Attorneys Are Always Fiduciaries; Accountants Not So Much
Attorneys are subject to a triumvirate of claims, which may generally be: legal malpractice in tort, legal malpractice in contract and breach of fiduciary duty. Attorneys are fiduciaries of their clients, but interestingly, accountants (even CPAs) are not. In Knockout Vending Worldwide, LLC v Grodsky Caporrino & Kaufman CPA's, P.C. 2012 NY Slip Op 31855(U) Supreme Court, Suffolk County Judge: Elizabeth H. Emerson we see the distinction.
In this case business buyers claim they were defrauded when business sellers artificially inflated the value of the business through fraud. They sue sellers, sundry others, and their CPAs whom they say were hired to do the due diligence on the value of the business.
"Turning to the motion by the Kauman defendants to dismiss the second cause of action, according the plaintiffs the benefit of every possible favorable inference as a general rule, the plaintiffs have failed to state a second cause of action alleging a breach of fiduciary duty. TheCourt notes that the plaintiffs have alleged a cause of action for accounting malpractice. The existence of negligence claims, however, docs not create a fiduciary relationship between the Kaufman defendants and the plaintiffs (Friedman v Anderson, 23 AD3d 163). In general, there is no fiduciary relationship between an accountant and his client (DG Liquidation, Inc. v Anchin, Block & Anchin, 300 AD2d 70). "A conventional business relationship, without more, does not become a fiduciary relationship by mere allegation" (Friedman v Anderson, supra at 166, Oursler v Women's Interart Center, Jnc., 170 AD2d 407, 408). Here, the complaint alleges that the Kaufman defendants were the plaintiffs' personal accountants, and that the plaintiffs placed confidence in the Kaufman defendants' advice and opinions as professional accountants, consultants and advisors. However, while providing financial advice may be within the scope or an accountant's duties, and so within the definition of a conventional business relationship, the standard that plaintiffs must meet to sustain a cause of action for breach of fiduciary duty has not been met (Staffenberg v Fairfield Pagma Assoc., L.P., 2012 NY AppDiv LEXIS 3423, citing Friedman v Anderson, supra at 166; ef Lavin v Kaufman, Greenhut, Lebowitz & Forman, 226 AD2d 107). Accordingly, the Kaufman defendants' motion to dismiss the second cause of action is granted."