Sometimes short and concisely written opinions contain much information.  The basics of  Jefferson Apts., Inc. v Mauceri  2016 NY Slip Op 26230  Decided on July 25, 2016  Supreme Court, Queens County  Ritholtz, J. are simple.  An accounting firm is hired to oversee the basic accounting needs of a corporation.  Lots of money is missing.  It takes a while to figure out that there is a problem.  What happens to the professional negligence suit?

Continuous representation: “The “continuous treatment” doctrine originated in medical malpractice cases to toll the running of the statute of limitations. This judicial exception was first encountered in 1902 in Gillette v. Tucker, 65 N.E. 865 (Ohio 1902). The Gillette court held that using the surgery date as the starting point for calculating the statute of limitations would improperly burden the victim by forcing her to sue the surgeon while her treatment continued or forego her cause of action. Id. at 871. Over 100 years later, the “continuous treatment” doctrine, adopted by the New York courts, has evolved to cover not only medical malpractice, but, under the name of the “continuous representation” doctrine, has been extended to other professions and occupations, [*2]such as accountants.

Proper analysis and application of the “continuous representation” doctrine tend to produce just results, as opposed to mindless invocation of a limitations defense. The instant motion deals, inter alia, with the application of the “continuous representation” doctrine as it relates to the tolling of the statute of limitations in an action alleging accountant or auditor malpractice.”

“On a motion to dismiss a cause of action pursuant to CPLR 3211(a)(5) on the ground that it is time-barred, a defendant bears the initial burden of establishing, prima facie, that the time in which to sue has expired (see, Bill Kolb, Jr., Subaru, Inc. v LJ Rabinowitz, CPA, 117 AD3d 978 [2014]; Kennedy v H. Bruce Fischer, Esq., P.C., 78 AD3d 1016, 1017 [2010]). The burden then shifts to the plaintiff to raise a question of fact as to whether the statute of limitations was tolled or was otherwise inapplicable or whether the action was actually commenced within the applicable limitations period (see, Kitty Jie Yuan v 2368 W. 12th St., LLC, 119 AD3d 674 [2014]; Beizer v Hirsch, 116 AD3d 725 [2014]; Williams v New York City Health & Hosps. Corp., 84 AD3d 1358, 1359 [2011].

Negligence claims made against a non-medical professional, whether based in tort or contract, are governed by a three-year statute of limitations (see, CPLR 214(6); see also, In the Matter of the Arbitration of R.M. Kliment & Frances Halsband and McKinsey & Company, Inc., 3 NY3d 538 [2004]; Chase Scientific Research, Inc. v NIA Group, Inc, 96 NY2d 20 [2001]; Ackerman v Price Waterhouse, 84 NY2d 535 [1994]). As to the accounting malpractice claim, absent fraud, such a claim accrues when the harm occurs, which is “when all the facts necessary to the cause of action have occurred,” regardless of whether the plaintiff has yet become aware of the error (see, Ackerman v Price Waterhouse, 84 NY2d 535, supra; Mitschele v Schultz, 36 AD3d 249, 252 [2006]). Here, the alleged transactions on January 8, 2010, January 25, 2010 and February 9, 2010 would have been disclosed as a receivable in the financial statement for the year ending June 30, 2010, which was issued on February 7, 2011. With regards to these claims for auditing/accounting services rendered prior to June 17, 2012, they are dismissed.

The continuous representation doctrine tolls the running of the statute of limitations on a claim arising from the rendition of professional services only so long as the defendant continues to advise the client “in connection with the particular transaction which is the subject of the action and not merely during the continuation of a general [*3]professional relationship” (Zaref v Berk & Michaels, 192 AD2d 346, 348 [1993] [citations omitted]; see also, Transport Workers Union of Am. Local 100 AFL-CIO v Schwartz, 32 AD3d 710, 713 [2006]; CLP Leasing Co., LP v Nessen, 12 AD3d 226, 227 [2004]; Dignelli v Berman, 293 AD2d 565, 566 [2002]). Thus, unless services relating to the particular transaction sued upon were rendered within the limitation period, even the defendant’s “general and unfettered control of [the plaintiff’s] financial, tax and investment affairs is insufficient to sustain the timeliness” of the action (Zaref, 192 AD2d at 348). Stated otherwise, where a professional advises a client in “a series of discrete and severable transactions” (Parlato v Equitable Life Assur. Socy. of U.S., 299 AD2d 108, 115 [2002], lv. to appeal denied, 99 NY2d 508 [2003]), the performance of services in each successive transaction does not serve to toll the running of the statute of limitations on any claim arising from the prior transaction (see, Booth v Kriegel, 36 AD3d 312, 314 [2006]).

In this case, plaintiff does not dispute that the statute of limitations would be three years prior to the commencement of this action on June 17, 2015. Plaintiff disputes whether the financial statements for the period of July 1, 2010 and June 30, 2011 (“the 2011 Financial Statement”), prepared by Mauceri are within the statutory period. Plaintiff argues that the claim for the 2011 Financial Statements accrued on the day Mauceri issued it to the Board, on or about September 28, 2012. Page 1 of Mauceri’s report dated September 28, 2012, provides, as herein relevant, as follows:

Plaintiff correctly argues that the “recertification” of the 2011 financials by Mauceri in his financial statement dated September 28, 2012, constituted an undertaking to perform further work for the 2011 audit. The continuous representation doctrine tolls the statute of limitations where there is a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim (McCoy v Feinman, 99 NY2d 295, 306 [2002]). Here, the recertification of the 2011 financials by Mauceri in his financial statement dated September 28, 2012, constituted an undertaking to perform further work on the 2011 audit.

The branch of the motion seeking dismissal of the professional malpractice claims based upon the audit performed on the 2011 financials by Mauceri is, therefore, denied. Plaintiff raised a question of fact as to whether the statute of limitations with regards to [*4]these transactions was tolled by the doctrine of continuous representation (see, Schwartz v Leaf, Salzman, Manganelli, Pfiel, & Tendler, LLP, 123 AD3d 901 [2014]; Howish v Perrotta, 84 AD3d 1312 [2011]; Symbol Tech., Inc. v Deloitte & Touche, LLP, 69 AD3d 191, 196 [2009]; Rehberger v Garguilo & Orzechowski, LLP, 50 AD3d 760[2008]). At a minimum there is an issue of fact as to whether Mauceri’s representation of plaintiff and the certification/recertification of the financial statement for the 2011 audit reflected a course of “continuous representation” intended to rectify or mitigate the initial act of alleged malpractice which occurred in connection with the preparation of the financials (see Weiss v Manfredi, 83 NY2d 974 [1994]; Kennedy v H. Bruce Fischer, Esq., 78 AD3d 1016 [2010]).”