Tag Archives: legal malpractice

Red Zone LLC v Cadwalader, Wickersham & Taft LLP,

118 A.D.3d 581, 988 N.Y.S.2d 588 [1st Dept., 2014], lv. app. gtd., ___ NY3d ___, ___ NYS2d ___, 2014 N.Y. Slip Op. 90722 [2014]
This the third of a three-part series of recent cases illustrating the continuous representation toll in legal malpractice actions. Here, the period of representation was held to continue despite the completion of the specific task for which the defendant firm had been hired, and the passage of some two years before the next consultation between the client and the firm. It also illustrates the specific rationale for the rule: the client looked to the firm to attempt to avoid or ameliorate the effects of the alleged malpractice.
When plaintiff attempted a takeover bid for Six Flags, Inc., its financial advisor was UBS Securities LLC. The defendant law firm had represented plaintiff in its negotiations with UBS, and drafted an agreement which aimed, in part, at capping UBS’s fees. Plaintiff wanted to cap UBS’ fees at $2 million unless it was successful in obtaining more than 51% of Six Flags’ voting shares. It thought the agreement did that, but UBS successfully sued plaintiff for $10 million in fees. When that action reached the First Department, the court rejected the argument that the agreement capped the fee.
The agreement was drafted and executed in 2005. There were no consultations between the plaintiff and the defendant firm from then until 2007, when it became involved in the litigation between plaintiff and UBS. Defendant, although it did not represent plaintiff in the litigation with UBS, continued to render legal advice during the course of the litigation, conferring with plaintiff and its trial counsel and sharing documents. The court viewed this relationship as defendant’s attempt to correct its malpractice in drafting an ambiguous agreement by preventing UBS from demanding and receiving a fee in excess of $2 million. That being so, the continuous representation doctrine applied and tolled the limitations period.
The fact of the two-year gap in representation did not rule out a continuing representation, as there was no need for plaintiff to consult with defendant during that period, and the defendant firm did not notify the plaintiff that the representation had ended.

Farage v Ehrenberg, ___ AD3d ___,

996 NYS2d 646, 2014 NY Slip Op 07977 [2d Dept., 2014]

This is the second in a three-part series concerning the continuous representation toll in legal malpractice cases. The issue here was where to fix the end of the representation, and hence the end of the toll and the commencement of the limitations period. The precise question was whether the representation necessarily extended until the date a Change of Attorney form was filed, or whether it had ended at some earlier date. The Court held that the determination was fact-specific, but that an earlier date could indeed be established, and an earlier date had in fact had been established here. The action was therefore dismissed as time-barred.

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24 N.Y.3d 320, ___ NYS2d ___, 2014 NY Slip Op 07291 [2014]
            The litigation over the estate of Sylvan Lawrence lasted twenty-two years, from 1983 to 2005. The opposing sides were the decedent’s widow and children, and his executor, his former business partner. Fifteen years into the litigation, the decedent’s widow made gifts of over a million dollars each to three of the partners of the firm representing her and her children, and of $400,000 to the firm itself. At the end of the litigation, the widow sought to compel the attorneys to return the gifts. The attorneys raised the defense of limitations, and the widow relied on the continuous representation toll to avoid it.

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