Seyburn, Kahn, Ginn, Bess, Deitch & Serlin, P.C., v. Bakshi, ___ N.W.2d ___, 2008 WL 867382 (Mich. App. 2008)

Brief Summary
Even if a firm later performs ministerial services for a client, the limitations period for a law firm’s action to collect unpaid fees begins upon termination of the attorney-client relationship.

Complete Summary
Plaintiff Seyburn sought unpaid legal fees from former client Bakshi. In 1992, while in litigation, Bakshi stopped paying Seyburn. In September 1993, and with the court’s permission, Seyburn withdrew representation of Bakshi. The following month, Bakshi requested his file and Seyburn complied.

Because the statute of limitations on Seyburn’s action for unpaid fees was six years, and because Seyburn brought this action on October 9, 1999, the dispositive issue was when the limitations period began. Seyburn argued that the period began when it complied with Bakshi’s file request, but the court held that the period began upon Seyburn’s withdrawal from representation, thus rendering Seyburn’s claim time-barred.

Since this was a matter of first impression in Michigan, the court looked to analogous and outside authority. The court found the reasoning in Pellettieri, Rabstein and Altman v. Protopapas, 383 NJ Super 142 (2006) helpful even though the issue was somewhat different (i.e., attorney’s cause of action accrued upon termination of attorney-client relationship rather than when the client stopped paying). The Pellettieri court had reasoned that because attorneys cannot unilaterally withdraw from representation in litigation and therefore cannot immediately sue upon a client’s failure to pay, the limitations period should not begin until the attorney-client relationship is fully terminated.

Extending this reasoning, the Seyburn court noted that after termination of the attorney-client relationship, the attorney’s duties to the client are minimal and that Seyburn’s compliance with the file request did not constitute continuing representation. Seyburn had in effect admitted as much in defense of an earlier malpractice action brought by Bakshi when Seyburn argued that the malpractice limitations period began upon termination of the relationship rather than when Seyburn handed over the files.

Significance of Opinion
This opinion is consistent with malpractice jurisprudence in Michigan, which links the beginning of the relevant limitations period to the termination of the actual attorney-client relationship.

This alert has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.

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