| Bill Kolb, Jr., Subaru, Inc. v LJ Rabinowitz, CPA |
| 2014 NY Slip Op 03791 [117 AD3d 978] |
| May 28, 2014 |
| Appellate Division, Second Department |
[*1]
| Bill Kolb, Jr., Subaru, Inc., Appellant, v LJRabinowitz, CPA, et al., Respondents. |
Condon & Associates, PLLC, Nanuet, N.Y. (Brian K. Condon and Laura M.Catina of counsel), for appellant.
Wilson, Elser, Moskowitz, Edelman & Dicker LLP, White Plains, N.Y.(Peter J. Larkin and Matthew L. Elkin of counsel), for respondents.
In an action to recover damages for professional malpractice, negligence, fraud,constructive fraud, and breach of fiduciary duty, the plaintiff appeals from an order of theSupreme Court, Rockland County (Alfieri, Jr., J.), dated February 28, 2013, whichgranted the defendants' motion pursuant to CPLR 3211 (a) to dismiss the complaint.
Ordered that the order is modified, on the law, by deleting the provision thereofgranting those branches of the defendants' motion which were to dismiss the causes ofaction to recover damages for professional malpractice and negligence and substitutingtherefor a provision denying those branches of the motion; as so modified, the order isaffirmed, with costs to the plaintiff.
The plaintiff is an automobile dealership. In or around 1998, the plaintiff engagedthe services of the defendant Leonard J. Rabinowitz, a certified public accountant. Theservices included, according to the plaintiff, review of the books and records of thedealership, as well as overseeing the work of the dealership's in-house controller. InMarch 2009, the plaintiff suspected that there were financial discrepancies in its booksand records. According to the plaintiff, at that time Rabinowitz reviewed the dealership'sbooks and records and assured the plaintiff that everything looked fine. Thereafter, theplaintiff engaged the services of a forensic accounting firm (hereinafter the forensicaccountant). The forensic accountant's audit revealed a $2.3 million discrepancy, part ofwhich could be accounted for. However, from December 31, 2004, through June 30,2009, funds totaling $829,184 were recorded as deposits on the plaintiff's "GeneralLedger," but such funds were never actually deposited in the dealership's bank account.In addition, the forensic accountant conducted a month-by-month review of cash receiptsfor a "test" time period of April 2008 through February 2009, revealing a cash shortageof $200,609.
Further investigation by the Rockland County District Attorney's Office led to theindictment of the in-house controller. In July 2012, the controller pleaded guilty to grandlarceny in the second degree and grand larceny in the third degree, and admitted tostealing $209,475.27 [*2]from the plaintiff. A conditionof the controller's sentence was restitution to the plaintiff in the amount of$209,475.27.
The plaintiff brought this action in February 2012 against Rabinowitz, individually,and against his accounting firm (hereinafter together the Rabinowitz defendants) torecover damages for, inter alia, professional malpractice, negligence, and breach offiduciary duty.
The Rabinowitz defendants moved, inter alia, pursuant to CPLR 3211 (a) (5) and (7)to dismiss the complaint, inter alia, as time-barred and for failure to state a cause ofaction. The Supreme Court granted the branch of the motion with respect to the statute oflimitations, finding that the plaintiff's causes of action to recover damages forprofessional malpractice, negligence, and breach of fiduciary duty were subject to athree-year statute of limitations period and were time-barred.
The Supreme Court erred in granting those branches of the Rabinowitz defendants'motion which were to dismiss the plaintiff's causes of action to recover damages forprofessional malpractice and negligence. On a motion to dismiss a cause of actionpursuant to CPLR 3211 (a) (5) on the ground that it is barred by the statute of limitations,a defendant bears the initial burden of establishing, prima facie, that the time in which tosue has expired (see Kennedy vH. Bruce Fischer, Esq., P.C., 78 AD3d 1016, 1017 [2010]; Island ADC, Inc. v BaldassanoArchitectural Group, P.C., 49 AD3d 815, 816 [2008]). The Rabinowitzdefendants failed to meet this burden with respect to any claims arising from servicesthey rendered on March 16, 2009. In considering the motion, a court must take theallegations in the complaint as true and resolve all inferences in favor of the plaintiff (see Sabadie v Burke, 47 AD3d913 [2008]; Matter ofSchwartz, 44 AD3d 779, 779 [2007]). The complaint alleges that theRabinowitz defendants negligently performed work for the dealership on March 16,2009, a date that falls within three years of the February 28, 2012, commencement of theaction. In any event, even if the Rabinowitz defendants had met their prima facie burden,in opposition to the motion, the plaintiff raised a triable issue of fact as to whether thestatute of limitations was tolled by the "continuous representation" doctrine, which wouldsuspend the limitations period until the completion of the professional services renderedby the Rabinowitz defendants (Regency Club at Wallkill, LLC v Appel Design Group, P.A.,112 AD3d 603, 606 [2013]; see Shumsky v Eisenstein, 96 NY2d 164,167-168 [2001]; Symbol Tech.,Inc. v Deloitte & Touche, LLP, 69 AD3d 191 [2009]). Accordingly, theSupreme Court erred in granting those branches of the Rabinowitz defendants' motionwhich were to dismiss the plaintiff's causes of action alleging professional malpracticeand negligence as time-barred pursuant to CPLR 3211 (a) (5).
However, the Supreme Court properly granted that branch of the Rabinowitzdefendants' motion which was to dismiss the plaintiff's cause of action alleging breach offiduciary duty. The Rabinowitz defendants were not fiduciaries of the dealership and,therefore, the complaint failed to state a cause of action (see Caprer v Nussbaum, 36AD3d 176, 194 [2006]; seealso Friedman v Anderson, 23 AD3d 163, 165 [2005]; DG Liquidation vAnchin, Block & Anchin, 300 AD2d 70, 70-71 [2002]).
The plaintiff's remaining contentions are without merit. Mastro, J.P., Chambers, Lottand Duffy, JJ., concur.