This is an Appellate Division 1st Department case, in accountant malpractice, not legal, but the lesson is similar.  No continuous representation, as each tax year was different, staute of limitations lost on the malpractice, but fraud causes of action still permitted.

Mitschele, plaintiff-appellant v. Schultz, defendants-respondents

APPELLATE DIVISION
FIRST DEPARTMENT

"However, the fraud cause of action should not have been dismissed. Plaintiff alleges that in addition to committing malpractice by arranging her compensation and her declaration of earnings on her tax returns in a certain fashion, defendants committed fraud by falsely telling her this arrangement was "the absolute best way to do it" and "the way it’s got to be." It is asserted that this misrepresentation was made to her not in an effort to serve her interests, but for the sole benefit of Triad Corp., so as to allow the corporation to avoid certain payroll taxes and other taxes and expenses. Plaintiff asserts she relied on Schultz’s false assurances that her compensation had to be paid in this manner, and that she did not seek the advice of another accountant until March of 2001, when Schultz told her he could no longer handle her accounting or tax matters in view of her termination from Triad, and only upon consulting another accountant did she become aware of the falsity of their statements and of their malfeasance.

We reject the contention that plaintiff’s fraud claim must be dismissed as untimely because it is not "separate and distinct from the customary cause of action for malpractice" (see LaBrake v. Enzien, 167 AD2d 709, 711 [1990]). The La Brake case discussed the type of scenario in which an attorney commits legal malpractice by failing to properly commence a lawsuit, and then lies to the client with assurances that the matter is underway, and claims for both malpractice and fraud are interposed. The court there reiterated that "a defendant’s concealment or failure to disclose his own malpractice without more does not give rise to a cause of action for fraud or deceit separate and distinct from the customary malpractice action" (167 AD2d at 711). It looked to the case of Simcuski v. Saeli (supra), a case of physician malpractice followed by the physician’s concealment of the malpractice, with regard to the elements that must be established to prove a cause of action for fraud separate from the malpractice claim, concluding that without damages separate from those arising from the malpractice, a fraud claim is not made out (167 AD2d at 711-712).

Here, however, defendants’ alleged fraud is not simply the failure to disclose the malpractice based upon accounting errors. Rather, defendants are alleged to have perpetrated a fraud on plaintiff from the time they were retained to provide accounting services, in failing to disclose their concern with protecting the interests of another entity, namely, plaintiff’s employer.

The elements of a fraudulent concealment claim – concealment of a material fact which defendant was duty-bound to disclose, scienter, justifiable reliance, and injury (see Kaufman v. Cohen, 307 AD2d 113, 119 [2003]; and see Ozelkan v. Tyree Bros. Envtl. Servs., Inc., 29 AD3d 877 [2006]) – are all sufficiently pleaded by the claims which may be properly gleaned from the complaint: that defendants failed to inform plaintiff of their conflicted interests, despite their professional obligation to make such disclosure, inducing plaintiff to retain them and rely on their advice in the belief that defendants had undertaken to provide professional advice in her best interests. The incorrect advice and improper income declarations, which form the substance of the malpractice claim, constitute merely a portion of the factual predicate for the fraud claim. The fraud claim depends primarily on defendants’ failure to disclose their divided loyalties, and plaintiff’s justifiable reliance on their ability conscientiously to give her advice serving her own best interest, while the improprieties in the tax returns merely help to establish that plaintiff was injured and assess the extent of her injury.

As this Court said in Serio v. PricewaterhouseCoopers LLP (9 AD3d 330, 331 [2004]), when reinstating a fraud claim despite the prior dismissal, as time-barred, of accounting malpractice and related claims based upon the same professional relationship, fraud may still be "viable irrespective of whether some of the alleged acts and misrepresentations were mentioned in connection with the untimely causes of action sounding in professional malpractice."

Since plaintiff’s fraud cause of action is not merely a malpractice claim with a claim for concealment of malpractice superimposed on it, the parallel nature of the damages is not determinative of whether the fraud claim is governed by the shorter statute of limitations.

We are cognizant of the Court’s concern, expressed in Simcuski v. Saeli (supra), that we guard against permitting a fraud claim which is actually "subjecting [a professional] to greater exposure to liability [than the Legislature intended] in consequence of errors of professional judgment" (44 NY2d at 453). Here, however, since the fraud claim is not based simply upon errors in professional judgment, but is also "predicated on proof of the commission of an intentional tort" (id.), reinstating plaintiff’s claim of fraud is not contrary to legislative intention. "

Here is a law school problem:  Mom, Dad and Kid are riding along and are hit from the side by another car.  How many conflicts of interest can you find in this picture?  None of the attorneys representing plaintiffs, defendants, counterclaimants or counterclaimant defendants found a single problem, but the court determined that there were too many conflicts between mother driver, father owner, daughter passanger, mother counterclaim defendant, etc, to count.  At one point, the mother was arguing that her daughter had no serious physical injury as defined by the insurance law.

Here is the case cite:  Dorsainvil v. Parker, 3629/04
Decided: November 21, 2006

KINGS COUNTY

 

OK, so here is the story.  Doctor and family is in a car crash.  Doctor and family successfully sue for $10 million.  However, he now sues his attorney because it all sort of  got frittered away.  There was the limit on the other car’s coverage, there were the trust deposits for the kids, there was the bad faith litigation.  Analysis?  The attorney did a strong job at trial, and a poor job at communicating the complexities of trial and judgment law.  Now comes the legal malpractice litigation.  The story.

We have never heard of this before, but apparently its a movement.  Unbundled legal services are proceeding under a Mass program where an attorney represents a client in only one appearance, or for a small, singular issue, without taking over representation as a whole.  We have reservations about what happens when the case goes sour.  The article.

The "Anti-Divorce’" attorney has posted a site which trolls for legal malpractice cases.  His pitch?  He sues attorneys who settle divorce cases without the client’s permission, when the client really wants to stay married.  Don’t clients have to allocute to the settlement in open court?  Anyway, the site.

Here is an example of how attorney fee cases lead to a plethora of work, trouble, litigation, and a very slim chnace of making any money.  Attorney represents client in California case.  Client does not pay $ 4000 in legal fees.  Attorney sues client for $ 4000.  Client has a NY attorney friend, who will defend him, but needs to be admitted pro haec vice. Why the client needed a NY attorney to come to California is unclear.  Client will not be deposed until NY attorney comes to California, and his case is dismissed.  Attorney sues for malicious prosecution, and client counters with an anti-SLAPP suit, which here is undefined.  SLAPP is a California statute which allows dismissal of retalitory lawsuits.

Now clients loses the anti-SLAPP.  How much work and risk has gone on for this original $ 4000?  Read the article.