Legal Malpractice

The Borrowing Statute in Legal Malpractice

By (Andrew Lavoott Bluestone)

When a tort is committed outside of New York and a non-resident sues within the State of New York, courts apply the borrowing statute, especially with regard to the statute of limitations.  As an example, Kat House Prods., LLC v Paul, Hastings, Janofsky & Walker, LLP ; 2010 NY Slip Op 02489 ; Decided on March 25, 2010 ; Appellate Division, First Department  reminds us that although the NY statute of limitations is 3 years, the California statute of limitations for legal malpractice is only 1 year.  In this case, the Court applied the California time limits.
 

"When a nonresident sues in New York's courts on a cause of action accruing outside the state, our "borrowing statute" (CPLR 202) requires that the cause of action be timely under the limitation periods of both New York and the jurisdiction where the claim arose (see Global Fin. Corp. v Triarc Corp., 93 NY2d 525, 528 [1999]). Generally, a tort action accrues "at the time and in the place of the injury," and "[w]hen an alleged injury is purely economic, the place of injury usually is where the plaintiff resides and sustains the economic impact of the loss" (id. at 529).

Applying these principles, it is clear that plaintiffs' legal malpractice claim accrued in California, where their residences and principal place of business were located and the alleged economic injury was sustained, at the latest, in March 2006. Under that state's applicable one-year statute of limitations (Cal Civ Proc Code § 340.6), this action, commenced in November 2007, was time-barred. "

Full post as published by New York Attorney Malpractice Blog on March 30, 2010 (boomark / email).