The Termination of the Attorney-Client Relationship In Legal Malpractice Cases
Problem situations do not simply go away. Difficult clients do not disappear if ignored. To the contrary, statistics demonstrate that 19% of all claims against attorneys are predicated upon a breakdown in client relations1. More importantly, the Departmental Disciplinary and Grievance Committees regularly address allegations of client neglect, often resulting in disciplinary action2. Too often, it is easy for the attorney to believe that "no news is good news." In the context of the attorney-client relationship, this is rarely the case.
The most efficient means of avoiding the problematic client or representation is to learn to "just say no" when it is clear a client seeks representation for other than legitimate motives, e.g., anger, greed, revenge; when a client cannot afford the representation sought; or when representation is sought in an area outside the attorney's expertise or geographic locale. Nevertheless, at one time or another, almost every attorney says "yes" to a representation that clearly should have been rejected. Once this occurs, attorneys tend to ignore both the client and the file. This "ostrich" approach can never result in a favorable outcome for either the client or the attorney. Rather than ignoring a file to the point where the client's interests are damaged, an attorney confronted with this problem should address the problem directly and, if possible, arrange for substitute counsel. If the client refuses to arrange for substitute counsel, rather than continue a cycle of neglect, an attorney should withdraw in a manner permitted by the Code of Professional Responsibility3 or the local tribunal.4 Properly documenting the termination of the attorney-client relationship, rather than letting the relationship drift away, actually benefits the client and provides the attorney with some much needed closure.
A Little History
While we all strive to practice in a manner so as to avoid claims, even the most careful attorneys may be subjected to claims by clients. In today's litigious climate, familiarity with the statute of limitations for professional malpractice should be the province of every attorney, not simply lawyers who represent lawyers. Five years ago, the New York State Legislature reiterated to the judiciary a principle which should have been evident by a plain reading of CPLR § 214(6): that the statute governing the period of limitations for malpractice claims against non-medical professionals, including claims against attorneys, is three years. Notwithstanding the unambiguous pre-amendment language, beginning in the late 1970s5 and culminating with the 1992 Court of Appeals decision in Santulli v. Englert, Reilly & McHugh, P. C.,6 the judiciary held that a six year statute of limitations applied to claims against a non-medical professional based upon an implied breach of the duty to use due care in the representation of a client.
Application of the 1996 Amendment
To counteract the judicial extension of the period of limitations, the 1996 amended statute clearly states that an action against an attorney, must be commenced within three years "regardless of whether the underlying theory is based in contract or tort."7 Given the legislature's stinging rebuke of the judiciary,8 it was speculated that the courts would have little incentive to apply the amendment retroactively. However, in Brothers v. Florence,9 the Court of Appeals acknowledged that the goal of the legislature in amending CPLR 214(6) was to immediately curtail application of a six-year period of limitations in non-medical malpractice cases and held that where a non-medical malpractice claim accrued prior to the September 4, 1996 effective date of the statute, the three year limitations period applied. Nevertheless, in deference to due process considerations, the Court of Appeals concluded that the amended statute permitted commencement of actions which accrued prior to September 4, 1996 within "the shorter of either the remaining time under the former six-year limitations period or one year from [the] amendment's effective date."10 For all intents and purposes, all claims accruing after September 4, 1996 are subject to the three year limitations period.
