Allmen v Fox Rothschild LLP

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Allmen v Fox Rothschild LLP 2012 NY Slip Op 30244(U) January 31, 2012 Sup Ct, NY County Docket Number: 101964/11 Judge: Manuel J. Mendez Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. ANNED ON 21212012 [* 1] SUPREME COURT OF THE STATE OF NEW YORK - NEW YORK COUNTY PRESENT: PART 13 Justlco DR. T A M ALLMEN, as Executor of the Estate of Renee Allmen, and Trustee of the Allmen Charltable Lead Trust, Plaintlff(s), MOTION DATE 12-7-201I -V- MOTION 9EQ. NO. FOX ROTHSCHILD LLP, 001 MOTION CAL. NO. Defendant(s) FOX ROTHSCHILD LLP, Thlrd-Party PlalntW(s), -V- FILED FRANKFURT KURNlT KLEIN 11 SEK, P.C., Thlrdhrty Ddmdrnt(8) , were read on thlo motion and cr s - m o & ~ d h h K ~ ~ U N CLERK S I~FT;ICE T Y The following papers, numbered I to 3 Dismlts: PAPERS NUMBERED Notlce of Motlonl Order to Show Cause Anrwerlng Affldavlts - Exhibits - Affldavlb - Exhibits ... cross motion 2 * Replying Affldavlts Cross-Motion: 1 Yes X No Upon a reading of the foregoing cited papers, It Is Ordered that defendant, Fox Rothschlld LLP s ( Fox ), motion to dlsmlss allegations that are tlme barred is granted. Pursuant to CPLR 321l(a)(5) all allegations based on conduct or omissions related to services provided by defendant to Renee Allmen ( Decedent ) are dismissed. Plaintiffs other allegations related to services performed by defendant on behalf of plalntlff as executor of the estate of the Decedent (the Estate ) are unaffected by thls rullng. In or around 2005, defendant formulated Decedent s estate plan, and drafted Decedent s Last Will and Testament (the Wlll ), which was executed on July 27,2005. Plaintiff alleges that certain provlslons of the Will, lncludlng certain tax allocation clauses drafted by defendant, needlessly and negllgently exposed the Estate to a danger of a signiflcantly Increased tax burden upon Decedent s death. None of the partles allege that any addltlonal services were provlded to Decedent by defendant after the Will was executed. J [* 2] Decedent dled on June 16, 2006. On June 27, 2006, plaintiff retained defendant to represent her as executor of the Estate through the execution of a letter of engagement (the Letter of Engagement ). The Letter of Engagement, which set forth the terms of the representation, was slgned by both parties. On or about September 17, 2007, defendant prepared and flled on behalf of plaintiff, as executor, the Federal Estate tax return and the New York State tax return (collectively, the Tax Returns ) for Decedent s Estate. On or about June of 2008, the IRS selected the Estate for a tax audit (the Audit ). Defendant represented the Estate in connection wlth the Audlt. Plaintiff alleges that defendant was negligent In their preparation of the Tax Returns whlch resulted In an Increased tax burden, interest, and tax penalties for the Estate. At the time of her death, Decedent maintained over twenty different brokerage and bank accounts at varlous flnanclal Institutions that listed both Decedent and plalntlff as account holders (the Accounts ). Plalntlff alleges that the negligence of the tax ailocatlon clauses drafted by defendant In the Will was compounded by defendant s negligence In the characterization of the Accounts when flling the Tax Returns. In preparlng the Tax Returns, Defendant classlfled the Accounts as joint accounts whlch plalntlff assumed sole control over upon Decedent s death rather than as part of the Estate. Since the Accounts were not included as part of the Estate, those funds could not be used to pay any of the debts, admlnlstratlve expenses or taxes of the Estate. The debts, administrative expenses, and taxes of the Estate had to be pald out of funds that would have otherwise gone to the Charitable Lead Trust ( CLT ) created In the Will. The reductlon In funds given to the CLT meant a decrease in the charitable tax deductlon available to the Estate. The decrease In Charitable deductlon further increased the tax liability for the Estate, whlch in turn reduced the funds given to CLT and the associated charitable deduction for the Estate. Plaintiff alleges that the Increased tax burden, Interest, and tax penalties are a direct result of the defendant s negligence O drafting the Will and preparlng n and flllng the Tax Returns. Plaintiff Initiated an action for legal malpractice and excessive billing In connection wlth defendant s rendering of legal services to Decedent and in connection with defendant s rendering of legal services to the plaintiff dlrectly. Plaintiff has standing to Initiate the action on behalf of the Estate under EPTL Sectlon I -3.2(b) due to her designation as executor for the Estate. Estate of I Schnelder v. Flnmann, 15 N.Y.3d 306,907 N.Y.S.2d I (2010). 19, A claim for attorney malpractice accrues when the malpractice I s committed, and must be Interposed wlthln three years thereafter. Shumsky v Elsensteln, 96 N.Y.2d 164,750 N.E.2d 67,726 N.Y.S.2d 365 (2001). The date at s whlch the client dlscovers the malpractlce I Irrelevant. Ackerman v. Prlce Waferhouse, 84 N.Y.2d 535,620 N.Y.S.2d 318, (1994). In thls motlon, defendant [* 3] is seeking to dismiss under CPLR 321I (a)(5) all allegatlons In plalntlff s amended complaint that are based on any conduct or omission alleged to have taken place In 2005, that is, defendant s representatlon of Decedent in the drafting of the Will. Defendant I assertlng that the statute of limltatlons has expired. s On a motion to dlsmlss an action as time-barred, the movlng party bears the initial burden of establlshlng prima facie that the time in whlch to sue has explred. The Will executed by defendant on behalf of Decedent is dated July 27,2006. Neither party has clalmed any additional services were provided to Decedent by defendant after the executlon of the Will. According to the papers submitted by both parties, the Decedent dled on June 15, 2006. On a motion