Lehman Bros., Inc. v. Hughes Hubbard & Reed, L.L.P.

• Decision Date: 22 December 1998
• Citation: 707 N.E.2d 433,684 N.Y.S.2d 478,92 N.Y.2d 1014
• Parties: , 707 N.E.2d 433, 1998 N.Y. Slip Op. 11,380 LEHMAN BROTHERS, INC., Formerly Known as Shearson Lehman Brothers, Inc., Formerly Known as Shearson Lehman Hutton, Inc., et al., Appellants, v. HUGHES HUBBARD & REED, L.L.P., Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 478

684 N.Y.S.2d 478

92 N.Y.2d 1014, 707 N.E.2d 433, 1998

N.Y. Slip Op. 11,380

LEHMAN BROTHERS, INC., Formerly Known as Shearson Lehman

Brothers, Inc., Formerly Known as Shearson Lehman

Hutton, Inc., et al., Appellants, v. HUGHES HUBBARD & REED, L.L.P., Respondent.

Court of Appeals of New York.

Dec. 22, 1998.

Kenneth Reed Wynne, of the Texas Bar, Houston, TX, admitted pro hac vice, and Lehman & Gikow, P. C., New York City (David H. Gikow of counsel), for appellants.

Hughes Hubbard & Reed, L.L. P., New York City (Theodore V.H. Mayer, John Fellas and Carol E. Remy of counsel), for respondent, pro se.

OPINION OF THE COURT MEMORANDUM.

The order of the Appellate Division should be affirmed, with costs.

The issue here is whether the present action was timely commenced in this State by invocation of the statutory tolling provision under CPLR 205(a) when the same action was previously dismissed by the courts of Texas for defendant's lack of minimum contacts with that State. In determining this appeal, we assume, without deciding, the applicability ofCPLR 205(a) and conclude that plaintiff's New York action was untimely, since it was commenced more than six months after termination of the Texas action. We do not reach any of the other issues presented.

On July 11, 1996, plaintiff Lehman Brothers, Inc. commenced this legal malpractice action in Supreme Court, New York County, against the New York law partnership of Hughes Hubbard & Reed. The complaint alleged that for a period of time ending in 1988 defendant, acting through its Los Angeles office, gave plaintiff incomplete legal advice on a matter of Texas law. Defendant filed a preanswer motion to dismiss claiming the action was time-barred. In response, plaintiff argued that the New York Statute of Limitations had been tolled because this same claim had previously been filed in the Texas trial court, the Texas District Court, on July 16, 1991 and dismissed by that court on December 16, 1992. That claim was dismissed for lack of personal jurisdiction based upon defendant's lack of minimum Texas contacts.

Plaintiff appealed as of right to the Texas intermediate appellate court, the Texas State Court of Appeals, where, on June 1, 1995, a three-Judge panel affirmed the dismissal in all respects (see, Shearson Lehman Bros. v. Hughes, Hubbard, & Reed, 902 S.W.2d 60 [Ct App Tex 1995] ). On July 13, 1995, plaintiff's request to the same court for a rehearing was summarily denied. Thereafter, plaintiff sought discretionary review by the Texas Supreme Court but, on November 22, 1995, that court denied the application, without opinion. Similarly, on January 11, 1996, a request for rehearing to the Texas Supreme Court was denied. Finally, on June 10, 1996, plaintiff's petition to the United States Supreme Court for writ of certiorari was denied (517 U.S. 1245, 116 S.Ct. 2500, 135 L.Ed.2d 191).

Following the denial of certiorari, on July 11, 1996, plaintiff filed the instant New York action. In granting defendant's preanswer motion to dismiss, Supreme Court noted that, absent the CPLR 205(a) tolling provision, all applicable Statute of Limitation periods had otherwise expired. The court concluded that because plaintiff's Texas action was dismissed for want of personal jurisdiction, the CPLR 205(a) tolling provision was...