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A Better Partnership
May 06, 2009

MSC Oral Argument: Seyburn, Kahn v. Bakshi

On May 5, 2009, the Supreme Court heard oral argument in Seyburn, Kahn, Ginn, Bess, Deitch and Serlin, P.C. v. Kirit Bakshi, No. 136436. The Supreme Court granted leave to consider when a statute of limitations accrues in an attorney's lawsuit to recover unpaid fees from a client. The Court's order granting leave can be found here. The parties' briefs are available here and here.

In 1989, Bakshi hired the law firm Seyburn, Kahn, Ginn, Bess & Serlin, P.C. to represent him and his companies in multiple matters. Bakshi paid the law firm for its legal services until November 1992, at which time he stopped making payments. The law firm withdrew from representing Bakshi on September 30, 1993, and in October 1993, it reviewed and provided its relevant litigation files to Bakshi. The law firm sent Bakshi a final invoice showing the total unpaid balance for its services and certain costs and fees relating to the return of Bakshi's files. Bakshi did not pay the invoice.

On October 8, 1999, the law firm sued Bakshi to recover the unpaid legal fees. Bakshi argued that the six-year statute of limitations on this claim had expired, because the breach of contract claim accrued in November 1992 when Bakshi stopped paying the invoices. Bakshi further argued that if the law firm was proceeding under an open account theory, the claim would have accrued in March 1993, before the firm withdrew from representing him and before the firm reviewed his files to return them to him, because that was the last date that the law firm performed services for his benefit.

The law firm responded that it performed legal services for Bakshi on October 12, 1993 when it returned his files, and therefore, the statute of limitations had not expired when the law firm filed its complaint.

The Court of Appeals held that the law firm's claim accrued on September 30, 1993, the date upon which the Court of Appeals issued its order terminating the law firm's representation of Bakshi, and therefore, that the statute of limitations had expired when the law firm filed its complaint.

On December 3, 2008, the Supreme Court granted the law firm's application for leave to appeal. Today, the Supreme Court will hear oral argument on the following issues: (1) whether the plaintiff's action was brought to recover the balance due upon a mutual and open account; (2) if so, whether MCL 600.5831 applies to an action brought by an attorney against his client to recover unpaid legal fees; (3) whether legal services performed after termination of an attorney-client relationship can be the "last item proved in the account" under MCL 600.5831; (4) whether there can be a "mutual and open account" after termination of an attorney-client relationship; and (5) whether a claim by an attorney against his client for unpaid legal fees always accrues on the date the attorney-client relationship ends.

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