to dismiss, a complalnt s factual allegations are presumed to be true and are accorded every favorable Inference. The statute of limitations on Decedent s claims of legal rnalpractlce agalnst defendant would therefore have explred no later than July of 2008, three years after the execution of the Will. The burden then shifts to the plaintiff to establish that the statute of llmltatlons was tolled. Cox v. Klngsboro Medical Group, 88 N.Y.2d 904,646 N.Y.S.2d 659, (1996). The plalntlff asserts two basis under which the statute of limitations was tolled, the doctrine of continuous representation and the tolllng agreement executed on or about October 2,2009, between plalntlff and defendant (the To1llng Agreement ). The doctrine of continuous representation recognizes that a person seeking professional assistance has a right to repose confidence In the professional s ability and good falth, and realistically cannot be expected to question and assess the techniques employed or the manner In whlch the services are rendered. The doctrine also appreciated the client s dilemma If requlred to sue the attorney whlle the latter s representation on the matter at issue is ongoing. Shumsky v. Hsentsteln, 96 N.Y.2d 164,726 N.Y.S.2d 365, (2001). The doctrine of continuous representation therefore tolls the statute of llmitatlons for wrongful acts or omissions related to the speclflc subject matter underlying the rnalpractlce claim until the ongoing representation is completed. Williamson ex re/. Lipper Convertibles, L.P. v. Prlcewaterhouse Coopers LLP, 9 N.Y.3d I, N.E.2d 872 842, (2007). Plalntlff asserts that defendant s representation of plalntlff as executor of the Estate tolled the statute of limitations on the Estate s rnalpractlce clalms. [Oln a motion addressed to the sufficiency of a complaint, the facts pleaded are presumed to be true and accorded every favorable Inference,...[however] allegations conslstlng of bare legal concluslons, are not entitled to such conslderatlon Tectrade lnt l Ltd. v. Fertlllzer Dev. & lnv., B.V., 258 A.D.2d 349, 686 N.Y.S.2d 236, (N.Y.A.D. Igt Dept., 1999). For the analysis of this motion to dlsmlss, the Court accords the plalntlff the favorable inference that the doctrine of contlnuous representation would toll the statute of limitations from the executlon of the Wlll until Decedent s death in June of 2006, though nelther side has asserted or offered proof substantlatlng this inference. [* 4] However, plaintiffs assertion that defendant s representatlon after Decedent s death constituted contlnuous representation is a bare legal conclusion unsupported by the facts. In the context of a legal malpractice action, the continuous representation doctrine tolls the [sltatue of [Ilimitations only where the continuing representation pertains specifically to the matter In whlch the attorney committed the alleged malpractlce. Shumsky v. Eisensfeln, supra. Courts have repeatedly found that the mere continuation of an attorney-cllent relationship was not enough to Invoke the doctrine of contlnuous representation. in the instant case, Decedent s death would have ended any assertlon that there could have been an understanding that the defendant would be called upon to revlse the Will or otherwlse continue their representatlon of Decedent. The executlon of the Letter of Engagement I objective proof that none of s the partles had an Understanding of contlnuous representation. In the Engagement Letter, plaintiff retained defendant to represent her as executor of the Estate. The dutles outllned In the Engagement Letter are dlstlnct from the defendant s duties In draftlng the Will. It was not until the Audlt, two years after Decedent s death and the executlon of the Engagement Letter, that there was any Indication that there might be a problem with the Will. Given [the Estate s] lack of awareness of a condition or problem warranting further representation and the fact that no course of representation was alleged, the purpose underlying the contlnuous representatlon doctrine would not be sewed by Its application here. Wllliamson ex re/. Llpper Convertlbles, L.P. v. Pr/cewaterhouse Coopers LLP, supra. m h e nature and scope of the parties retalner agreement (engagement) play a key role In determining whether contlnuous representation was contemplated by the partles. Id. The act of executing the Engagement Letter, and the terms of representation contained therein, contradict the bare legal assertion that the doctrine of contlnuous representation would toll the statute of limitations following Decedent s death. Without the application of the doctrlne of continuous representatlon to toll the statute of limitations beyond Decedent s death, the statute of limitations on malpractlce claims on any conduct or omission alleged to have taken place In 2006, that is, defendant s representation of Decedent in the drafting of the Wlll would have expired In June of 2009, prior to the executlon of the Tolllng Agreement. s s Accordingly, it I ORDERED that defendant Fox s motlon to dlsmlss I granted as to allegations based on conduct or omisslons alleged to have been committed In 2005 durlng defendant s representation of Decedent. Allegations based on defendant s conduct or omisslons alleged to have been committed durlng defendant s representation of plaintiff, as executor of the Estate, are unaffected by thls declslon, and It I further s [* 5] Ordered, that the parties are to appear for a preliminary conference in Part 13 at the courthouse located at 80 Centre Street, Room 307, New York, New York on March 7,2012, at 9:30 A.M. This constitutes the decision and order of this court. Dated: January 31, 2012 ~ MANUEL J. MENDEZ Check one: c FINAL DISPOSITION ] Check If appropriate: J-s.cm U E L J. MENDEZ X NON-FINAL DlSPOSlTlOk s. c. DO NOT POST c REFERENCE ] FER 0 2 2012 NEW YOHK COUNTY CLEW:, LIF;-I;;E

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