Plaintiff may have had a good claim against his accountants, maybe not. The merits will not be reached because of an unusual choice of venues, and the method by which the case was first brought in NY County and then in Westchester County. The choices caused a procedural catastrophy.
In EB Brands Holdings, Inc. v McGladrey, LLP 2017 NY Slip Op 06923 [154 AD3d 646] October 4, 2017 Appellate Division, Second Department ended the entire case on statute of limitations, when it had originally been timely brought.
“The plaintiff commenced this action to recover damages, inter alia, for professional malpractice against the defendant, an accounting firm that provided auditing services to the plaintiff from 2000 through 2011. Each year, the plaintiff and the defendant entered into an engagement agreement (hereinafter the engagement letter) pursuant to which the defendant performed auditing services for the plaintiff for that year. The last engagement letter between the parties, dated December 19, 2011 (hereinafter the 2011 engagement letter), provided, inter alia, that any claim arising out of services rendered pursuant to that agreement would have to be filed within two years after the issuance of the audit report by the defendant. On May 4, 2012, the defendant issued an audit report to the plaintiff for the year ending December 31, 2011, pursuant to the 2011 engagement letter.
The plaintiff has alleged, inter alia, that the defendant negligently performed the [*2]audits it was required to do pursuant to the engagement letters for the years 2009 through 2011; specifically, the plaintiff has alleged that the defendant overstated the plaintiff’s accounts receivable and inventory figures for several years, and failed to adequately verify those figures in light of the plaintiff’s agreements with purchasers of its products.
Prior to commencing this action in the Supreme Court, Westchester County, in 2013, the plaintiff brought an action against the defendant in the Supreme Court, New York County (hereinafter the New York County action) asserting similar contentions. An order dated August 14, 2014, in the New York County action granted the defendant’s motion for summary judgment dismissing that complaint, without prejudice, on the ground that the complaint failed to state a cause of action. The court granted the plaintiff leave to replead in that action.
Thereafter, rather than amending its complaint in the New York County action, on September 8, 2014, the plaintiff commenced this action in the Supreme Court, Westchester County. In a judgment entered January 26, 2015, the Supreme Court, New York County, dismissed the New York County action pursuant to the plaintiff’s voluntary discontinuance of that action without prejudice.
After the dismissal of the New York County action, the defendant moved pursuant to CPLR 3211 (a) for dismissal of the complaint in this action, in Westchester County, alleging, among other things, that the action is barred by the statute of limitations. The Supreme Court granted the defendant’s motion and dismissed the complaint. The plaintiff appeals.”