Commercial Division Blog

Current Developments in the Commercial Divisions of the
New York State Courts by Schlam Stone & Dolan LLP
Posted: October 15, 2018

When Accounting Firm Agreed to Respond to Audit Letter, Continuous Representation Doctrine Preserved Professional Malpractice Claims Relating to Original Return

On October 2, 2018, the First Department issued a decision in Lemle v. Regen, Benz & MacKenzie, C.P.A’s, P.C., 2018 NY Slip Op. 06487, holding that when an accounting firm agreed to respond to an audit letter, the continuous representation doctrine preserved professional malpractice claims related to the audited return, explaining:

Without any new engagement by plaintiff, defendants undertook to respond to DTF’s audit letter, defending or at least explaining the treatment given the properties on the 2012 return. This service is sufficiently related to the specific subject matter of the alleged malpractice — the characterization of the transaction as a sale in 2012 — to support application of the continuous representation doctrine. By contrast, the otherwise broad and continuous range of services that defendants provided to plaintiff over the years that did not concern the specific subject matter of the alleged malpractice is insufficient to support application of the doctrine.

(Internal citations omitted).

We both bring and defend professional malpractice claims and other claims relating to the duties of professionals such as lawyers, accountants and architects to their clients. This decision is about a rule–the continuous representation doctrine–that sometimes can extend the statute of limitations to bring a malpractice claim. Contact us if you have questions regarding whether a legal malpractice claim is timely.

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