Opinion
0030120/2005.
May 10, 2007.
DOLLINGER, GONSKI GROSSMAN, Carle Place, NY, Attorneys for Plaintiff.
WILSON, ELSER, MOSKOWITZ, EDELMAN DICKER LLP, By: Brett A. Scher, Esq., Timothy Eskridge, Esq., Jerry Garguilo, New York, New York, Attorneys for Defendant.
BOUNDAS, SKARZYNSK1, WALSH BLACK, LLC, Garguilo Orzechowski, LLP, and Stanley E. Orzechowski, One Battery Park Plaza, New York, NY, Attorneys for Defendants.
This action sounding in legal malpractice arises from the alleged representation of plaintiff, Frederick Rehberger, by the defendant law firm.
Defendant Jerry Garguilo's assertion that he was never personally served with a summons and complaint is unavailing. Pursuant to CPLR 308(2), service was made by delivery to Garguilo's former partner and codefendant here, Stanley E. Orzechowski. On the date in question, Garguilo and Orzechowski shared office space located at 542 No. Country Rd., St. James, NY. They each had their own secretary. It is not disputed by Garguilo that he was served pursuant to CPLR 308(2), in that Orzechowski was in the shared common area of their offices located at the above address. The process server handed Orzechowski the documents in that area, i.e., where the secretaries for both attorneys maintained their desks. Clearly, such service was appropriate under the statute. While Mr. Ozechowski is no longer in partnership with Mr. Garguilo, he is certainly a "person of suitable age and discretion at the actual place of business", that the statute contemplates. Further, it docs not appear that defendant's office was designated as an independent office in the property address or otherwise held out as a distinguishable unit. Accordingly, that branch of the motion to dismiss for lack of personal jurisdiction of defendant Garguilo is denied.
Defendants also claim that the action should be dismissed as time barred. They assert that the date the claim accrued is May 3, 2001, the date that defendant Garguilo allegedly failed to send notices of plaintiff's intention to sell his interests to the individual shareholders. Since the action here was not commenced until December 23, 2005, the action is time barred.
Plaintiff opposes on the ground of continuous representation. Plaintiff argues that this theory toiled the statute of limitations due to the ongoing representation by the defendants.
A brief description of the underlying claim is warranted here. In 1987, the Mills-Muller-Wood Corp. and Richtberg and Rehberger, Inc. entered into a merger agreement to form a new corporation, MRW Group. Inc. (hereafter MRW). Plaintiff here, Rehberger held 25.668% of the shares of common stock of MRW. Four other individuals held the remaining shares. When Rehberger decided to retire upon attaining sixty years of age, he elected to sell his shares of stock to MRW pursuant to Article IV of the Stock Redemption Agreement.
Notice was sent by Rehberger's then attorneys, Forchelli, Curto, Scwartz, Minco, Carlino Cohn. LLP to the MRW Group and to an individual shareholder, Richard Richtberg. However, the Forchelli law firm did not send a notice to the remaining individual shareholders. The Forchelli firm commenced an action against MRW and the individual shareholders of the Group seeking a declaratory judgment establishing the value of the outstanding shares of common stock of MRW at $7,00.00(UK). After a motion to disqualify the Forchelli firm was granted, the firm of Garguilo Orzechowski was substituted on September 13, 2000.
On May 3, 2001, this Court (Emerson, J.) granted the motion by Rehberger for summary judgment against MRW Group. Partial summary judgment was also granted to the defendants there dismissing the complaint against the individual shareholders, after determining that the notice to sell only went to MRW.
Plaintiff here argues that defendants failed to correct the mistake of the Forchelli firm of only sending a notice to sell to MRW and Richtberg. Moreover, defendants failed to point out to Justice Emerson that the notice was in fact sent to Richtberg; defendants never filed a Notice of Appeal on plaintiff's behalf; and defendants did not move for leave to reargue or renew the cross-motion. As a result, plaintiff's rights against the individual shareholder Richtberg were extinguished.
Moreover, by order dated August 27, 2001, Justice Emerson modified her prior Order to the extent that any payments to the plaintiff from MRW would be limited to years in which a surplus was available for that purpose. Judgment was signed on November 8, 2001 and entered on November 20, 2001
On June 17, 2002, the Appellate Division, Second Department affirmed the order of Justice Emerson and remitted the matter for the entry of Judgment declaring the value of the outstanding shares of common stock of MRW Group to be $7,000,000.00. Proposed judgments were thereafter submitted but were unsigned.
On January 19, 2004, as part of an attempt to recover money from MRW, defendant law firm In Garguilo appeared at a deposition of the shareholder Richtberg. Pursuant to the order of Justice Emerson, this deposition was an effort by Rehberger to determine the financial viability of MRW, i.e., whether that company had surplus funds to pay Rehberger for his stock. Thereafter, defendants billed Rehberger for their legal services.
In light of the foregoing, plaintiffs here assert that defendants continued to represent plaintiff in the prior action until at least the calendar year 2004. Defendants counter that the representation in 2004 was unrelated to the underlying action.
A defendant who seeks dismissal of a complaint on the ground that it is barred by the statute of imitations bears the initial burden of proving, prima facie, that the time in which to sue has expired (See Duran v Mendez , 277 AD2d 348; Savarese v Shatz , 273 AD2d 219, 220; Assad v City of New York , 238 AD2d 456; Siegel v Wank , 183 AD2d 158, 159). Here, the defendants sustained their initial burden by offering evidentiary proof that the malpractice complained of occurred on May 3, 2001, and mat this action was not commenced until on or about December 23, 2005, after the expiration of the three-year limitations period (sec CPLR 214). The burden thus shifted to the plaintiff to aver evidentiary facts establishing that their cause of action falls within an exception to the statute of limitations, or to raise an issue of fact as to whether such an exception applies (sec Duran v Mendez , 277 AD2d 348 supra; Assad v City of New York , 238 AD2d 456 supra; Siegel v Wank , 183 AD2d 158 supra).
The cause of action under the doctrine of continuous representation does "not accrue until the attorney's representation concerning a particular transaction is terminated" ( Boorman v. Bleakley, Plan, Schmidt, Hart Fritz ), 88 AD2d 942). In determining the accrual of a of cause of action, the general rule is that a cause of action accrues when the act complained of occurs, not when the client discovers it. Sieqel v. Kranis , 29 AD2d 477.
The continuous representation doctrine recognizes that a person seeking professional assistance has a right to confidence in the professional's ability and good faith, and realistically cannot be expected to question and assess the techniques employed or the manner in which the services are rendered ( Shumsky v Eisenstein , 96 N.Y.2d 164. This doctrine reflects both the unfairness of requiring the injured client to challenge its professional advisor while remedial efforts arc under way ( see Borgia v City of New York , 12 NY2d 151) and the potential abuse where the negligent advisor attempts to avoid liability by diverting the client from bringing a legal action until the limitations period expires ( see Siegel v Kranis , 29 AD2d 477). To prevail under this theory requires that the continuous relationship be in connection with the particular matter from which the malpractice claim arose ( see McCoy v Feimnan , 99 NY2d 295; Pellati v Lite Lite , 290 A.D.2d 544; National Union Fire Ins. Co. of Pittsburgh v Davis, Wright, Todd, Reise Jones , 157 A.D.2d 571).
In light of the foregoing it is clear that the plaintiff has failed to demonstrate or provide evidentiary facts establishing that their cause of action falls within an exception to the statute of limitations, or to raise an issue of fact as to whether such an exception applies. Clearly, the deposition conducted in January 2004, was merely part of the attempt by Rehberger to determine whether MRW had surplus money and was not related to the underlying action.