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Sullivan v. Aslanides1/6/2005
3:1K-6 to -14, to be effective for transfers of real property after December 31, 1983. The result of the delay in closing was to make the transfer of this industrial site subject to ECRA, thus entailing significant costs which had not been anticipated. O'Connor had not advised Dixon of the potential ramifications of not closing on this transaction prior to December 31, 1983.
Dixon was, at the same time, selling additional property in Jersey City and retained attorney Friedman to represent it in connection with that sale, which occurred after December 31, 1983, and was subject to ECRA. In the course of handling that transaction, Friedman advised Dixon that the earlier sale had also triggered ECRA. Id. at 157.
Eventually, litigation commenced to apportion the costs of cleaning up the industrial site and Friedman also assisted Dixon in that matter. Dixon originally prevailed in the trial court in that law suit but was unsuccessful on appeal. Id. at 158. Following that appellate decision in 1989, Friedman had several conversations with representatives of Dixon about the possibility of instituting a legal malpractice action against O'Connor.
Ibid. He never did so, however.
Thereafter, in 1996, Dixon filed suit against both O'Connor and Friedman. Dixon, supra, 248 F.3d at 160. It alleged that O'Connor had committed malpractice in not advising Dixon of the ECRA implications of the closing date and that Friedman had committed malpractice in not instituting suit against O'Connor. Id. at 154. The trial court dismissed the claims against O'Connor and his firm as time-barred, a conclusion the Court of Appeals affirmed.
Because this was a diversity case, the court applied New Jersey law in resolving the question when Dixon's cause of action against O'Connor accrued and when it was barred. Id. at 160-61. To do so, it relied upon the Supreme Court's opinion in Grunwald, supra, to analyze when Dixon first had reason to believe O'Connor had been negligent, when it was first harmed by that negligence and when it had reason to believe that his negligence, if any, had caused that harm. Id. at 162. The court concluded that Dixon first had reason to believe that negligence had occurred in connection with the sale of its industrial property when Friedman advised it, in either late 1984 or early 1985, that the sale had been subject to ECRA. Ibid. It also concluded that by October 21, 1985, Dixon had been harmed by that alleged negligence and had reason to link O'Connor to the harm, for it was on that date that it paid Friedman to represent it in connection with the ECRA-related cleanup litigation that had been instituted. Id. at 163.
The trial court here relied upon the references in Grunwald, supra, and Dixon, supra, to payment of legal fees to support its conclusion that Sullivan's retention of counsel to defend against Szwed's lawsuit commenced the period of limitations. We disagree, however, for several reasons.
We do not think either Grunwald or Dixon stand for the proposition that when an individual hires an attorney as a result of actions by another attorney, the statute of limitations begins to run on a malpractice action against the original attorney. Indeed, in Dixon, the court rejected such a bright line rule, saying that it recognized that"not every claim made against a client--and not every counsel fee expended in defense of that claim--triggers the running of the statute of limitations for a legal malpractice claim." Dixon, supra, 248 F.3d at 164. The Court in Grunwald, moreover, did not hold that plaintiff's cause of action accrued when he incurred counsel fees to commence suit to seek specific performance but when he received an advers
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