Luv N'Care, Ltd. v. Goldberg Cohen, LLP

16-3219
Luv N’Care, Ltd. v. Goldberg Cohen, LLP
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER
FILED ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF
APPELLATE PROCEDURE 32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY
ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX
OR AN ELECTRONIC DATABASE (WITH THE NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY
ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals
for the Second Circuit, held at the Thurgood Marshall
United States Courthouse, 40 Foley Square, in the City of
New York, on the 21st day of August, two thousand seventeen.
PRESENT: AMALYA L. KEARSE,
DENNIS JACOBS,
DEBRA ANN LIVINGSTON,
Circuit Judges.
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LUV N’ CARE, LTD; ADMAR
INTERNATIONAL, INC.,
Plaintiffs-Counter-
Defendants-Appellants,
-v.- 16-3219
GOLDBERG COHEN, LLP,
Defendant-
Counter-Claimant-Appellee,
LEE A. GOLDBERG; MORRIS E. COHEN,
Defendants-Appellees.
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FOR APPELLANTS: JACK M. WEISS (Carol W. Reisman
on the brief), Liskow & Lewis
LLP, New Orleans, LA.
Robert M. Chiaviello, Jr.,
Monroe, LA.
FOR APPELLEES: MORRIS E. COHEN (Lee A. Goldberg
on the brief), Goldberg Cohen
LLP, New York, NY.
Jeffrey S. Dweck, Law Firm of
Jeffrey S. Dweck P.C., New York,
NY.
Appeal from a judgment of the United States District
Court for the Southern District of New York (Buchwald, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
AND DECREED that the judgment of the district court be
AFFIRMED.
Luv N’ Care, Ltd. and Admar International, Inc.
(collectively “Luv N’ Care”) appeal from the judgment of
the United States District Court for the Southern District
of New York (Buchwald, J.), dismissing on motion Luv N’
Care’s legal malpractice claims as time-barred. Luv N’
Care had sued Lee Goldberg, Morris Cohen, and their law
firm (collectively “Goldberg Cohen”) for malpractice
arising out of various trial and patent proceedings. We
assume the parties’ familiarity with the facts, the
procedural history, and the issues presented for review.
2
1. Luv N’ Care argues that the district court
incorrectly held that its claims accrued in Louisiana, and
that the claims therefore must be timely under Louisiana
law. The New York “borrowing statute” states:
An action based upon a cause of action accruing
without the state cannot be commenced after the
expiration of the time limited by the laws of
either [New York] or the place without the state
where the cause of action accrued . . . .
N.Y. C.P.L.R. 202. “When a nonresident sues on a cause of
action accruing outside New York, C.P.L.R. 202 requires the
cause of action to be timely under the limitations period
of both New York and the jurisdiction where the cause of
action accrued.” Global Fin. Corp. v. Triarc Corp., 93
N.Y.2d 525, 528 (1999).
“When an alleged injury is purely economic, the place
of injury usually is where the plaintiff resides and
sustains the economic impact of the loss.” Id. at 529.
New York courts have suggested that legal malpractice
claims involve “purely economic” injuries. Cf. Dombrowski
v. Bulson, 19 N.Y.3d 347, 350, 352 (2012).
Whether or not all malpractice injuries are economic,
the specific loss claimed in this case is purely economic,
notwithstanding plaintiffs’ characterization that legal
3
malpractice damages a plaintiff’s “property rights” in its
legal claims and patents. This cause of action therefore
accrued “where the plaintiff resides,” Triarc, 93 N.Y.2d
at 529, which in Luv N’ Care’s case is the location of its
principal place of business, Robb Evans & Assocs. LLC v.
Sun Am. Life Ins., No. 10 Civ. 5999(GBD), 2012 WL 488257,
at *3 (S.D.N.Y. Feb. 14, 2012) (“Courts within the Second
Circuit have consistently held that a business entity’s
residence is determined by its principal place of
business.”).1 The complaint specifies Luv N’ Care’s
1
The New York Court of Appeals has not specifically
addressed whether a corporation’s residence is determined
(for purposes of the borrowing statute) by its principal
place of business or its state of incorporation. Despite
some conflicting authority, see, e.g., Gordon v. Gredno,
102 A.D.3d 584, 585 (1st Dep’t 2013); Verizon Directories
Corp. v. Continuum Health Partners, Inc., 74 A.D.3d 416(1st Dep’t 2010), the New York Court of Appeals would
likely hold that malpractice claims accrue at a
corporation’s principal place of business. That is because
the Court of Appeals has stated that, for purely economic
injuries, “the place of injury usually is where the
plaintiff resides and sustains the economic impact of the
loss.” Triarc, 93 N.Y. 2d 525 (emphasis added). It would
seem that an economic harm has greater effect on a for-
profit enterprise’s activities at its principal place of
business rather than at its place of incorporation.
