Wait too long, and claims get stale. Wait too long and claims disappear. That’s exactly what happened in Johnson v Braverman CPA PC 2020 NY Slip Op 33149(U) September 25, 2020 Supreme Court, New York County
Docket Number: 650894/2020 Judge: Arlene P. Bluth. A big overpayment was no longer subject to amendment and a big claim against the accountant was late.
“This case arises out of defendant’s work for plaintiff as an accountant. Plaintiff alleges that he hired defendant to handle his taxes in 2014. In 2016, he insists that he told defendant to file amended tax returns for 2013, 2014 and 2015. Later that year, plaintiff contends that defendant told him he had a tax liability of nearly $100,000 from the 2013, 2014 and 2015 federal, New York and New Jersey tax returns. He alleges that defendant filed a petition with the IRS Appeals Office in May 2016 to correct errors of previously filed amended tax returns but missed an August 2016 deadline to respond.
Plaintiff alleges that he hired another accounting firm in December 2016 and it calculated plaintiff’s tax liability to be only about $13,000. He alleges a breach of contract claim against defendant for miscalculating plaintiff’s tax liability and a fraud cause of action”
“The Court grants the motion. The allegations in the amended complaint clearly suggest a cause of action for accounting malpractice, which has a three-year statute of limitations (CPLR
214). “The legislative history makes clear that where the underlying complaint is one which essentially claims that there was a failure to utilize reasonable care or where acts of omission or negligence are alleged or claimed, the statute of limitations shall be three years if the case comes within the purview of CPLR Section 214(6), regardless of whether the theory is based in tort or in a breach of contract” (In re R.M. Kliment & Frances Halsband, Architects (McKinsey & Co.,
Inc.), 3 NY3d 538, 541-42, 788 NYS2d 648  [internal quotations and citation omitted]).
And plaintiff’s accounting malpractice claim is time-barred. “There are circumstances where the statute of limitations is tolled, precluding dismissal on timeliness grounds although the alleged acts of negligence occurred more than three years prior to commencement of the action. This may occur where the parties engaged in a continuous professional relationship, such as where [the] same accounting firm provided ongoing services in addition to the yearly preparation of tax returns; however, this tolling of the statute is only appropriate where the continuous representation was in connection with the particular transaction which is the subject of the action” (Mitschele v Schultz, 36 AD3d 249, 252-53, 826 NYS2d 14 [1st Dept 2006]).
Here, defendant attached emails from plaintiff’s law firm to one of defendant’s employees in January 2017 instructing defendant to return plaintiff’s file (NYSCEF Doc. No. 42). It also submitted an affidavit from Mr. Braverman claiming that his work for plaintiff
terminated in response to those emails with plaintiff’s law firm and the files were shipped via FedEx on January 31, 2017 (NYSCEF Doc. No. 31, ¶¶16, 17).
The only logical conclusion is that the relationship with the parties ended in January 2017, at the latest, and this case was not commenced until February 7, 2020 more than three years later. The termination of plaintiff’s relationship with defendant—the demand for the return
of his files—starts the applicable limitations period (Mitschele, 36 AD3d at 253). “