Mot. Seq. 001 & 002

Motion Sequence Numbers 001 and 002 are consolidated for disposition. The motion to dismiss (Motion Sequence 001) by defendants Kane Kessler, P.C. ("Kane") and Darren Berger is granted. The motion to dismiss (Motion Sequence 002) by defendants Ebert Lontok, LLC ("Lontok LLC") is granted.

This case is about a series of failed real estate transactions involving the purchase of pre-construction residential and hotel condominium units in Trump International Hotel & Tower in Toronto, Canada. Plaintiff was the buyer and Talon International, Inc. ('Talon") was the seller. Plaintiff entered into five separate agreements to purchase units from July 2004 to May 2006 and made down payments totaling about $1.2 million. These transactions were never finalized.

Kane represented plaintiff in connection with numerous real estate transactions in Toronto, Chicago, Las Vegas and New York City. This case focuses on only the five transactions in Toronto and Kane's role as the notice party for three (the three hotel units) of the five transactions— this meant that Kane, as the attorney for plaintiff (buyer), was designated in the contracts to receive written notices from Talon (seller), which included notices about the closing date. Plaintiff's attorney at Kane was defendant Erwin Lontok. Mr. Lontok worked for Kane until he resigned in June 2006 and moved to Sonn & Associates, P.C., where he worked until the end of 2009. Mr. Lontok then worked at Lontok Chance LLP until April 2013 when he left to form Ebert Lontok LLC with Steven Ebert in April 2013. Mr. Lontok represented plaintiff throughout his employment at these various entities.

On October 11, 2006, a few months after Mr. Lontok left Kane, plaintiff fired Kane and requested that he be forwarded his files immediately. At the time of the termination, the real estate transactions in Toronto were still pending and awaiting closings. Kane insists that six months after Kane was terminated, plaintiff executed an amendment to the purchase agreements regarding the closing dates for the units. Kane contends that it did not represent plaintiff for those amendments. In October 2012, years after plaintiff fired Kane and several months after plaintiff executed amendments to the sales contracts, Talon's counsel faxed three letters to Kane which identified a new closing date for the three units. While Kane argues that the seller's attorneys, Harris Schaeffer, LLP, failed to use the fax number listed in the purchase agreement (which Kane says was plaintiff's fax number), Kane did not ignore the fax. Defendant Berger, a Kane attorney, contends that despite never having any previous contact with plaintiff he called plaintiff and told him about the October 2012 notices. Plaintiff told Berger to call Lontok and Berger told Lontok about the notices as well.

Plaintiff contends that because Kane and Berger accepted notices from Talon, they are estopped from claiming they did not act as plaintiff's counsel. Plaintiff insists he never knew about these notices and that all defendants in this action failed to properly represent him.

In 2014, Talon started an action in Canada against plaintiff seeking damages and a declaration that plaintiff breached the terms of the purchase agreements and forfeited his deposits. Talon claimed plaintiff ignored multiple notices for the closing dates and failed to close on the five units. Plaintiff filed his own action against Talon in Canada as well.

Kane and Berger argue that the statute of limitations bars this action, which was commenced on October 28, 2016, because more than three years have passed since plaintiff terminated his relationship with Kane. Kane insists that all files were forwarded to plaintiff so that Lontok could continue representing plaintiff. Kane argues that it did not have any continuing duty to plaintiff and stresses that plaintiff fired Kane in 2006, ten years before this case was commenced. Kane observes that the latest date plaintiff alleges that Kane received the closing notices was December 20, 2012 (for a closing date of February 7, 2013), which is still more than three years before this case was commenced. Kane also contends that plaintiff cannot establish the other elements of legal malpractice, including negligence, or that Kane was the proximate cause of plaintiff's damages. Kane further stresses that defendant Berger cannot be found liable because he was never plaintiff's attorney.

In opposition to Kane and Berger's motion, plaintiff contends that Kane represented plaintiff on each transaction and was the notice party for three of the five transactions. Plaintiff argues that Kane was not relieved of its duty to inform plaintiff about any notices it received merely because Lontok no longer worked for Kane. Plaintiff maintains Kane had a continuing duty to plaintiff and that this Court must apply New Jersey law.

"On a CPLR 3211 motion to dismiss, the court will accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Nonnon v City of New York, 9 NY3d 825, 827, 842 NYS2d 756 [2007] [internal quotations and citation omitted]).

