Commercial Division Blog
Continuous Representation Doctrine Inapplicable if Limitation Period Set By Contract, Not Statute
On April 20, 2017, the First Department issued a decision in Aaron v. Deloitte Tax LLP, 2017 NY Slip Op. 03051, holding that the continuous representation tolling doctrine did not apply to an accounting malpractice claim where the limitations period applicable to the claim was set by contract, not statute, explaining:
The engagement letter, which stated that it covered a period of seven months, provided that any action brought relating to the engagement must be commenced within one year of the accrual of the cause of action. The accrual of plaintiffs' accounting malpractice claim was on January 21, 2009, the date decedent signed the last document that was part of the estate tax plan formulated by defendant. This action was not commenced until September 2015, and is untimely.
Plaintiffs may not avail themselves of the continuous representation tolling doctrine because the limitations period was contractual, not statutory, and was reasonable. The engagement letter indicated that decedent, a sophisticated and experienced businessman, and defendant, did not necessarily expect the representation to continue after the plan was in place, since the engagement expressly ended approximately seven months after the agreement was signed.
(Internal quotations and citations omitted).