When might the professional be responsible for mistakes, yet given a pass because of the client’s conduct?  It happens with some regularity in the accountant malpractice area.  Accountant makes a professional error, yet client is unable to sue because it has “dirty hands.”  One frequent fact pattern is a rogue insider who causes problems that the accounting professionals should have detected.  They fail to detect the problems, and when sued, blame the rogue insider which then allows them to avoid all liability.  As an example CRC Litig. Trust v Marcum, LLP   2015 NY Slip Op 07811  Decided on October 28, 2015  Appellate Division, Second Department shows us how the accounting firm escapes suit.

“In an action, inter alia, to recover damages for accounting malpractice, the plaintiff appeals from a judgment of the Supreme Court, Nassau County (Driscoll, J.), dated July 12, 2013, which, upon an order of the same court dated June 20, 2013, granting the defendants’ separate motions pursuant to CPLR 3211(a) to dismiss the amended complaint insofar as asserted against each of them and denying the plaintiff’s cross motion for leave to amend the amended complaint, is in favor of the defendants and against it dismissing the complaint. The notice of appeal from the order dated June 20, 2013, is deemed to be a notice of appeal from the judgment dated July 12, 2013 (see CPLR 5512[a]).”

“In addition to the expiration of the statute of limitations as to the accounting malpractice causes of action against Marcum, the Supreme Court properly concluded that all of the plaintiff’s claims, against both defendants, were barred by the doctrine of in pari delicto, which “mandates that the courts will not intercede to resolve a dispute between two wrongdoers” (Kirschner v KPMG LLP, 15 NY3d 446, 464; see Schwartz v Leaf, Salzman, Manganelli, Pfiel & Tendler, LLP, 123 AD3d 901, 902). Contrary to the plaintiff’s contention, the allegations of the complaint do not implicate the “adverse interest” exception to the doctrine, because the allegations do not support a finding that the corporate insiders who allegedly committed the wrongdoing totally abandoned the corporation’s interests and acted entirely on their own (see Kirschner v KPMG LLP, 15 NY3d at 467-468; Chaikovska v Ernst & Young, LLP, 78 AD3d 1661, 1663-1664; cf. Symbol Tech., Inc. v Deloitte & Touche, LLP, 69 AD3d at 198).”