Goldman v. Akin, Gump, Strauss, Hauer & Feld, LLP

In Goldman v. Akin, Gump, Strauss, Hauer & Feld, LLP (11 Misc. 3d 1077[A], 2006 NY Slip Op 50604[U] [NY Sup 2006]), the plaintiffs were general partners of seven limited partnerships who negotiated the sale of facilities without a release from the limited partners. The plaintiffs retained the defendants (attorneys) to assist them in consummating the sale, and the sale closed on September 25, 1998. Subsequently, plaintiffs were sued by the dissenting partnerships, resulting in a series of arbitration awards against plaintiffs, including one as late as August 2002. On December 2, 2004, the plaintiffs sued their attorneys for legal malpractice, contending that the attorneys negligently told them that they could successfully sell the limited partnerships without incurring any liability. The defendants maintained that their representation of plaintiffs in the sale ended in 1999, and that the three-year statute of limitations had expired in 2004 when the action was filed. However, the plaintiffs argued that the doctrine of continuous representation applied, as defendants represented plaintiff in the arbitrations that ended less than three years before they commenced their legal malpractice action. The Court held that the statute of limitations prohibited plaintiff's bringing the legal malpractice action. "The record reflects that the defendants were retained to consummate the sale. Although they told the plaintiffs they were available if any further litigation occurred, they were not retained until much later when the arbitrations commenced There was a clear break in the two representations. Moreover, they were distinct- one retention was for papering the deal while the other was for representation in litigation. . . . If I were to decide the merits of this claim, I would still dismiss. Plaintiffs were obviously sophisticated businessmen who knew the risks they were taking because they were revealed by Hochman's strenuous objections to the deal. [Defendants were] not retained to advise whether the plaintiffs should have entered into the deal."(Id.)