Commercial Division Blog
Continuous Representation Tolls Statute of Limitations, Not Accrual of a Claim Itself
On August 11, 2016, Justice Bransten of the New York County Commercial Division issued a decision in Aaron v. Deloitte Tax LLP, 2016 NY Slip Op. 31604(U), rejecting application of the continuous representation doctrine because that doctrine tolls the statute of limitations, but does not stop the accrual of a claim itself.
In Aaron, Davidson, who later died and was represented in the action by the personal representatives of his estate, and the defendant accounting firm entered into an engagement letter regarding estate planning. The letter provided that "no action, regardless of form, relating to this engagement, may be brought by either party more than one year after the cause of action has accrued." The plaintiffs subsequently brought malpractice claims against the defendants, which the court dismissed as untimely, explaining:
The continuous representation doctrine does not salvage Plaintiffs' claims. First and foremost, this toll - and all tolls - are expressly barred by the language of the 2008 Engagement Letter, which states that "no action, regardless of form, relating to this engagement, may be brought by either party more than one year after the cause of action has accrued." However, even if application of the continuous representation toll were not foreclosed by the agreement, Plaintiffs cannot use the toll to defer accrual of their claims.
The continuous representation doctrine serves to toll the statute of limitations for a claim, not accrual of the claim itself. This is a nuanced distinction but one that is fatal to Plaintiffs' claim under the agreed-upon language of the 2008 Engagement Letter.
(Internal quotations and citations omitted) (emphasis added).