksom Realty, LLC, the defendants listed a sales price of $4,100,000 for the apartment, a cost basis of $3,564,946, and a capital gain of $535,054. The defendants claim that after the individual plaintiff, Alexander Komolov, and Segal informed the defendants of the transaction, Segal provided a handwritten statement, which stated a [*2]purchase price of $4,100,000 and certain costs.

In 2013, the accountants filed an amended 2007 federal income tax return, but the amended return was rejected as untimely.”

“In order to succeed on a claim for accounting malpractice, a plaintiff must demonstrate a departure from accepted standards of practice and that the departure was a proximate cause of injury (see KBL, LLP v Community Counseling & Mediation Servs., 123 AD3d 488 [2014]; Kristina Denise Enters., Inc. v Arnold, 41 AD3d 788 [2007]; D.D. Hamilton Textiles v Estate of Mate, 269 AD2d 214 [2000]; Estate of Burke v Repetti & Co., 255 AD2d 483 [1998]). Injury is an element of the cause of action (see KBL, LLP v Community Counseling & Mediation Servs., 123 AD3d at 488). No injury was established here. The 2007 tax return was not the basis for the dismissal of the New York County action, which sought recovery of the allegedly unpaid purchase price; rather, that action was dismissed for failure to produce the contract of sale. The plaintiffs did not demonstrate on their motion that the purchase price was never in fact paid with artwork. Further, there is no evidence in this record of increased tax liability.

The capital gain reported in the 2007 return in the amount of $535,054 indicated that the defendants used a cost basis for the calculation. Komolov informed the defendants of the transaction, and did not indicate that the purchase price had not been paid. The record does not indicate whether Segal provided the information in issue without the plaintiffs’ consent.

Further, the affirmation of the plaintiffs’ attorney did not provide evidence in admissible form of whether the defendants complied with acceptable accounting standards. The attorney did not purport to be an expert in standards of accounting practice.

Therefore, the plaintiffs failed to establish their entitlement to judgment as a matter of law on the issue of liability. Accordingly, their motion for summary judgment on the issue of liability on the causes of action to recover damages for accounting malpractice should have been denied. We remit the matter to the Supreme Court, Kings County, for further proceedings on the motions that were denied as academic in light of the court’s determination granting the plaintiff’s motion for summary judgment.”