Accrual of a Malpractice Cause of Action
The manner in which this three year period is calculated, however, remains the subject of much litigation. Generally, the period of limitations runs from the time when the cause of action accrues. As with most causes of action predicated upon a negligence theory, the time period runs from the date of the negligent act or omission and not the date of discovery of the damages or negligence.11 "What is important is when the malpractice was committed not when the client discovers it."12
The sole exception to this rule was recently defined by the Court of Appeals in Britt v. Legal Aid Soc., Inc.,13 a decision of tremendous significance to practitioners in the criminal defense field. While certain areas of practice carry increased risk of claims, traditionally criminal defense attorneys have had the lowest incidence of malpractice suits.14 The reason for this paucity of claims, however, rests more on the fact that in order to maintain a legal malpractice claim against his defense counsel, a client must actually prove his innocence.15 In Britt, however, the Court of Appeals rationalized that since proof of innocence was an element of the cause of action against the attorney, the claim would not accrue until the criminal proceeding is terminated without a conviction, i.e., after the conviction has been vacated and all subsequent proceedings terminated. Taken to its logical extreme, an attorney working for Legal Aid who unsuccessfully represents a client may be subjected to a legal malpractice claim for a period of three years after the prosecution ceases all efforts to reinstate a conviction previously vacated as a result of the ineffective assistance of counsel. Although in Britt, the Legal Aid attorney was forced to defend a legal malpractice claim commenced more than six years after plaintiff sought the attorney's discharge, it is readily apparent that the period of time it might take to vacate a conviction and dispose of all criminal proceedings could exceed a decade. The Britt court acknowledged the public policy interest in having a definitive statute of repose but found that the "interests of judicial economy militate against a rule where litigious criminal defendants can occupy the time of their incarceration by pursuing civil actions against their former attorneys."16 In light of the potentially significant extension of the usual three year period of limitations, counsel representing criminal defendants should take care to avoid gaps in professional liability coverage and to make certain that once an ineffective assistance of counsel defense is raised by a former client, the appropriate insurer is placed on notice of the circumstances which may give rise to a future claim.17
Because of the nature of the attorney-client relationship, the courts adopted a version of the "continuous treatment" theory first applied by the courts in medical malpractice cases.18 Under the doctrine, denominated as one of "continuous representation" as applied to attorneys, a plaintiff is relieved of the obligation to commence an action against the attorney until the attorney has ceased to represent the client in the case in which the malpractice first occurred.19 "[T]he rule recognizes that a person seeking professional assistance has a right to repose 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."20 In order to invoke the doctrine, there must be "clear indicia of an ongoing continuous, developing and dependent relationship between the client and the attorney."21 Consequently, the application of the doctrine is limited to situations where the attorney allegedly responsible for the malpractice continues to represent the client in the same case. "When that relationship ends, for whatever reason, the purpose for applying the continuous representation rule no longer exists."22 In addition, the representation must be for the same or related services and not the continuation of a general professional relationship.23
Although an attorney's continuous representation in the same legal matter operates as a toll of the limitations period, it does not delay the date upon which the alleged malpractice claim accrues.24 As a result, once the attorney establishes a prima facie right to dismissal based upon the expiration of the three year period, the burden shifts to the client to demonstrate the applicability of the doctrine.25
Although it was the judiciary which originally developed the application of the continuous treatment doctrine to medical professionals, in 1975 the legislature enacted a statute which defined the accrual date for a medical malpractice claim as the time of "the act, omission or failure complained of or last treatment where there is continuous treatment for the same illness, injury or condition . . ."26 The statute also limited the scope of what constitutes "continuous treatment" by providing that "examinations undertaken at the request of the patient for the sole purpose of ascertaining the state of the patient's condition" do not qualify to toll the period of limitations under the statute.27
The continuous representation doctrine as applied to attorneys and other non-medical professionals has not been similarly codified. However, notwithstanding the absence of a corresponding statute, since 1996 the volume of continuous representation cases, which had significantly decreased while the six year limitations period reigned, has increased dramatically.
Continuous Representation in the Post-1996 Amendment Era
In May of this year, the Court of Appeals, in its first major decision on the application of the continuous representation doctrine since the 1996 amendment to CPLR 214(6), made clear that the same principles involving the interpretation of the "continuous treatment" doctrine remain applicable in analyzing any claim of "continuous representation."
