Accounting Malpractice and Continuous Representation
Accounting malpractice, like any other variant of professional malpractice (attorneys, brokers, financial professionals) are all subject to a three year statute of limitations, which may be tolled for continuous representation. In Ghiz v Schreck & Co. 2013 NY Slip Op 31869(U) August 9, 2013
Sup Ct, New York County Docket Number: 158805/2012 Judge: Eileen A. Rakower we see a description of the application of continuous representation.
"A cause of action charging 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. (See, CPLR §214[6).
As set forth in ATC Healthcare Inc. v. Goldstein, Golub & Kessler LLP, 28 Misc. 3d 1237(A), *3 (N.Y. Sup. July 26, 2010):
The continuous representation doctrine is an exception to the Statute of Limitations and applies only where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim. Symbol Technologies, Inc. v. Deloitte & Touche, LLP, supra, at p. 195 (citation omitted). That is, "the continuous representation must be in connection with the particular transaction which is the subject of the action and not merely during the continuation of a general professional relationship." Zaref v. Berk & Michaels, P. c., 192 A.D.2d 346, 347-48 (1 st Dept. 1993) (citations omitted). "[T]he facts are required to demonstrate
continued representation in the specific matter directly under dispute." Zaref v. Berk & Michaels, P. c., supra, at p. 348.
ATC Healthcare Inc., 28 Misc. 3d 1237(A) at *3.
Schreck contends that Plaintiffs' accounting malpractice claim is time barred because Plaintiffs filed the Complaint in the present action on December 12, 2012, more than three years after the embezzlement was allegedly discovered on August 27, 2009 and argues that it did not continue to represent Plaintiffs specifically with respect to the embezzlement because it "could not have done anything in any ongoing capacity to 'correct' or 'mitigate' the embezzlement." However, the Complaint alleges that "Defendant Schreck continuously represented plaintiffs regarding claims
by various government bodies as to said tax penalties and liabilities up and until September 2012 as well as rendered its usual and customary services to plaintiffs and attempted to restate and correct the mistakes made during the period of defendant Schreck's malfeasance."