Susan McCoy,
Appellant,
v.
Kenneth I. Feinman, &c., et al.,
Respondents.
2002 NY Int. 138
This appeal involves the Statute of Limitations in a
legal malpractice action implicating a Qualified Domestic
Relations Order (QDRO) under the Federal Employee Retirement
Income Security Act of 1974 (ERISA) (29 USC §§ 1001 et seq.).
Plaintiff, the wife in an underlying divorce action, sued her
former attorneys alleging that they negligently failed to secure
pre-retirement death benefits under her ex-husband's employee
benefit plan. The trial court and a divided Appellate Division
concluded that the action was time-barred. Because neither
plaintiff's stipulation of settlement nor the divorce judgment
gave plaintiff a right to the survivor benefits she seeks, we
I.
Plaintiff and her former husband married in 1969. Under the husband's employee benefit plan, a surviving spouse or other designee would be eligible to receive either retirement benefits (if the employee-spouse retired) or survivorship benefits (if the employee-spouse died before retirement). The couple separated in 1985, after the husband's interest in the plan had vested. In January 1986, plaintiff hired defendant lawyer Kenneth Feinman of defendant law firm Siegel Kelleher & Kahn to represent her in the divorce. On June 23, 1987, Feinman and the husband's attorney entered the following oral stipulation of settlement, which Feinman read into the record in open court:
"[I]t is agreed by the parties that [plaintiff] shall receive a portion of [the husband's] pension plan calculated with recourse pursuant to the formulas set forth in the case of Majauskas and Szulgit, with the percentage being calculated as follows: [plaintiff] shall receive fifty per cent of a fraction calculated by dividing the number of months of marriage to the date of the action for divorce being commenced by the number of months that [the husband] has in the plan at the time of retirement. * * * [T]he pension shall be divided pursuant to the figures I have just indicated by recourse to a Qualified Domestic Relations Order which my office shall prepare and submit to the Court either simultaneously with or shortly after the judgment of divorce."
Feinman also stated on the record that he would submit a proposed judgment of divorce. Defendants concede that Feinman never prepared the QDRO or the judgment. Instead, the husband's attorney prepared and filed the proposed judgment, which was entered in the county clerk's office on June 14, 1988. The stipulation of settlement was incorporated but not merged into the judgment of divorce. Plaintiff's ex-husband later remarried.
Feinman also represented plaintiff in a Family Court support action against her ex-husband that concluded on July 24, 1991. There is no record evidence that plaintiff had further contact with Feinman or his firm regarding the stipulation, divorce judgment, QDRO or employee benefit plan until September 1994, when plaintiff's ex-husband died before retirement. Plaintiff -- still unaware that Feinman had never filed the QDRO -- then informed Feinman of her ex-husband's death. Over the ensuing year, defendant firm sought unsuccessfully to obtain for plaintiff the pre-retirement death benefits payable under her ex- husband's employee benefit plan. The plan administrator ultimately determined that because there was no QDRO naming plaintiff as the surviving spouse under the plan, plaintiff was ineligible under ERISA to receive pre-retirement death benefits.
Unable to obtain those benefits for its client,
Feinman's firm formally advised plaintiff on January 9, 1996 that
it was closing her file. On June 12, 1996 (nine years after the
settlement stipulation, eight years after the divorce judgment
Supreme Court granted defendants' CPLR 3211(a) 5) motion to dismiss on grounds that the three-year limitations period had run. A divided Appellate Division affirmed. The majority held that the malpractice claim accrued no later than June 14, 1988, when the divorce judgment was entered. They reasoned that on that day, plaintiff became ineligible to be considered the husband's surviving spouse for purposes of receiving survivor benefits under his employee benefit plan. The dissenters would have held, and plaintiff argues before this Court, that the three-year limitations period did not begin to run until September 1, 1994, the date of her husband's death. The dissenters reasoned that until the husband's death, plaintiff could not have pleaded actual damages caused by defendants' negligence. The dissenters also contended, and plaintiff argues here, that this case qualifies for the continuous representation toll of Shumsky v Eisenstein (, 96 NY2d 164 [2001]).
