Lavelle-Tomko v. Aswad & Ingraham

191 A.D.3d 1142

143 N.Y.S.3d 109

Kathleen LAVELLE-TOMKO, Appellant,

v.ASWAD & INGRAHAM et al., Respondents.

531639

Supreme Court, Appellate Division, Third Department, New York.

Calendar Date: January 5, 2021

Decided and Entered: February 18, 2021

Michaels & Smolak, PC, Auburn (Michael G. Bersani of counsel), for appellant.

Costello, Cooney & Fearon, PLLC, Syracuse (Paul G. Ferrara of counsel), for respondents.

Before: Garry, P.J., Clark, Aarons, Pritzker and Colangelo, JJ.

MEMORANDUM AND ORDER

Garry, P.J.

Appeal from an order of the Supreme Court (McBride, J.), entered May 4, 2020 in Broome County, which, among other things, granted defendants' motion for summary judgment dismissing the amended complaint.

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 A.D.3d 1210, 1210, 985 N.Y.S.2d 746 [2014], lv denied 26 N.Y.3d 907, 2015 WL 5553518 [2015] ). Aswad's representation ended on September 24, 2015, after exhausting all appeals in the second action.

Plaintiff commenced this legal malpractice action on October 25, 2016, focusing on Aswad's failure to clarify the meaning of "surrender" in the settlement agreement. After the note of issue was filed, defendants moved for summary judgment dismissing the amended complaint. Plaintiff cross-moved to dismiss most of the affirmative defenses and for leave to amend her amended complaint to add a cause of action pursuant to Judiciary Law § 487. Finding that the malpractice action was time-barred, Supreme Court granted defendants' motion for summary judgment dismissing the amended complaint and denied the cross motion as moot. Plaintiff appeals.

"An action to recover damages arising from legal malpractice must be commenced within three years after accrual" ( Zorn v. Gilbert, 8 N.Y.3d 933, 933–934, 834 N.Y.S.2d 702, 866 N.E.2d 1030 [2007] [citation omitted]; see CPLR 214[6] ), which occurs at the time of the injury and not at the time that the injury is discovered (see McCoy v. Feinman, 99 N.Y.2d 295, 301, 755 N.Y.S.2d 693, 785 N.E.2d 714 [2002] ). In seeking to obtain dismissal of the action based on the statute of limitations, defendants bore the initial burden of demonstrating that the time within which to commence had expired, including establishing the date that the cause of action accrued (see Matter of Steinberg, 183 A.D.3d 1067, 1070, 124 N.Y.S.3d 98 [2020] ; Haynes v. Williams, 162 A.D.3d 1377, 1378, 79 N.Y.S.3d 365 [2018], lv denied 32 N.Y.3d 906, 2018 WL 4997517 [2018] ; Krog Corp. v. Vanner Group, Inc., 158 A.D.3d 914, 915, 72 N.Y.S.3d 178 [2018] ). If defendants met that initial burden, "the burden then shift[ed] to ... plaintiff to raise a question of fact as to whether the statute of limitations has been tolled or was otherwise inapplicable" ( Krog Corp. v. Vanner Group, Inc., 158 A.D.3d at 916, 72 N.Y.S.3d 178 [internal quotation marks and citations omitted]; see International Electron Devices [USA] LLC v. Menter, Rudin & Trivelpiece, P.C., 71 A.D.3d 1512, 1512, 898 N.Y.S.2d 388 [2010] ).