In Shumsky v. Eisenstein,28 defendant attorney was retained to prosecute a cause of action on behalf of plaintiffs alleging breach of contract against a home inspector. The attorney admitted he did not commence the action before the expiration of the statute of limitations and, in a response to a formal grievance, stated that when the plaintiffs finally contacted him two years later, he was "too embarrassed to discuss the matter and put it off."29 While acknowledging that a professional's failure to provide services necessary to protect a client's interests does not, standing alone, constitute continuous representation for the purposes of tolling the period of limitations,30 on the facts of the case presented, the Court held that an attorney's obligation to a client "does not automatically come to an end where . . . pursuant to a retainer agreement, an attorney and client both explicitly anticipate continued representation." In its analysis of the background of the doctrine, the Court of Appeals confirmed that attorneys would not be subjected to the continuous representation toll unless the representation concerned the specific legal matter upon which the allegations of malpractice were predicated.31 More importantly, the Court reiterated the longstanding proposition32 that "even when further representation concerning the subject matter in which the attorney allegedly committed the complained of malpractice is needed and contemplated by the client, the continuous representation toll would nonetheless end once the client is informed or otherwise put on notice of the attorney's withdrawal from representation." In Shumsky, the Court concluded that at the earliest plaintiffs were effectively put on notice of the termination of the representation "upon defendant's interminable failure to respond to their telephone inquiries . . ."
Various recent decisions before and after the Shumsky decision emphasize the fact that the doctrine of continuous representation will not be utilized as a back door means of again extending the period of limitations against attorneys. Central to the analysis in each decision is whether or not a continuing relationship of trust and confidence existed between the attorney and client with respect to the subject matter of the claimed malpractice. As a result, the courts have held that the relationship of trust is breached, and the cause of action accrues, on the date that subsequent counsel forwards a consent to change attorney;33 where the representation is intermittent as opposed to continuous;34 when the gap in contact exceeds the period of limitations;35 or where the client sends a letter to the court stating he would not oppose a motion for leave to withdraw.36 Since the relationship is personal to the client, the continued representation of one of several clients will not be imputed to the remaining former clients in order to toll the limitations period.37 Furthermore, an extended period of lack of contact militates against a finding of continuous representation notwithstanding the fact that the subsequent representation is under the original index number.38
Notwithstanding the recent abundance of cases holding former clients to their burden of proving "clear indicia" of a continuous representation by the attorney, in a very troublesome decision, the Third Department relied upon precedent established in the medical malpractice field and held that a law firm's continuous representation of a client would be imputed to a departing employed attorney. In Pollicina v. Featherstonaugh & Roemer,39 the court applied the doctrine of continuous representation and tolled the statute of limitations against an associate sued based upon conduct which allegedly took place prior to the associate's departure from defendant law firm nine years earlier. Before Pollicina, once three years had passed, attorneys moving laterally from one law firm to another essentially felt protected from lawsuits alleged to have arisen from their conduct at a prior firm. Now, under Pollicina, the statute of limitations against departing attorneys remains tolled until the client is no longer represented by the former law firm.
Predicating Claims on Theories Other Than Malpractice
Where the plaintiff is a client of the attorney, the courts have been uniform in rejecting efforts to circumvent the effect of the three year limitations period by asserting causes of actions against attorneys predicated upon theories other than malpractice or breach of contract. As a result, where a plaintiff asserts claims of fraud, negligent misrepresentation, breach of fiduciary duty or breach of contract based upon the same conduct and alleging the same damages as a malpractice cause of action, the duplicative claims will be dismissed.40
Documenting the Termination of The Attorney-Client Relationship
Although documenting the termination of the attorney-client relationship will not assist the criminal defense attorney faced with a Britt situation, in most other circumstances, a bright-line termination of the representation of a client in each representation will act as the trigger for the limitations period. Although the fact that there is no formal termination alone will not keep an attorney on the hook indefinitely, in most instances, a question of fact will be raised sufficient to defeat a motion to dismiss.41 Even where an attorney represents a client in multiple matters, it is good practice to document the conclusion of each matter by sending a disengagement letter confirming the representation has been terminated. Use the communication as a marketing tool and invite the client to utilize the firm's services in the future.
