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Accrual of Attorneys' Cause of Action for Unpaid Balances

Posted on Monday, May 14, 2018

Recently, the Court of Appeals took on an interesting battle between attorney and former client in Seyburn v Bakshi (Docket No. 272903), where Law Firm was suing its Former Client for unpaid legal fees. Law Firm represented Former Client in multiple cases and lost the trial court litigation and one appeal for Former Client. After paying $92,000 in legal fees, Former Client ceased payment and eventually accrued over $55,000 in legal fees owed to Law Firm. The unpaid fees, not surprisingly, resulted in conflict between the two men and Law Firm moved to withdraw as Former Client’s counsel. The motion to withdraw was granted in September 1993.

 

In October 1993, Former Client requested his file from Law Firm. Law Firm had its paralegal review the file and charged Former Client $182 to review the file and $250 to copy the documents out of it. Former Client proceeded to file a legal malpractice suit against Law Firm in 1995 which was dismissed because it was barred by the two year statute of limitations. The final straw in this heated battle between the two men took place when Law Firm filed suit to recover the outstanding legal fees owed by Former Client. Law Firm filed suit in October 1999 while the legal malpractice suit was still ongoing. Former Client claimed the suit was barred by the six-year statute of limitations. Law Firm claimed that because it had done legally billable work for Former Client in October 1993 (reviewing and copying the Former Client file) that its claim was within the six year limitations period.

 

The Court of Appeals took the opportunity in this case to settle the dispute about when the attorney client relationship properly ends. The Court reasoned that the attorney client relationship is not extended merely because the “attorney renders a compensable, but ministerial, service, like returning a Former Client’s file, as occurred in this case.” In this case, the date the attorney client relationship ended was September 1993 (when the trial court granted Law Firm’s motion to withdraw), which is the accrual date for the six year statute of limitations.

 

The Court made an analogy in this case to legal malpractice, noting that the performance of the ministerial task of copying and returning the file to the client would not extend the accrual date for the Former Client’s legal malpractice suit. It can be inferred from this decision that the accrual date (at least for litigation matters) is the same for legal malpractice and collection of unpaid legal fees–the date of the termination of services. The dissenting opinion discusses this issue.

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