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Current Developments in the Commercial Divisions of the
New York State Courts
Posted: December 8, 2016

Accounting Malpractice Claim Properly Dismissed for Lack of Privity

On November 30, 2016, the Second Department issued a decision in Weinstein v. CohnReznick, LLP, 2016 NY Slip Op. 08068, affirming the dismissal of an accounting malpractice claim, explaining:

The plaintiffs alleged that Cohn, an accounting firm, assisted nonparties Lawrence Levine and David Levine (hereinafter together the Levines) in wrongfully acquiring the plaintiff Solas Plumbing Corp., a plumbing business. . . .

The Supreme Court properly granted that branch of Cohn’s motion which was to dismiss the cause of action alleging accounting malpractice. Accepting the factual allegations in the complaint as true, and according the plaintiffs the benefit of every favorable inference, the complaint failed to adequately allege the existence of actual privity of contract between the plaintiffs and Cohn, or a relationship so close as to approach that of privity, sufficient to impose a professional duty upon Cohn for the benefit of the plaintiffs. Inasmuch as the complaint failed to adequately allege the existence of a duty owed by Cohn to the plaintiffs, it failed to state a cause of action alleging accounting malpractice.

(Internal quotations and citations omitted).

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