4
principal place of business as Louisiana.2 Accordingly, Luv
N’ Care’s claim accrued in Louisiana.
Luv N’ Care challenges that determination on several
grounds; none have merit. For example, it argues (1) that
its injuries “accrued” at the place where Goldberg Cohen
committed legal malpractice, not where Luv N’ Care resides,
and (2) that Luv N’ Care’s injuries were not “purely
economic,” so the residency rule of the district court did
not apply.
Luv N’ Care claims to have raised these claims twice
in the district court, but neither filing contains the
arguments that Luv N’ Care now asserts. In one, Luv N’
Care argued that claims accrue in the state that has the
“greatest interest” in the dispute, a position that the New
York Court of Appeals has rejected for purposes of the
borrowing statute, Triarc, 93 N.Y.2d at 529, and that is
distinct from Luv N’ Care’s current argument. The other
filing is similarly off-point from the argument Luv N’ Care
urges on appeal.
2
The complaint also specifies that the principal place
of business of Luv N’ Care’s affiliate and co-plaintiff,
Admar International, is Louisiana.
5
These arguments were ultimately raised in Luv N’ Care’s
post-judgment motion. We will consider an argument,
otherwise forfeited, when it “was raised before the
district court in a post-trial brief, and was considered by
the district court.” Fortress Bible Church v. Feiner, 694
F.3d 208, 216 n.3 (2d Cir. 2012) (emphasis added).
However, the district court did not consider these new
arguments in its order denying Luv N’ Care’s motion, and we
decline to consider them for the first time on appeal.
Separately, Luv N’ Care argues that its co-plaintiff
Admar International is a resident of Delaware (its state of
incorporation) rather than Louisiana (its principal place
of business). Luv N’ Care’s brief mentions this argument
in a footnote. “We ordinarily deem an argument to be
forfeited where it has not been sufficiently argued in the
briefs, . . . such as when it is only addressed in a
footnote.” City of New York v. Mickalis Pawn Shop, LLC,
645 F.3d 114, 137 (2d Cir. 2011) (citation and quotation
marks omitted). Consequently, we do not consider this
argument.
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2. Luv N’ Care admits that, if Louisiana law applies,
Louisiana Revised Statutes § 9:5605(A)--provided it can be
borrowed3--governs Count One. The statute provides that
[n]o action for damages against any attorney at
law duly admitted to practice in this state, any
partnership of such attorneys at law, or any . . .
professional combination authorized by the laws of
this state to engage in the practice of law . . .
arising out of an engagement to provide legal
services shall be brought unless filed . . .
within one year from the date that the alleged
act, omission, or neglect is discovered or should
have been discovered; however, . . . in all events
such actions shall be filed at the latest within
three years from the date of the alleged act,
omission, or neglect.
Id.
Count One arose out of a lawsuit in which Luv N’ Care
sued a distributor for copying the design of one of its
products. Luv N’ Care asserts that Goldberg Cohen
committed malpractice by failing to include an additional
product line in that lawsuit.
3
Luv N’ Care argues that § 9:5605 is a statute of
repose (not just a statute of limitations), and that
statutes of repose cannot be borrowed by C.P.L.R. 202. Luv
N’ Care did not present that argument to the district court
before entry of judgment. Although Luv N’ Care made the
argument in a post-judgment motion, the district court did
not grapple with it in denying reconsideration. We see no
reason to consider the argument in the first instance. See
Fortress Bible Church, 694 F.3d at 216 n.3.
7
The trial court in that case imposed a deadline
requiring that pleadings be amended (e.g., to include
additional product lines) by April 2, 2012. Therefore, any
failure to include a product line must be measured from
that date. Louisiana law requires that all malpractice
suits “shall be filed at the latest within three years from
the date of the alleged act, omission, or neglect.” Id.
Luv N’ Care filed its initial complaint, which included
Count One, on November 23, 2015, outside the three-year
limitations period. It is therefore time-barred.