New York's borrowing statue, CPLR 202, provides that "An action based upon a cause of action accruing without the state cannot be commenced after the expiration of the time limited by the laws of either the state or the place without state where the cause of action accrued, except that where the cause of action accrued in favor of a resident of the state the time limited by the laws of the state shall apply." "[I]n actions brought by non-New York residents, the shorter of the New York Statute of Limitations or the limitations period of the jurisdiction where the cause of action accrued will apply" (Ackerman v Price Waterhouse, 252 AD2d 179, 195, 683 NYS2d 179 [1st Dept 1998]).

Here, plaintiff, a New Jersey resident, brings a legal malpractice claim against Kane and Berger. The applicable statute of limitations for a claim of legal malpractice is three years in New York (CPLR 214[6]) and six years in New Jersey (McGrogan v Till, 167 NJ 414, 426, 771 A2d 1187 [2001]). Therefore, New York's three-year statute of limitations period applies.

The absolute latest date Kane or Berger (on behalf of Kane) could possibly have committed legal malpractice was February 7, 2013— the latest closing date referenced in the complaint (see complaint at 17 [alleging that Kane received two notices from Harris Schaefer on December 20, 2012 that closings for four separate units would occur on February 7, 2013]). Taking these facts as true, as the Court must on a motion to dismiss, this action was still commenced more than three years later - in October 2016. Therefore, this action is time barred against Kane and Berger.

Plaintiff's reliance on a theory of a continuing duty of representation does not compel a different result. Plaintiff allegedly suffered damages because he was unaware of these notices and lost his down payments when he ignored the closing dates. That means the cause of action accrued at those closing dates— assuming arguendo that Kane and Berger had some continuous duty to represent plaintiff after plaintiff fired Kane in October 2006.

"On a CPLR 3211 motion to dismiss, the court will accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Nonnon v City of New York, 9 NY3d 825, 827, 842 NYS2d 756 [2007] [internal quotations and citation omitted]). A motion to dismiss based on documentary evidence "may be appropriately granted only where the documentary evidence utterly refutes plaintiff's factual allegations, conclusively establishing a defense as a matter of law" (Goshen v Mutual Life Ins. Co. of New York, 98 NY2d [*2]314, 326, 746 NYS2d 858 [2002]). "Whether a plaintiff can ultimately establish its allegations is not part of the calculus in determining a motion to dismiss" (EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19, 799 NYS2d 170 [2005]).

Lontok LLC moves to dismiss on the ground that this entity was not even in existence until April 2013— months after the latest possible date of any alleged malpractice. Lontok LLC argues that it cannot be held liable for legal malpractice because there was no attorney-client relationship at the time plaintiff alleges his cause of action accrued.

In opposition, plaintiff insists that his complaint sets forth causes of action against Lontok LLC for vicarious liability arising from Erwin Lontok's continuing professional duty to plaintiff under New Jersey law.

The complaint is dismissed as to Lontok LLC because plaintiff offered no opposition to Lontok LLC's documentary evidence that Lontok LLC was not in existence when the acts alleged in the complaint occurred. As stated above, the latest date identified in the complaint is February 7, 2013— the closing date for certain units. Erwin Lontok submitted an affidavit detailing his employment history, which asserts that Lontok LLC was not in existence until April 5, 2013 (see NYSCEF Doc. No. 45, ¶ 5). Plaintiff did not dispute this contention. Obviously, "[a] cause of action for legal malpractice cannot be stated in the absence of an attorney-client relationship" (Waggoner v Caruso, 68 AD3d 1, 5, 886 NYS2d 368 [1st Dept 2009]). Here, there was no such relationship during the relevant time period— when the notices were sent by the seller's attorney— and the complaint is dismissed against Lontok LLC.

Although the Court questions plaintiff's inclusion of Kane, Berger and Lontok LLC as defendants, sanctions are not appropriate. Mr. Lontok's various employers throughout the last decade complicated plaintiff's attempt to identify the correct parties to include in this action. Just because plaintiff has lost these motions does not mean that including these parties in the lawsuit was frivolous.

Accordingly, it is hereby

ORDERED that Kane and Berger's motion to dismiss is granted and all claims and cross-claims against these defendants are hereby severed and dismissed; and it is further

ORDERED that Lontok LLC's motion to dismiss is granted and all claims and cross-claims against this defendant are hereby severed and dismissed; and it is further

ORDERED that the clerk is directed to enter judgment accordingly upon presentation of the proper papers therefor.

This is the Decision and Order of the Court.

The remaining parties are to appear for a preliminary conference on November 28, 2017 at 2:15 p.m.