Meskunas v. Auerbach, Esq

Background

Denise Meskunas and John A. Meskunas brought claims for legal malpractice and an accounting against Lee David Auerbach, Esq., and Lee David Auerbach, P.C. The court had subject-matter jurisdiction under 28 U.S.C. § 1332. The defendants moved for summary judgment, which is a decision without a trial when the record shows no genuine dispute over a fact that could affect the result and the moving party is entitled to judgment under the law.

Denise and John were married and were involved in a divorce proceeding. They were also co-members of Important Properties, LLC, which owned commercial property in New Rochelle, New York. The property was leased to a Harley Davidson motorcycle dealership, and the rent was intended to fund the mortgage payments. Denise and John personally guaranteed the mortgage obligations.

Denise retained Auerbach to represent her individually and as a member of Important Properties, LLC. Beginning in 2012, Auerbach collected rent checks from the dealership. From June 2012 through August 2013, he did not use fifteen of those checks to pay the mortgage. Instead, he gave the checks to Denise, who used the money for personal expenses, including legal fees owed to Auerbach. Important Properties, LLC later defaulted on the mortgage, and Colfin Metro Funding began a foreclosure action against the company, Denise, and John.

The malpractice claim was based on Auerbach’s alleged failure to advise Denise that failing to make the mortgage payments could result in default, foreclosure, and personal liability. The accounting claim sought an accounting of the fifteen rent checks.

Legal Malpractice Claim

The court applied New York’s three-year limitations period for legal-malpractice claims. It also considered the continuous-representation doctrine, which can pause that limitations period while the attorney and client continue working together on the specific matter involved in the alleged malpractice.

The court held that Auerbach’s representation of Denise in the foreclosure action ended on June 11, 2013, when his firm sent the Termination Letter. The court found no genuine dispute that Denise received and reviewed the letter, even though plaintiffs’ counsel offered evidence that she may not have received a hard copy.

The court rejected Denise’s argument that later events continued the representation. Auerbach performed some unrelated legal services after June 2013, but those services did not concern the subject of the alleged malpractice. Denise was continuously and exclusively represented in the foreclosure action by Ira Clair during that period. In November 2014, Auerbach performed limited services involving the foreclosure matter, but the court found no evidence that these services constituted substantive legal work or part of one uninterrupted course of representation. The court also found that no reasonable juror could conclude, based on the record, that Auerbach was the unidentified attorney who advised Denise not to sign the proposed settlement.

Because the continuous-representation doctrine did not extend the limitations period beyond June 11, 2013, and the action was filed on November 21, 2017, the court dismissed Denise’s malpractice claim as untimely.

Accounting Claim

Under New York law, an accounting claim can require a defendant to disclose dealings involving money or property entrusted to the defendant when the other requirements for that remedy are met. The court described an accounting as a restitutionary remedy, meaning it is intended to return money that was properly due to the plaintiff.

The court held that the fifteen rent checks were already accounted for. The defendants provided the checks, deposit slips, authorizations, other documents, and admissions responses that allowed the plaintiffs to trace the money from the dealership to the defendants and then to Denise.

The plaintiffs argued that Auerbach might have improperly benefited from the rent money through legal fees and that the defendants should return those funds. The court rejected that argument, stating that the evidence did not show the rent money was properly due to the plaintiffs in the first place. The court also noted that Denise herself had benefited from the diversion of the checks. The court therefore dismissed the accounting claim.

Disposition

Judge Vincent L. Briccetti granted the defendants’ motion for summary judgment. The court dismissed Denise’s legal-malpractice claim as untimely and dismissed the plaintiffs’ accounting claim. The Clerk was instructed to terminate the motion and close the case.