As to Counts Two through Five, Luv N’ Care argues that,
even if its claims accrued in Louisiana, the district court
should have looked to Louisiana Civil Code article 3492,
which permits limitations periods to be tolled in certain
circumstances.4 As is relevant here, under article 3492, as
is true under § 9:5605(A), a malpractice plaintiff’s claims
must be brought within one year of discovery. See Marin v.
Exxon Mobil Corp., 48 So. 3d 234, 244, 246 (La. 2010);
Stett v. Greve, 810 So. 2d 1203, 1209 (La. Ct. App. 2002).
4
Although Louisiana law uses the civil-law term
“prescriptive period” rather than “statute of limitations”
or “limitations period,” the concepts are essentially
equivalent for purposes of this appeal.
8
We conclude that, no matter which statute applies, Counts
Two through Five are all untimely.
a. Luv N’ Care conceded that Counts Four and Five
would be time-barred if Louisiana Law applied to them.
$ Count Four: “The Court: If Louisiana law applies,
you would agree that Count Four would be time
barred, correct? Mr. Chiavello: That’s correct,
your Honor.” S. App’x at 53.
$ Count Five: In discussing Count Five, counsel
stated that Luv N’ Care “became aware of the
problem with [Goldberg Cohen’s] strategy . . . on
April 21, 2014,” and indicated “that’s when the
error and omission was discovered.” S. App’x at
54. Luv N’ Care amended its complaint to add
Count Five on January 5, 2016, more than one year
after discovery.
b. Count Two alleges that Goldberg Cohen failed to
properly withdraw certain prosecution disclaimers. Luv N’
Care alleged in its Complaint that it was “forced to
concede . . . that the patent claims for which the prior
prosecution disclaimer[s] had remained in effect were not
infringed” on September 3, 2013, App’x at 215, the date on
9
which the district court found Luv N’ Care had discovered
its malpractice claim. Because Luv N’ Care filed the
instant complaint on November 23, 2015, the claim was not
brought within one year of discovery.
c. Count Three alleges that Goldberg Cohen mishandled
Luv N’ Care’s claims for attorneys’ fees in a case brought
in the United States District Court for the Eastern
District of Texas. Luv N’ Care’s instant complaint alleges
that Goldberg Cohen failed to inform the opposing party
about Luv N’ Care’s claim before filing suit, allegedly as
“required by Texas law as a condition precedent for the
recovery of attorney’s fees.” App’x at 218. Luv N’ Care
acknowledged, at oral argument before the district court,
that it was aware of the late filing when it was made on
March 20, 2014. Again, because Luv N’ Care filed the
instant complaint on November 23, 2015, the claim was not
brought within one year of discovery.
Consequently, all of Luv N’ Care’s claims are time-
barred.5
5
The continuous representation rule does not offer a
sufficient toll for any of Luv N’ Care’s claims because it
is undisputed that Goldberg Cohen ceased representing Luv
N’ Care, at latest, more than one year before Luv N’ Care
filed its complaint.
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3. Luv N’ Care asserts that the district court should
have granted it leave to amend. We review a district
court’s denial of leave to amend for abuse of discretion.
Block v. First Blood Assocs., 988 F.2d 344, 350 (2d Cir.
1993).
After Luv N’ Care filed its initial complaint, Goldberg
Cohen requested a conference to discuss its proposed motion
to dismiss on the ground of untimeliness. Both parties
filed letter-briefs regarding the proposed motion and the
district court conferred by phone with the parties. During
the conference, the district court (sua sponte) granted
plaintiffs an opportunity to amend their complaint. They
did so, and the district court held oral argument after
Goldberg Cohen renewed its motion on the amended complaint.
The district court granted the motion to dismiss.
Luv N’ Care had numerous opportunities to demonstrate
that its claims were timely. We cannot say that the
district court abused its discretion in denying leave to
amend to give Luv N’ Care yet another chance. See State
Trading Corp. of India v. Assuranceforeningen Skuld, 921
F.2d 409, 418 (2d Cir. 1990) (“[A] busy district court need
not allow itself to be imposed upon by the presentation of
11
theories seriatim.” (quoting Freeman v. Cont’l Gin Co., 381
F.2d 459, 469 (5th Cir. 1967)).
For the foregoing reasons, and finding no merit in Luv
N’ Care’s other arguments, we hereby AFFIRM the judgment of
the district court.
FOR THE COURT:
CATHERINE O’HAGAN WOLFE, CLERK
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