Plaintiff appeals as of right based on the two-Justice
dissent on a question of law (see CPLR 5601 [a]), and we now
affirm. In addressing plaintiff's claims, we must examine not
only the applicable limitations period for attorney malpractice
claims, but also the statutory and decisional law governing
Under the Statute of Limitations, the time within which
a plaintiff must commence an action "shall be computed from the
time the cause of action accrued to the time the claim is
interposed" (CPLR 203 [a]). While courts have discretion to waive
other time limits for good cause ( An action to recover damages arising from an attorney's
malpractice must be commenced within three years from accrual
(see CPLR 214 [6]). A legal malpractice claim accrues "when all
the facts necessary to the cause of action have occurred and an
injured party can obtain relief in court" (Ackerman v Price
In a legal malpractice action, a plaintiff must show
that an attorney "failed to exercise the ordinary reasonable
Feinman concedes he was negligent in representing
plaintiff in her divorce. His concession, however, does not end
the case. The parties dispute which negligent acts or omissions
caused what injury, and, most critically, they disagree as to
when plaintiff's actionable injury occurred so as to trigger
accrual of the malpractice claim. To resolve these disputes, we
must examine the statutory and decisional law governing
stipulations of settlement and distributions under employee
benefit plans. Stipulations not only provide litigants with
predictability and assurance that courts will honor their prior
agreements (see Kaplan v Kaplan, , 82 NY2d 300, 307 [1993]), but
also promote judicial economy by narrowing the scope of issues
for trial (see Hallock v State of New York, , 64 NY2d 224, 230
Where a stipulation meets these requirements, as it
does here, courts should construe it as an independent contract
subject to settled principles of contractual interpretation (see
Keith v Keith, 241 AD2d 820, 822 [3d Dept 1997]; De Gaust v De
Gaust, 237 AD2d 862, 862 [3d Dept 1997]). As with a contract,
courts should not disturb a valid stipulation absent a showing of
good cause such as fraud, collusion, mistake or duress (see e.g.
Hallock, 64 NY2d at 230; Matter of Frutiger, , 29 NY2d 143, 150
[1971]]); or unless the agreement is unconscionable (see
Christian v Christian, , 42 NY2d 63, 73 [1977]; Mosler Safe Co. v
Maiden Lane Safe Deposit Co., 199 NY 479, 485 [1910]) or contrary
to public policy (see e.g. Eschbach v Eschbach, , 56 NY2d 161, 171
[1982]); or unless it suggests an ambiguity indicating that the
words did not fully and accurately represent the parties'
agreement (see e.g. Keith, 241 AD2d at 822). In representing plaintiff at the settlement of her
matrimonial action, Feinman placed on the record the parties'
agreement regarding the ex-husband's employee benefit plan. He
Plaintiff's reliance on Majauskas is unavailing.
Critically, Majauskas governs equitable distribution of all
pension-related benefits -- both retirement and survivorship --
earned during the marriage (see Majauskas, 61 NY2d at 495).
Parties to a matrimonial action might agree that Majauskas will
govern equitable distribution of an employee-spouse's pension
benefits, yet also agree that the non-employee spouse will
receive only retirement benefits and not pre-retirement death
benefits (see e.g. Von Buren v Von Buren, 252 AD2d 950, 950-951
[1998]). Thus, Majauskas can govern equitable distribution of
pre-retirement death benefits earned during the marriage, but
mere mention of Majauskas does not by itself establish the
parties' intent to allocate those benefits. Likewise, a
Because Feinman's stipulation was not ambiguous and did
not cover pre-retirement death benefits, it did not entitle
plaintiff to receive those benefits; nor did the judgment, which
merely incorporated that stipulation. Nevertheless, plaintiff
asserts that her actionable injury also resulted from Feinman's
continuing failure to obtain the QDRO. Had Feinman obtained the
QDRO (plaintiff's argument goes), he could have asserted
plaintiff's eligibility to receive pre-retirement death benefits.
To discern whether the timeliness analysis turns on Feinman's
failure to obtain the QDRO, we turn next to the law governing
domestic relations orders and employee benefit plans. The employee benefit plan in question is subject to
ERISA.[3]
Under ERISA, a divorce judgment terminates a spouse's
A proper QDRO obtained pursuant to a stipulation of
settlement can convey only those rights to which the parties
stipulated as a basis for the judgment. An alternative result
Here, because Feinman's stipulation did not establish
plaintiff's right to pre-retirement death benefits and the
divorce judgment did not provide for any, the entry of a QDRO
reflecting the terms of the stipulation or divorce judgment would
not have rendered plaintiff eligible to receive those benefits.