If the representation did not terminate at a natural point, the disengagement letter should establish the reason the relationship came to an end and recite important deadlines and uncompleted activities. Adversarial rhetoric should be avoided. Simply state in a general manner the facts surrounding the conclusion of the relationship. Indicate whether and under what circumstances the firm will consult with successor counsel or permit access to work not paid for. Although an attorney may be entitled to a retaining lien under New York law, the attorney may not prejudice the client's rights by exercising the lien. Furthermore, assertion of a retaining lien invites a malpractice claim since the courts will order production of the file through discovery notwithstanding the existence of the lien.42
If circumstances are such that grounds for a mandatory or permissive withdrawal exist in a litigated matter and successor counsel is not retained, be certain to obtain the court's approval in the manner specified in the jurisdiction. If a substitution of attorneys is obtained, be sure it complies with the requirements of the tribunal and that it is filed with the court. Although failure to file a substitution of attorney form alone will not continue the relationship indefinitely, the sounder practice is to follow the rules.
In addition to reducing the level of angst in an undeniably stressful profession, documenting the proper termination of the attorney-client relationship is an effective risk management tool that serves not only to avoid the potential for future errors but may also limit the scope of the client's allegations in the event a claim is made. Fixing the date from which the statute of limitations is measured is an important added benefit.
COPYRIGHT © 2001 BY L’ABBATE , BALKAN, COLAVITA & CONTINI, LLP NO REPRINTING WITHOUT EXPRESS WRITTEN PERMISSION
1. American Bar Association Standing Committee on Lawyer's Professional Liability, Profile of Legal Malpractice Claims 1996-1999, p. 11 (American Bar Association 2001).
2. See, e.g., In re Acito, 281 A.D.2d 62, 721 N.Y.S.2d 559 (2 Dep't 2001); In re Morrisson, 279 A.D.2d 246, 723 N.Y.S.2d 769 (4th Dep't 2000); In re Levine, 279 A.D.2d 219, 717 N.Y.S.2d 359( 2nd Dep't 2000); In re Mathison, 279 A.D.2d 213, 717 N.Y.S.2d 909 (2nd Dep't 2000); In re McLoughlin., 265 A.D.2d 9, 703 N.Y.S.2d 265 (2nd Dep't 2000); In re Bennett, 265 A.D.2d 33, 703 N.Y.S.2d 336 (4th Dep't 2000).
3. N.Y. Comp. Codes R. & Regs. Tit. 22, §1200.15 (2001) [DR 2-110] Withdrawal From Employment.
4. N.Y. Civ. Proc & R. §321 (McKinney Supp. 2001).
5. Although the Court of Appeals first addressed the six year statute of limitations for breach of contract actions against a professional in Sosnow v. Paul, 36 N.Y.2d 780, 369 N.Y.S.2d 693 (1975)(architect), the memorandum opinion did not expand upon the reason why the Court of Appeals was limiting plaintiff to contract damages. It was not until Sears, Roebuck & Co. v. Enco, 43 N.Y.2d 389, 401 N.Y.S.2d 767 (1977) (architect), that the evolution of the theory that malpractice may be founded upon a contract had its articulated genesis. In Video Corp. of America v. Flatto Assoc., 58 N.Y.2d 1026, 462 N.Y.S.2d 439 (1983)(Insurance broker), the Court of Appeals began to shift the focus of the theory from breach of contract to a "breach of the implied duty to use due care."
6. 78 N.Y.2d 700, 586 N.E.2d 1014, 579 N.Y.S.2d 324 (1992).
7. N.Y. Civ. Proc & R. §214(6) (McKinney Supp. 2001).
8. The "Justification" accompanying passage of the amendment strongly condemns the judicial expansion of the statute of limitations to six years as abrogating and circumventing the original legislative intent. Passage of the amendment was described as the legislature's reaffirmance of its intent that the three year statute apply in order to put an end to the concern that "the courts will continue to expand the statute of limitations in general malpractice cases" to be governed by the six year statute.
9. 95 N.Y.2d 290, 716 N.Y.S.2d 367, 739, N.E.2d 733 (2000).
