Opinion
10-18-2016
Roy E. HAHN, et al., Plaintiffs–Appellants, v. The DEWEY & LEBOEUF LIQUIDATION TRUST, et al., Defendants–Respondents.
Bainton Law Group PLLC, New York (J. Joseph Bainton of counsel), for appellants. Brown Rudnick LLP, New York (James W. Stoll of counsel), for The Dewey & LeBoeuf Liquidation Trust, respondent. Proskauer Rose LLP, New York (David M. Lederkramer of counsel), for Proskauer Rose LLP, respondent. Munger, Tolles & Olson LLP, Los Angeles, CA (Bruce Abbott of the bar of the State of California, admitted pro hac vice, of counsel), for Sidley Austin LLP, respondent.
Bainton Law Group PLLC, New York (J. Joseph Bainton of counsel), for appellants.
Brown Rudnick LLP, New York (James W. Stoll of counsel), for The Dewey & LeBoeuf Liquidation Trust, respondent.
Proskauer Rose LLP, New York (David M. Lederkramer of counsel), for Proskauer Rose LLP, respondent.
Munger, Tolles & Olson LLP, Los Angeles, CA (Bruce Abbott of the bar of the State of California, admitted pro hac vice, of counsel), for Sidley Austin LLP, respondent.
FRIEDMAN, J.P., ANDRIAS, SAXE, FEINMAN, KAHN, JJ.
Order, Supreme Court, New York County (Eileen Bransten, J.), entered August 6, 2015, which, to the extent appealed from as limited by the briefs, dismissed the amended complaint as time-barred, unanimously affirmed, without costs.
In their 2014 complaint, plaintiffs allege, inter alia, legal malpractice in connection with the defendant law firms' erroneous tax advice, which plaintiffs relied upon to their detriment when, in 2012, the Internal Revenue Service assessed promoter penalty fines in excess of $7 million for failure to register a tax shelter, and denied plaintiffs any protection under the “safe harbor” provisions of IRS Code § 6707.
Supreme Court properly dismissed the complaint as time-barred under the three year statute of limitations applicable to professional malpractice claims (CPL 214[6] ). “A legal malpractice claim accrues ‘when all the facts necessary to the cause of action have occurred and an injured party can obtain relief in court’ ” (McCoy v. Feinman, 99 N.Y.2d 295, 301, 755 N.Y.S.2d 693, 785 N.E.2d 714 [2002], quoting Ackerman v. Price Waterhouse, 84 N.Y.2d 535, 541, 620 N.Y.S.2d 318, 644 N.E.2d 1009 [1994] ). Here, defendants established that the causes of action alleging legal malpractice accrued in 2000–01, when they issued opinion letters and rendered advice that plaintiffs were not required to register a tax shelter (see Ackerman, at 541–543, 620 N.Y.S.2d 318, 644 N.E.2d 1009 ; Landow v. Snow Becker Krauss, P.C., 111 A.D.3d 795, 796, 975 N.Y.S.2d 119 [2d Dept.2013] ). Although plaintiffs claim not to have discovered that this advice was incorrect until years later, “ ‘[w]hat is important is when the malpractice was committed, not when the client discovered it’ ” (McCoy v. Feinman, 99 N.Y.2d at 301, 755 N.Y.S.2d 693, 785 N.E.2d 714, quoting Shumsky v. Eisenstein, 96 N.Y.2d 164, 166, 726 N.Y.S.2d 365, 750 N.E.2d 67 [2001] ). Therefore, since the plaintiffs did not commence this action until March 2014, more than three years after their claims for legal malpractice accrued, the complaint was properly dismissed as time-barred.
Contrary to plaintiffs' argument, the special facts doctrine is inapplicable. The doctrine generally applies to claims of fraud in sales transactions (Jana L. v. West 129th St. Realty Corp., 22 A.D.3d 274, 277, 802 N.Y.S.2d 132 n 2 [1st Dept.2005] ). Further, at the time defendants rendered erroneous tax advice, neither the applicable statute of limitations nor precedent establishing the accrual date of malpractice claims (see Ackerman, supra ) were peculiarly within defendants' knowledge (Jana L., at 278, 802 N.Y.S.2d 132 ), and that same information could have been discovered by plaintiffs through the exercise of ordinary intelligence (id. ).