| Weight v Day |
| 2015 NY Slip Op 09093 [134 AD3d 806] |
| December 9, 2015 |
| Appellate Division, Second Department |
[*1]
| Anne Crowley Weight, Appellant, v WayneDay et al., Respondents. |
Michael R. Varble & Associates, P.C., Poughkeepsie, N.Y., for appellant.
LeClairRyan, P.C., New York, N.Y. (Kenneth C. Beehler and Ronald S. Herzog ofcounsel), for respondents.
In an action, inter alia, to recover damages for accounting malpractice, the plaintiffappeals from an order of the Supreme Court, Orange County (Colangelo, J.), datedSeptember 5, 2014, which granted the defendants' motion pursuant to CPLR 3211 (a) todismiss the complaint.
Ordered that the order is modified, on the law, by deleting the provision thereofgranting that branch of the defendants' motion which was pursuant to CPLR 3211 (a) todismiss the causes of action alleging accounting malpractice and breach of fiduciaryduty, and substituting therefor a provision denying that branch of the motion; as somodified, the order is affirmed, with costs to the plaintiff.
For a number of years, the plaintiff jointly owned and operated a business known asWeight Steel Construction, Inc. (hereinafter Weight Steel), with her husband, nonpartyJoseph Weight. On or about September 30, 2009, while the plaintiff and her husbandwere engaged in divorce proceedings, they hired the defendant Wayne Day, a certifiedpublic accountant and a partner at the defendant accounting firm, Day Seckler, LLP, toserve as trustee of Weight Steel until the divorce was final. Accordingly, Day enteredinto an agreement with the plaintiff and her husband, as the sole shareholders of WeightSteel, which provided, in pertinent part, that Day would "assume sole responsibility forreceiving and disbursing the income" of Weight Steel, deliver copies of all such recordsto the plaintiff and her husband on a weekly basis, and continue acting as trustee untiltermination by a signed written agreement or court order. Day tendered his resignation asWeight Steel's trustee in a letter dated February 10, 2011.
On February 10, 2014, exactly three years after Day sent his resignation letter, theplaintiff commenced this action against the defendants, alleging, inter alia, accountingmalpractice, breach of fiduciary duty, fraud, and breach of contract. The plaintiff alleged,among other things, that Day failed to properly manage Weight Steel, prevent herhusband from needlessly using the company's assets for his personal gain, deposit thecompany's payments, and bill its customers. The plaintiff further alleged that Dayirresponsibly ran up the company's debt, intentionally concealed its dire financialsituation, and denied her access to its records and facilities. The complaint included anallegation that Weight Steel "closed" on or about August 23, 2010.
[*2] Thereafter, the defendants moved pursuant to CPLR3211 (a) (5) and (7) to dismiss the complaint. Among other things, they argued that thecomplaint was time-barred because it did not allege any errors, acts, or omissions thatoccurred after August 23, 2010, the date that Weight Steel allegedly closed. In addition,the defendants argued that all of the causes of action other than that alleging accountingmalpractice should be dismissed as duplicative of the accounting malpractice cause ofaction. The Supreme Court granted the defendants' motion to dismiss the complaint,concluding that the causes of action alleging accounting malpractice and breach offiduciary duty were time-barred, and further concluding, in effect, that the remainingcauses of action should be dismissed for failure to state a cause of action. The plaintiffappeals, and we modify.
In moving to dismiss a cause of action pursuant to CPLR 3211 (a) (5) as barred bythe applicable statute of limitations, a defendant bears the initial burden ofdemonstrating, prima facie, that the time in which to sue has expired (see Jalayer v Stigliano, 94AD3d 702, 703 [2012]; Fleetwood Agency, Inc. v Verde Elec. Corp., 85 AD3d850, 850 [2011]). Contrary to the Supreme Court's determination, the defendantsfailed to make a prima facie showing that the causes of action alleging accountingmalpractice and breach of fiduciary duty were time-barred. A claim sounding inaccounting malpractice is governed by a three-year statute of limitations (seeCPLR 214 [6]), and, under the circumstances of this case, the plaintiff's claim of breachof fiduciary duty is also governed by a three-year statute of limitations since, inter alia,the remedy sought is purely monetary in nature and it cannot be said that an allegation offraud is essential to that claim (see IDT Corp. v Morgan Stanley Dean Witter & Co., 12NY3d 132, 139 [2009]; Loeuis v Grushin, 126 AD3d 761, 764 [2015]; McDonnell v Bradley, 109AD3d 592, 594 [2013]; cf.Matter of R.M. Kliment & Frances Halsband, Architects [McKinsey & Co.,Inc.], 3 NY3d 538, 541-542 [2004]; RGH Liquidating Trust v Deloitte & Touche LLP, 47AD3d 516, 517 [2008]). Contrary to the court's determination, the defendants failedto establish that these causes of action accrued on August 23, 2010, when Weight Steelallegedly "closed." It is undisputed that Day did not resign as trustee of Weight Steeluntil February 10, 2011. Further, the defendants did not establish when they delivered tothe plaintiff all the pertinent documents related to their accounting work and Day'sadditional duties as trustee. Based upon the defendants' submissions, including thecomplaint and the agreement outlining the terms of the trusteeship, the earliest possibleaccrual date with respect to the claims of accounting malpractice and breach of fiduciaryduty was February 10, 2011, exactly three years prior to the commencement of this action(see IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d at 139;McCoy v Feinman, 99 NY2d 295, 301 [2002]; Ackerman v PriceWaterhouse, 84 NY2d 535, 541 [1994]). Thus, the defendants failed to meet theirinitial burden of demonstrating that those causes of action were time-barred.Accordingly, the court should have denied that branch of the defendants' motion whichwas pursuant to CPLR 3211 (a) (5) to dismiss those causes of action. Moreover, contraryto the defendants' contention, dismissal of the cause of action alleging breach of fiduciaryduty is not warranted on the ground that it is duplicative of the cause of action allegingaccounting malpractice (cf.Staffenberg v Fairfield Pagma Assoc., L.P., 95 AD3d 873, 874 [2012]).
However, the Supreme Court properly directed the dismissal of the causes of actionalleging breach of contract, breach of the covenant of good faith and fair dealing, andfraud on the ground that those causes of action were duplicative of the causes of actionalleging accounting malpractice and breach of fiduciary duty, and thus, failed to state anindependent cause of action (see CPLR 3211 [a] [7]; Genovese v State Farm Mut. Auto.Ins. Co., 106 AD3d 866, 867 [2013]; Carl v Cohen, 55 AD3d 478, 478-479 [2008]; White ofLake George v Bell, 251 AD2d 777, 778 [1998]; McKernin v Fanny FarmerCandy Shops, 176 AD2d 233, 234 [1991]; cf. Matter of R.M. Kliment &Frances Halsband, Architects [McKinsey & Co., Inc.], 3 NY3d at 541-542;RGH Liquidating Trust v Deloitte & Touche LLP, 47 AD3d at 517).Mastro, J.P., Austin, Maltese and Barros, JJ., concur.