Client hires attorney to do Surrogate’s Court case. Attorney hires CPA to do Estate tax returns. CPA fails to file the returns timely and loses a six-figure refund on the statute of limitations. CPA is sued and motion practice follows. In Mazur Carp & Rubin, P.C. v Cohen & Schaeffer, C.P.A., P.C. 2019 NY Slip Op 31735(U) June 18, 2019 Supreme Court, New York County Docket Number: 153583/2014 Judge: Kathryn E. Freed mostly finds for Plaintiff.
“Plaintiffs Mazur Carp & Rubin, P.C. (“Mazur CarP”), Karen Cashman (“Cashman”), and David Gallagher (“Gallagher”) move, pursuant to CPLR 3212, for summary judgment on their causes of action for accounting malpractice and breach of1:contract. They further move to dismiss the counterclaims of defendant Cohen & Schaeffer, C.P.A., P.C. (“Cohen & Schaeffer”). Cohen & Schaeffer opposes the motion and cross-moves, pursuant to CPLR 3212, for summary judgment
on its counterclaims. Plaintiffs oppose the cross-motion. After oral argument, and after reviewing
the parties’ papers and the relevant statutes and caselaw, it is ordered that the motion and cross
motion are decided as follows.”
“The first issue before this Court is whether plaintiffs have established a prima facie case of
accounting malpractice against Cohen & Schaeffer. This Court finds that plaintiffs have done so.
“A claim of professional negligence requires proof that there was a departure from accepted
standards of practice and that the departure was a proximate cause of [plaintiff’s] injury.” (D.D .
Hamilton Textiles, Inc. v Estate of Mate, 269 AD2d 2 I 4, 215 [1st Dept 2000].) Plaintiffs’ expert
witness, Basile, identifies several provisions of Title 31 of the Code of Federal Regulations from
which Cohen & Schaeffer may have departed. (Doc. 22.) Specifically, Basile cites § 10.36 of the
statute, which provides that accounting firms shall have “adequate procedures” to ensure
compliance with regulations governing accounting standards and practices. (Id. at 7-8.) Plaintiffs
have further shown that there was a substantial lapse in comunication between them and Cohen
& Schaeffer (Doc. 16 at 25), and that Cohen & Schaeffer produced the prepared tax return in April
of 2012 (Doc. 8 at 9), over one year after the statute of limitations for a federal tax refund had run. Because the estate would have received a refund but for Cohen & Schaeffer’s late preparation of
Grant’s individual taxes, plaintiffs have established their prima facie case on their first cause of
action for accounting malpractice. ”
“The last issue before this Court is whether Cohen & Schaeffer’s counterclaims for breach
of contract and negligence should be dismissed. (Doc. 8 at 18-20.) As previously discussed, the
breach of contract claim is dismissed pursuant to CPLR 3211 (a)( 1 ). Thus, the only remaining issue
is whether Cohen & Schaeffer’s counterclaim for negligence must be dismissed. “To prevail on a negligence cause of action, a [party] must establish the existence of a legal duty, a breach of that duty, proximate causation, and damages.” (MVB Collision, Inc. v Allstate Ins. Co., 129 AD3d I 041, 1042 [2d Dept 2015].) This Court cannot ascertain, based on the papers, what, if any, damages Cohen & Schaeffer has suffered; if any party has suffered damages in this litigation, it is the estate. Moreover, in asserting its counterclaims in its answer, Cohen & Schaeffer did not allege that it sustained damages. (Doc. 11 at 5-6.) Rather, defendant pleaded as follows:
“Consequently, plaintiff … is obligated to pay any damages, including but not limited to any ‘lost’
refunds that might, otherwise, have inured to the benefit: of, inter alia, the Estate of LUCIE
MACKEY GRANT.” (Id. at 6.) Thus, Cohen & Schaeffer’s own pleading suggests that it is the estate which has sustained damages. Thus, the branch of Mazur Carp’s motion seeking to dismiss the counterclaim for negligence is granted pursuant to CPLR 321 l(a)(l). “