Leonard Global Macro Fund LLC v North Am. Globex Fund, L.P. 2014 NY Slip Op 32393(U) August 29, 2014 Sup Ct, New York County
Docket Number: 150346/13 Judge: Nancy M. Bannon illustrates the principal that standing by and waiting to sue may lead to a successful statute of limitations defense. For the most part actions against attorneys, accountants, and other non-medical professionals are subject to a three year statute of limitations which commences at the time of the error. There are few, if any, “discovery” statutes which might commence when the error is discovered. This hedge-fund gone wrong case illustrates the dangers of waiting.
“The. ninth and tenth causes of action purport to assert negligence and malpractice claims against Kurcias Jaffe, Sofo, Madison Grey and Strategic. Each of the defendants moves for dismissal of these claims based on the expiration of the statute of limitations. A claim for negligent misrepresentation is subject to a three-year statute of limitations (United States Fire Ins. Co. v North Shore Risk Mgt., 114 AD3d 408, 410 [1st Dept 2014]). Plaintiff alleges that it received the PPM, the DDQ and other investment-related documents in 2007 and that it invested in the Fund in January 2008 in reliance on these documents, Northstar, Peister, Geantasio and the Fund’s auditors and outside administrators (see Am. Cmplt., iii! 45- 47). Thus, any claim based on negligent misrepresentation was time-barred as of January 2011. The sixth cause of action is dismissed as against Geantasio, Kurcias Jaffe and Sofo. Negligence is governed by a three-year statute oflimitations (CPLR 214 [4]). “A cause of action alleging professional malpractice, i.e., that a professional failed to perform services with due care and in accordance with the recognized and accepted practices of the profession, is governed by the three year Statute of Limitations applicable to negligence actions” (Fred Smith Plumbing & Heating Co. v Christensen, 233 AD2d 207, 208 [!st Dept 1996]). A claim alleging accountant malpractice accrues when the malpractice is committed, i.e., upon the receipt of the accountant’s work product (Williamson v.PricewaterhouseCoopers, LLP, 9 NY3d 1, 7-8 [2007]). On February 13, 2009, Kurcias Jaffe sent a letter.to the Fund, its partners and investors stating that it had resigned as the auditor of the Fund for the year ending December 31, 2007 21 [* 21] “because of our inability to complete the audit based upon the information provided by the Company” (Knopf Affirm., Ex. 3). The statute of limitations for negligence and/or malpractiCe claims by Kurcias Jaffe and Sofo expired on February 14, 2012. MadisonGrey was replaced as the outside auditor in June 2008 and Strategic resigned on January 13, 2009 (Am. Cmplt., ii 85; Carpenter Aff., Ex. J). Accordingly, the ninth and tenth causes of action are dismissed against Kurcias Jaffe, Sofo, MadisonGrey and Strategic, pursuant to CPLR 3211 (a) (5).”