Defendants demonstrated, and plaintiff does not dispute, that her cause of action accrued on August 19, 2007, the date that she executed the settlement agreement in the first action. Plaintiff commenced this action on October 25, 2016, more than nine years after accrual and well beyond the three-year statute of limitations (see CPLR 214[6] ). Defendants thus met their initial burden on their motion for summary judgment based on that defense (see Haynes v. Williams, 162 A.D.3d at 1378, 79 N.Y.S.3d 365 ). The burden then shifted to plaintiff to demonstrate that the statute of limitations was tolled or otherwise inapplicable, or at least that there is a question of fact to prevent summary judgment to defendants on that issue. Similarly, on the portion of plaintiff's cross motion seeking dismissal of defendants' statute of limitations defense, plaintiff had to prove as a matter of law that her action is not time-barred (see Red Zone LLC v. Cadwalader, Wickersham & Taft LLP, 27 N.Y.3d 1048, 1049–1050, 34 N.Y.S.3d 397, 54 N.E.3d 69 [2016] ).

To meet her burden, plaintiff primarily relies on the continuous representation doctrine. "This doctrine applies where there is continuing trust and confidence in the relationship between the parties and the attorney's continuing representation pertains to the specific matter in which the attorney committed the alleged malpractice, not merely the continuity of a general professional relationship" ( Deep v. Boies, 53 A.D.3d 948, 950, 863 N.Y.S.2d 269 [2008] [internal quotation marks and citations omitted]; see McCoy v. Feinman, 99 N.Y.2d at 306, 755 N.Y.S.2d 693, 785 N.E.2d 714 ; Shumsky v. Eisenstein, 96 N.Y.2d 164, 168, 726 N.Y.S.2d 365, 750 N.E.2d 67 [2001] ; Deep v. Boies, 121 A.D.3d 1316, 1318, 995 N.Y.S.2d 298 [2014], lv denied 25 N.Y.3d 903, 2015 WL 1526052 [2015] ). "The continuous representation doctrine tolls the statute of limitations where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim" ( Zorn v. Gilbert, 8 N.Y.3d at 934, 834 N.Y.S.2d 702, 866 N.E.2d 1030 [internal quotation marks, ellipsis and citations omitted]). "For the continuous representation doctrine to apply to an action sounding in legal malpractice, there must be clear indicia of an ongoing, continuous, developing, and dependent relationship between the client and the attorney, which often includes an attempt by the attorney to rectify an alleged act of malpractice" ( International Electron Devices [USA] LLC v. Menter, Rudin & Trivelpiece, P.C., 71 A.D.3d at 1512–1513, 898 N.Y.S.2d 388 [internal quotation marks, ellipsis, brackets and citations omitted]; see Leeder v. Antonucci, 174 A.D.3d 1469, 1471, 106 N.Y.S.3d 490 [2019] ; see also Matter of Lawrence, 24 N.Y.3d 320, 342–343, 998 N.Y.S.2d 698, 23 N.E.3d 965 [2014] ; Creative Rest., Inc. v. Dyckman Plumbing & Heating, Inc., 184 A.D.3d 803, 805, 126 N.Y.S.3d 498 [2020] ).

Plaintiff submitted the retainer agreement from the first action in which A & I agreed to represent plaintiff "in all proceedings arising from allegations against [her] concerning voice mail and related allegations by [Century 21] or any others currently unknown." Plaintiff also submitted a letter of engagement dated July 27, 2007 in which A & I agreed to represent plaintiff in "[l]itigation involving [Century 21], et al against [plaintiff]." Although the settlement agreement in the first action was signed in August 2007, the record contains proof that defendants handled a court appearance and filed a stipulation of discontinuance in October 2007, obtained certifications from plaintiff's accountant and supplied them to the Sbarras as required by the settlement agreement, corresponded with other attorneys and reviewed documents regarding plaintiff's surrender of her license to the Department through early 2008. They also worked four days in August and September 2008 in connection with plaintiff's payoff of a note and mortgage that she obtained to meet her obligations under the settlement agreement. When Aswad received the cease and desist letter in February 2010, he communicated with plaintiff and agreed to respond on her behalf. Although no new retainer agreement or letter of engagement was signed for the second action, defendants acknowledge that they were the attorneys of record for plaintiff in that action. Defendants' time records show that they used the same file number for their work on plaintiff's behalf during the first action, after the settlement agreement was signed and during the...