Adam Leitman Bailey, P.C. successfully moved to vacate the tolling of the statute of limitations on potential claims against a client, as provided for in prior orders of the court, persuading the presiding judge that he had acted beyond his authority in having earlier tolled the statute of the limitations.

In 2024, the New York Attorney General’s office (“OAG”) served an Adam Leitman Bailey, P.C. client, a property management company that manages over forty residential properties in Manhattan, with an investigative subpoena. The subpoena sought a massive trove of documents regarding the client’s handling of applications for apartments from persons receiving governmental housing subsidies, its returning of security deposits to former tenants after they had vacated their apartments, its efforts to collect monies from tenants pursuant to lease provisions requiring them to provide advance notice of their intent not to renew their leases, and the eligibility of several buildings managed by the client for exemption from rent stabilization laws.

The client partially complied with the subpoena, but in January 2025 the OAG brought a proceeding to compel the completion of compliance with the subpoena. The OAG sought, among other relief, that the statute of limitations, on any potential claims against the client, be tolled until the client had complied fully with the subpoena. The Court in Supreme Court, New York County, initially extended the time for compliance until March 31, 2025 and tolled the statute of limitations until that date. Then, after the client moved for further extensions of the compliance period, the Court extended the deadline, but continued the tolling of the statute of limitations until the new compliance date. At the oral argument on the motion for this extension, Adam Leitman Bailey requested from the Court, and received, leave to make a motion on the issue of whether the Court had the authority to toll the statute of limitations.

In a motion to vacate the Court’s prior tolling of the statute of limitations, Adam Leitman Bailey, P.C. argued that, under New York state law, courts did not have the power to toll the statute of limitations, with the New York Civil Practice Law and Rules expressly prohibiting courts from extending limitations periods. Although New York state courts have power to toll the statute of limitations under the doctrine of equitable tolling, that doctrine applies only to causes of action under federal law, and most of the claims that the OAG asserted to be investigating arose under state rather than federal law. The OAG, in its opposition, argued that equitable estoppel applied, which can relieve a would-be plaintiff from the statute of limitations if an opposing party has engaged in fraudulent conduct such as to conceal from the potential plaintiff the existence of a cause of action. However, Adam Leitman Bailey, P.C. argued, in its reply on the motion, that no such fraudulent conduct was alleged against the client, and that the client’s having produced tens of thousands of pages’ worth of documents in response to the subpoena demonstrated that the purposeful concealment required for equitable estoppel was not present. Furthermore, as evidenced by the fact the investigation was occurring, based on OAG’s having received multiple complaints about the client, OAG already knew of allegations against the client and could have filed a complaint if it wanted to, without the need for discovery.

The Court held in favor of the client, finding, among other things, that there appeared to be no cases applying equitable estoppel to claims other than for malpractice, which was not at issue in the investigation, and that if equitable estoppel were extended to other types of claims, it would undermine the idea that equitable estoppel is an extraordinary remedy that should be invoked only under exceptional circumstances. Accordingly, the Court granted the client’s

motion, and vacated the portions of its prior orders that had previously tolled the statute of limitations.

It is rare for a court to vacate one of its prior orders, let alone several of them, but thanks to the skillful litigating of Adam Leitman Bailey, P.C., in this case the Court was able to achieve this result for the client.

Adam Leitman Bailey, Jeffrey R. Metz, and Brandon M. Zlotnick worked on the motion to vacate the tolling of the statute of limitations.