Arbitration clauses in professional malpractice settings are not absolute, but they can be very persuasive to Courts. When presented with defenses to an arbitration clause, or to other clauses contained in the agreement between client and professional, the Court may take up the issue and decide it, or it can send the issue to the arbitrator, as it did in Collins Bros. Moving Corp. v Pierleoni 2017 NY Slip Op 07586 Decided on November 1, 2017 Appellate Division, Second Department.
“On April 3, 2014, the plaintiffs commenced this action against Anchin, Phillip M. Ross, CPA, Christopher Kelly, CPA, Daniel Stieglitz, CPA, Vera Krupnick, CPA, Riz Ann F. Diva, CPA, Bridget Kralik, CPA, Amy Berger, CPA, and David Albrecht, CPA (hereinafter collectively the accounting defendants), among others, to recover damages for professional negligence, fraudulent concealment, aiding and abetting fraud, breach of fiduciary duty, breach of contract, violation of General Business Law § 349, and negligent misrepresentation. The accounting defendants moved pursuant to CPLR 7503(a) to, inter alia, compel mediation and arbitration of the causes of action asserted against them, pursuant to an arbitration provision in the letter agreements, and to bar the plaintiffs from “alleging any cause of action in arbitration based upon any events that occurred prior to April 3, 2011.” In opposition to the accounting defendants’ motion, the plaintiffs argued, among other things, that the limitations period was tolled by the continuous representation doctrine. By order dated February 18, 2015, the Supreme Court, inter alia, granted the accounting defendants’ motion, providing, among other things, that “any claims against the accounting defendants arising before April 2011 are barred from being heard in the mediation or arbitration.” The plaintiffs appeal.”
“Here, in opposition to the accounting defendants’ motion to bar arbitration of claims that were untimely under the three-year limitations period provided in the letter agreements, the plaintiffs did not contend that the accounting defendants had failed to meet their prima facie burden. Instead, the plaintiffs relied entirely on the continuous representation doctrine. In so doing, the plaintiffs alleged, in conclusory fashion, that “[t]he parties mutually contemplated ongoing representation following each annual review,” and that Anchin “had a continuing obligation to remedy defects in any consolidated financial statements.” The plaintiffs also submitted an affidavit of Webers, in which he averred, without any specificity, that “[r]evisions of prior years[‘] financial statements were routinely performed.” The plaintiffs’ evidence failed to raise a question of fact as to whether the limitations period contained in the letter agreements was tolled by the continuous representation doctrine (see Williamson v PricewaterhouseCoopers LLP, 9 NY3d at 9; Cusimano v Schnurr, 137 AD3d 527, 531; cf. Stein Indus., Inc. v Certilman Balin Adler & Hyman, LLP, 149 AD3d at 790; Bronstein v Omega Constr. Group, Inc., 138 AD3d 906, 908; Symbol Tech., Inc. v Deloitte & Touche, LLP, 69 AD3d at 196). Thus, the Supreme Court correctly determined that the continuous representation doctrine was inapplicable.
The accounting efendants failed, however, to submit any evidence that would have established which of the plaintiffs’ causes of action were untimely. The letter agreements provided [*2]for a three-year limitations period, as follows: “No action, regardless of form, arising out of the services under this agreement may be brought by either of us more than three years after the date of the last services for the year in dispute provided under this agreement.” Because the record before us does not establish the relevant “last services” dates, the determination of those dates and the consequent timeliness of the plaintiffs’ various causes of action must be made in further proceedings.”