A New York appellate court has ruled that a legal malpractice claim was barred by the state’s statute of limitations. In Frank Pace III v. Raisman & Associates, Esqs., LLP, a client retained an attorney to make an estate plan, including the creation of a trust. The purpose was to transfer assets into the trust in order to avoid estate taxes. The client died five years after the creation of the trust.
The attorney also prepared the client’s estate tax return. Several years later, the Internal Revenue Service performed an audit of the estate, determining that additional estate taxes were due on property purported in the trust on the basis that the client had retained too much control over the trust assets.
The client’s son was the executor of the estate and filed a legal malpractice action against the attorney, alleging that he had negligently prepared the trust documents. The attorney moved to dismiss on the basis that the action was barred by New York’s three year statute of limitations. The trial court denied the motion and the attorney appealed.
The appellate court overruled the lower court order, finding that the limitations period had passed when the action was filed, and there was no tolling based on the firm’s continued representation of the estate after the client died. The court ruled that the attorney-client relationship ended upon the client’s death, and that the conduct giving rise to the malpractice claim had occurred during the client’s lifetime. The statute of limitations thus began to run immediately upon the client’s death and had passed over two years prior to the date that the son filed his lawsuit.
Decision: Frank Pace III v. Raisman & Associates, Esqs., LLP