We therefore conclude that Feinman's failure to include pre-
retirement death benefits in either the stipulation or the
judgment, and not his negligent failure to obtain a QDRO, was the
cause of plaintiff's injury. This result accords with sound public policy. The
United States Supreme Court has recognized that ERISA's anti-
assignment provision "reflects a considered congressional policy
choice, a decision to safeguard a stream of income for pensioners
(and their dependents, who may be, and perhaps usually are,
blameless), even if that decision prevents others from securing
relief for the wrongs done them. If exceptions to this policy
are to be made, it is for Congress to undertake that task"
Because Feinman was negligent in failing to assert
plaintiff's claim to pre-retirement death benefits in the
stipulation or judgment, we conclude that plaintiff suffered
actionable injury on the day of the stipulation (June 23, 1987),
or at the latest, on the day the judgment incorporating the
stipulation was filed in the county clerk's office (June 14,
1988). Because we perceive no reason that plaintiff's damages
were not then sufficiently calculable to permit plaintiff to
obtain prompt judicial redress of that injury, we conclude that
plaintiff had a complete cause of action on the day the divorce
judgment was filed. Inasmuch as plaintiff brought this action on
June 12, 1996 -- more than three years later (see CPLR 214 [6]) --
plaintiff's suit is time-barred (see CPLR 203 [a]). Plaintiff asserts, however, that the Shumsky continuous
representation doctrine tolled the limitations period until
defendants closed plaintiff's file on January 9, 1996. We
disagree. The continuous representation doctrine tolls the
Statute of Limitations only where there is a mutual understanding
of the need for further representation on the specific subject
matter underlying the malpractice claim. Here, the malpractice
that caused plaintiff's injury was defendants' failures in
connection with the stipulation and judgment, and no further
representation thereon was then contemplated. Even were we to grant plaintiff's argument that it was
Feinman's failure to obtain a QDRO that constituted actionable
negligence, Feinman told the court that he would file the QDRO
with the court "simultaneously with or shortly after the judgment
of divorce." Thus, plaintiff might have been justified in
believing that Feinman continued to represent her on this
specific matter until "shortly after" the 1988 entry of the
divorce judgment, but not eight years later when plaintiff
brought this action. Moreover, as the Appellate Division majority aptly
noted, the limitations period could become incalculable were we
to adopt plaintiff's argument that Feinman's continuing failure
to file the QDRO tolled the malpractice action under the
continuous representation doctrine. Except where a date of
discovery rule applies, our law cannot permit a limitations
Finally, Feinman's representation of plaintiff in the
Family Court action did not sufficiently toll the limitations
period to save plaintiff's cause of action. That action was
unrelated to the QDRO. Even were we to deem the limitations
period tolled until the support action concluded in 1991, another
seven years elapsed before plaintiff filed suit in 1998. Thus,
even under this hypothesis, the three-year limitation of CPLR 214 (6) still renders this action untimely. Plaintiff's remaining contentions are either
unpreserved or without merit. Accordingly, the order of the Appellate Division should
be affirmed, without costs.
1 In Duffy v Horton Mem. Hosp. (66 2 473, 475 1985]),
however, we recognized the relation back doctrine in third-party
practice. Likewise, in Borgia v City of New York (12 2 151
[1962]), we recognized the continuous treatment doctrine later
codified in CPLR 214 -a, and in Shumsky (96 2 at 168) we
extended the continuous treatment toll to cases of continuous
representation by an allegedly negligent attorney. We address
Shumsky and plaintiff's continuous representation argument in
Part V, 2 As we observed in Blanco v American Tel. & Tel. Co. (90
2 757, 772 [1997]), if there is injustice in the operation of
CPLR 214 (6), the Legislature has not seen fit to ameliorate the
statute's effects by enacting a date of discovery rule. We note
that the Legislature has used date of discovery principles to
soften CPLR 214 for "foreign object" cases of medical malpractice
(see e.g. Rodriguez v Manhattan Med. Group, P.C., , 77 NY2d 217,
218 [1990]; CPLR 214 -a), exposure to Agent Orange during the
Vietnam War (see CPLR 214 -b) and exposure to other toxic
substances (see e.g. Matter of New York County DES Litigation, , 89 NY2d 506, 511-512 [1997]; CPLR 214 -c). The Legislature has even
revived causes of action after the applicable limitations period
had expired (see CPLR 214 -e [reviving time-barred actions to
recover damages for personal injury caused by infusion of AIDS-
tainted blood products]). If the Legislature chooses not to
apply date of discovery principles in other professional
malpractice settings, this Court should not tread where the
Legislature refuses to go (see CPLR 201 ). 3 ERISA is a comprehensive Federal statute "designed to
promote the interests of employees and their beneficiaries in
employee benefit plans" (Nealy v US Healthcare HMO, , 93 NY2d 209,
217 [1999], rearg denied , 93 NY2d 958). ERISA "subjects employee
benefit plans to participation, funding and vesting requirements
as well as rules regarding reporting, disclosure and fiduciary
responsibility" (id.; see 29 USC § 1001 1021 et seq.; see also
Shaw v Delta Air Lines, Inc., 463 US 85, 90-91 [1983]). 4 Under ERISA and the Internal Revenue Code, "assignment"
includes "[a]ny direct or indirect arrangement * * * whereby a
party acquires from a participant or beneficiary a right or
interest enforceable against the plan in, or to, all or any part
of a plan benefit payment which is, or may become, payable to the
participant or beneficiary" (26 CFR § 1.401[a]-13[c][1][ii]; see
Robbins v DeBuono, 218 F3d 197, 203 [2d Cir 2000], cert denied
sub nom. 5 ERISA defines a "Qualified Domestic Relations Order" to
include a judgment or settlement of divorce "which creates or
recognizes the existence of an alternate payee's right to, or
assigns to an alternate payee the right to, receive all or a
portion of the benefits payable with respect to a participant
under a plan" (29 USC § 1056[d][3][B][i][I]).see CPLR 2004 ), the Legislature
has specifically enjoined that "[n]o court shall extend the time
limited by law for the commencement of an action" (CPLR 201 ; see
Fourth Ocean Putnam Corp. v Interstate Wrecking Co., Inc., , 66 NY2d 38, 43 [1985]; see generally Siegel, NY Prac § 33, at 40 [3d
ed 1999]).[1]III.
IV.
see
29 USC § 1056[d][1], [3][A]-[D]).
Footnotes