The headline is the story in a nutshell. When a retail business is sold to a new owner, there will always be old sales taxes due to the State, even if only for the last quarter. A procedure exists so that the buyer can immunize itself from being responsible for the unpaid sales taxes of the seller, and if one adheres to the rule, there will be no problems. Mission Cantina v Pan Asian Bistro Les, Inc. 2016 NY Slip Op 31570(U) August 16, 2016 Supreme Court, New York County Docket Number: 653581/2014 Judge: Debra A. James is an example. One rule is that papers have to be filed prior to the sale of the business. In this case, a bulk sales filing was made late, with a “backdated” type of filing. Supreme Court does not seem to have picked up on this. However, unless one can show malice, fraud or other unusual circumstances, one may not sue the opponent’s attorney.
“As to its complaint against Ahn, Buyer alleges that prior to the closing of the bulk sale transaction, which took place on July 8, 2013, Ahn, the attorney for the Seller, sent an e-mail message to defendant Elke E. Hofmann (“Hofmann”), the Buyer’s attorney, to which was attached a bulk sale notice that stated that the closing date was August 8, 2013. Buyer asserts that such date was a misstatement of the actual closing date, which took place a full month before such date. The complaint further alleges that after the closing, Ahn held $10,000 in her escrow account, which Ahn “finally paid on July 15, 2014” to the New York State Taxation and Finance Department (“Taxation Department”) toward the outstanding balance of sales taxes. Buyer also alleges that on October 3, 2013, eight months before remitting such payment, Ahn falsely advised Buyer’s counsel that the sale taxes for the restaurant that Seller, her client, collected prior to the bulk sale had been paid in full to the Tax Department and that Seller would provide a copy of the release that Seller received from the Taxation Department to Buyer. Such e-mail is attached to and incorporated by reference in the complaint.”
“The complaint does not contain any assertions as to the type of claim interposed against any of the defendants. The third cause of action, which is its only claim against Ahn, sounds in either legal malpractice, negligent representation and/or fraud against Ahn. As for any claims of legal malpractice or negligent representation, “[a]n attorney does not owe a duty of care to his adversary or one with whom he is not in privity” (Aglira v Julien & Schlesinger, PC, 214 AD2d 178, 183 [1st Dept 1995]). As in Aglira where the appellate court reversed the lower court’s denial of defendant law firm’s motion to dismiss the complaint of the underlying medical malpractice plaintiff against such attorneys who represented the medical doctors in that underlying action, here, there is no question that Ahn acted exclusively for her client, Seller, with respect to the bulk sale transaction, and therefore owed a duty of reasonable care only to Seller and owed no duty to Buyer, who was represented by attorney Hofmann. As to any fraud cause of action, as a matter of law, Buyer was not justified in relying upon the legal opinions or conclusions of his or her adversary counsel. Aglira, supra, at 185. Nor can Buyer claim to have consummated the bulk sale in justifiable reliance upon an e-mail message that Ahn sent months after the closing. Moreover, this court concurs with Ahn that the content of the e-mail from Ahn, which merely states that her client, Seller, advised Ahn both that the taxes were paid and that Seller received the release that Seller was trying to locate, disproves any alleged fraud or negligent representation on her part. ”