On May 27, 2025, the First Department issued a decision in Mandour v. Rafalsky, 2025 NY Slip Op. 03160, holding that the continuous representation doctrine does not apply to a claim arising from a business transaction with an attorney, explaining:
Plaintiffs argue, as they did before Supreme Court, that the May 21, 2003 development agreement between Rafalsky, an attorney, and 10/3 Realty Corp., Rafalsky’s client, contravenes Rafalsky’s fiduciary duty to his client. Thus, plaintiffs conclude, the statute of limitations does not apply to plaintiffs’ claims because the contract was void at its inception. We reject this argument. An attorney may properly, as Rafalsky did here, contract with a client with respect to matters not involving legal services, or in addition to legal services. In the May 2003 development agreement, Rafalsky and 10/3 Realty Corp. agreed that Rafalsky agreed to develop certain property for 10/3 Realty; the agreement specifically stated that the agreement was not to include the provision of legal services and was for other than legal services or advice. The contract between Rafalsky and 10/3 Realty therefore evinced a financial transaction rather than the rendition of professional services.
Moreover, the statute of limitations was not tolled by the continuous representation doctrine, which does not apply to a dispute between an attorney and his client over a financial transaction, but rather, applies to an attorney’s alleged malfeasance in the provision of professional services on his client’s behalf. The plain language of the development agreement shows that 10/3 Realty and Rafalsky were engaging in a transaction separate and distinct from the attorney’s rendition of professional services on the client’s behalf. Indeed, even in their malpractice claim, plaintiffs allege that the development agreement constitutes an improper business transaction between an attorney and client.
(Internal quotations and citations omitted).