10. Id., 95 N.Y.2d 290, 305, 716 N.Y.S.2d 367, 739 N.E.2d 733.
11. Santulli v. Englert, Reilly & McHugh, P.C. , 78 N.Y.2d 700, 586 N.E.2d 1014, 579 N.Y.S.2d 324 (1992); Kuhn v. Hart, 270 A.D.2d 231, 704 N.Y.S.2d 126 (2nd Dep't 2000); Kuritsky v. Sirlin & Sirlin, 231 A.D.2d 607, 647 N.Y.S.2d 806 (2nd Dep't 1996); Goicoechea v. Law Offices of Stephen R. Kihl, 234 A.D.2d 507, 651 N.Y.S.2d 198 (2nd Dep't 1996); Tal-Spons Corp. v. Nurnberg, 213 A.D.2d 395, 623 N.Y.S.2d 604 (2nd Dep't 1995).
12. Glamm v. Allen, 57 N.Y.2d 87, 94, 453 N.Y.S.2d 674, 678 439 N.E.2d 390, 393 (1982).
13. 95 N.Y.2d 443, 741 N.E.2d 109, 718 N.Y.S.2d 264 (2000).
14. Four percent of claims asserted against attorneys arise out of the representation of defendants in criminal matters. American Bar Association Standing Committee on Lawyer's Professional Liability, Profile of Legal Malpractice Claims: 1996-1999, p. 7 (American Bar Association 2001).
15. Carmel v. Lunney, 70 N.Y.2d 169, 173, 518 N.Y.S.2d 605, 511 N.E.2d 1126 (1987); Dill v. Russo, Garguilo & Fox, 265 A.D.2d 447, 696 N.Y.S.2d 522 (2nd Dep't 1999).
16. 95 N.Y.2d 443, 449, 741 N.E.2d 109,113, 718 N.Y.S.2d 264, 268 (2000).
17. Although not the topic for this article, the scope of an insured's obligation to report a claim or potential claim has been the topic of prior newsletters. Suffice it to say that most policies require insureds to notify the insurer not only when a claim is asserted by a client against the attorney but also when the attorney becomes aware of circumstances which could reasonably be expected to lead to a claim.
18. Borgia v. City of New York, 12 N.Y.2d 151, 237 N.Y.S.2d 319, 187 N.E.2d 777 (1962).
19. Glamm, supra, 57 N.Y.2d 87, 93, 453 N.Y.S.2d 674, 677 439 N.E.2d 390, 393 (1982).
20. Greene v. Greene, 56 N.Y.2d 86, 94, 451 N.Y.S.2d 46, 50, 436 N.E.2d 496, 500 (1982).
21. Luk Lamellen U. Kupplungbau GmbH v. Lerner, 166 A.D.2d 505, 506, 560 N.Y.S.2d 787 (2nd Dep't 1990).
22. Glamm, supra, 57 N.Y.2d 87, 94, 453 N.Y.S.2d 674, 439 N.E.2d 390 (1982).
23. Muller v. Sturman, 79 A.D.2d 482, 484, 437 N.Y.S.2d 205 (4th Dep't 1981).
24. Glamm, supra, 57 N.Y.2d 87, 94, 453 N.Y.S.2d 674, 678, 439 N.E.2d 390, 393 (1982).
25. Easton v. Sankel, 268 A.D.2d 861, 703 N.Y.S.2d 542 (3rd Dep't 2000) aff'd on other grds. 95 N.Y.2d 290, 739 N.E.2d 733, 716 N.Y.S.2d 367 (2000).
26. N.Y. Civ. Proc & R. §214-a (McKinney Supp. 2001).
28. 96 N.Y.2d 164, 750 N.E.2d 67, 726 N.Y.S.2d 365 (2001).
29. Id., 96 N.Y.2d 164, 166, 750 N.E.2d 67, 69, 726 N.Y.S.2d 365, 367 (2001). The Court of Appeals decision notes that the Grievance Committee for the Tenth Judicial District found that the defendant attorney's conduct constituted a breach of the provisions of the Code of Professional Responsibility and resulted in a "Letter of Admonition."
