NY: Tolling the Statute of Limitations for Legal Malpractice Actions
Leffler v. Mills, 285 A.D.2d 774 (3 Dept. 2001)
Underlying NY Probate Action
Student Contributor: Marina Kritikos
Facts: Plaintiffs were beneficiaries of a will. They had hired the defendant attorney to probate the will. As part of his duties, the attorney paid state estate taxes due by the beneficiaries, but failed to timely pay the federal taxes due. Although the attorney then secured an extension to pay the federal taxes by January 1, 1995, he failed to actually make the payment until November 6, 1995. As a result, the Internal Revenue Services charged penalties and interest in the amount of $158,853.33 to the estate. Plaintiffs subsequently discharged the attorney, and in December 1998, brought an action for legal malpractice. Both Plaintiffs and the defendant attorney filed motions for summary judgment. The trial court ruled in favor of the Plaintiffs, and the attorney appealed that ruling.
Issue: Did the lower court correctly grant Plaintiffs’ motion for summary judgment in light of New York’s three-year statute of limitation for the filing of legal malpractice actions?
Ruling: The lower court erred in granting Plaintiffs’ motion for summary judgment. There is a three-year statute of limitations for legal malpractice actions which may be tolled if there is “ clear indicia of an ongoing continuous, developing, and dependent relationship between the client and the attorney.” The Supreme Court of New York, Appellate Division, Third Department, found the evidence to be insufficient to establish a continuing relationship as a matter of law, despite the fact that the attorney was listed as “attorney of record” for the estate on an accounting dated January,1996 and federal and state estate income tax returns dated April, 1996.
Lesson: Although the court will toll the three-year statute of limitations for legal malpractice actions, the extension will only be granted where there exists clear, unequivocal evidence of an ongoing attorney-client relationship and continued dependence and reliance on the attorney with regard to the matter that was, purportedly, negligently handled.
I believe this decision is very sensible and fair. There should not be a standard set by the courts, that would essentially leave an attorney susceptible to a malpractice lawsuit years after there representation has ended unless it fits into the carved out exception. The court's decision seems to prevent the attorney from being liable to a client years down the road when they decide they were not happy or they realized by subsequent events that the attorney committed malpractice. I am not sure that a continued relationship should be the only requirement though. Also, does it have to be a continued relationship on the matter in question or on any matter with the attorney?
I agree with this holding. I think for the SOL to be tolled, there needs to be a clear showing of a continued relationship. If there is not, it gives rise for plaintiffs to perhaps go to the lawyer some time after the representation to extend the statute of limitations. This bright line rule does not seem hard to follow and should not really harm plaintiffs because if they can prove a continued relationship, then they can toll the SOL.
I also agree with the court's holding here. It makes sense to only toll the statute of limitations when there's a continued relationship with the attorney. But I'm in agreement with Mr. Lieberman that I would think that there should be more than just a continued relationship. I do think that it should be related to the matter in question.
I also agree with the court's holding. But I am a little hesitant in the bright line rule application of this holding because plaintiffs can "conveniently" remain in contact in the "ongoing litigation" in order to allow them to the too the statute of limitations. This may be a cynical approach to the holding of this case, yet I do think there is the possibility of abuse.