30. Ashmead v. Groper, 251 A.D.2d 716, 673 N.Y.S.2d 779 (3rd Dep't 1998).
31. Shumsky, supra, 96 N.Y.2d 164, 168, 750 N.E.2d 67, 726 N.Y.S.2d 365 (2001).
32. Baker's Serv. v. Robinson, 85 A.D.2d 811, 812-813, 445 N.Y.S.2d 630, 633 (3rd Dep't 1981).
33. Piliero v. Adler & Stavros, 282 A.D.2d 511, 723 N.Y.S.2d 91 (2nd Dep't 2001).
34. Loft Corp. v. Porco, ___ A.D.2d ___ , 725 N.Y.S.2d 211 (2001).
35. Arnoff, N., et al, Legal Malpractice: Techniques to Avoid Liability 1999, 608 PLI/Lit 195, 246 (PLI 1999); Cf., Bulger v. Nassau County Medical Center, 266 A.D.2d 212, 212 697 N.Y.S.2d 345, 346 (2nd Dep't 1999); Michaels-Dailey v. Shamoian, 245 A.D.2d 430, 431, 666 N.Y.S.2d 199, 200 (2nd Dep't 1997); Concha v. Local 1115Employees Union Trust Welfare Fund, 216 A.D.2d 348, 628 N.Y.S.2d 172 (2nd Dep't 1995); Leale v. New York City Health & Hospitals Corp., 222 A.D.2d 414, 415, 634 N.Y.S.2d 536, 537 (2nd Dep't 1995); Bennin v. Ramapo General Hospital, 72 A.D.2d 736, 421 N.Y.S.2d 243 (2d Dept. 1979).
36. Aaron v. Roemer, Wallens & Mineaux, LLP, 272 A.D.2d 752, 707 N.Y.S.2d 711 (3rd Dep't 2000).
37. Tiffany Holding Corp. v. Speno, Goldberg, Steingart & Penn, P.C., 278 A.D.2d 306, 717 N.Y.S.2d 612 (2nd Dep't 2000).
38. Ruggiero v. Powers, ___A.D.2d ___, 725 N.Y.S.2d 759 (3rd Dep't 2001).
39. 260 A.D.2d 52, 699 N.Y.S.2d 238 (3rd Dep't 1999).
40. See, Tybrowski v. Cuddeback & Onofry, 279 A.D.2d 763, 718 N.Y.S.2d 489(3rd Dep't 2001)(Duplicative breach of contract and breach of fiduciary duty claims dismissed); Best v. Queller & Fisher, 278 A.D.2d 441, 718 N.Y.S.2d 397 (2nd Dep't 2000) (Duplicative fraud, breach of contract and indemnification claims dismissed); Schweizer v. Mulvehill, 93 F.Supp.2d 376, 399 (S.D.N.Y. Mar 31, 2000)(Duplicative fraud and breach of fiduciary duty claims dismissed); Mecca v. Shang, 258 A.D.2d 569, 685 N.Y.S.2d 458 (2nd Dep't 1999) mot. for lv. to app dism'd 95 N.Y.2d 791, 733 N.E.2d 230, 711 N.Y.S.2d 158 (2000)(Duplicative breach of fiduciary duty, fraud, negligent misrepresentation and gross negligence causes of action dismissed).
41. See, e.g., Leffler v. Miller, ___ A.D.2d ___ , ___ N.Y.S.2d ___, 2001 WL 777573 (3rd Dep't 2001).
42. Saratoga Harness Racing, Inc. v. Roemer, 274 A.D.2d 887, 711 N.Y.S.2d 603 (3rd Dep't 2000); Franklin, Weinrib, Rudell & Vassallo v. Stellato, 240 A.D.2d 301, 658 N.Y.S.2d 622(1st Dep't 1997); Rosenberg & Estis, P.C. v. Stewart, 138 Misc.2d 72, 524 N.Y.S.2d 142 (N.Y. Civ. Ct. 1987).
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