                          State of New York
                   Supreme Court, Appellate Division
                       Third Judicial Department
Decided and Entered: January 12, 2017                   522088
________________________________

NEW YORK STATE WORKERS'
   COMPENSATION BOARD, as
   Administrator of the
   Workers' Compensation Law
   and Attendant Regulations
   and as Successor in Interest
   to the OHI Workers'
   Compensation Trust,
                    Respondent-
                    Appellant,
      v                                     MEMORANDUM AND ORDER

FULLER & LaFIURA, CPAs, P.C.,
                    Appellant-
                    Respondent,
      and

CODY MANAGEMENT, INC., Also
   Known as CODY MANAGEMENT
   SERVICES, INC., et al.,
                    Respondents,
                    et al.,
                    Defendants.
________________________________


Calendar Date:   November 14, 2016

Before:   McCarthy, J.P., Garry, Rose, Mulvey and Aarons, JJ.

                             __________


      Bond, Schoeneck & King, PLLC, Buffalo (Bradley A. Hoppe of
counsel), for appellant-respondent.

      Hinman Straub, PC, Albany (Joseph M. Dougherty of counsel),
for respondent-appellant.

      Frye & Carbone, LLC, Utica (Richard A. Frye of counsel),
for Joan Hastings, respondent.
                              -2-                522088

      Lombardi, Walsh, Davenport & Amadeo, PC, Albany (Paul E.
Davenport of counsel), for Donald Persico and others,
respondents.

      Dryer Boyajian, LLP, Albany (John J. Dowd of counsel), for
Joseph Alonzo Jr., respondent.

                           __________


Rose, J.

      Cross appeal from an order of the Supreme Court (Platkin,
J.), entered April 28, 2015 in Albany County, which, among other
things, partially granted certain defendants' motions to dismiss
the amended complaint.

      The OHI Workers' Compensation Trust, a group self-insured
trust, was formed in 1997 to provide mandated workers'
compensation coverage to employees of trust members (see Workers'
Compensation Law § 50 [3-a]; 12 NYCRR 317.2 [i]; 317.3).
Defendant Cody Management, Inc., the trust's group administrator,
contracted with defendant Fuller & LaFiura, CPAs, P.C. for
accounting and auditing services, defendant Milliman, Inc. for
actuarial services and defendant Claims Services, Inc.
(hereinafter CSI) for claims administration and risk management
services. Defendants Robert Ottman, Donald Persico, James Hart,
Joan Hastings, Joseph Alonzo Jr. and Robert Eldredge served as
trustees at various times. In 2011, plaintiff determined that
the trust was insolvent and assumed its administration (see 12
NYCRR 317.20). A later forensic analysis found that the trust
had accumulated a deficit of approximately $8.27 million.

      In 2013, plaintiff commenced this action seeking to recover
the trust's deficit from defendants. The 119-page amended
complaint alleged numerous causes of action, including breach of
contract, breach of the duty of good faith and fair dealing,
breach of fiduciary duty, aiding and abetting a breach of
fiduciary duty, fraud, aiding and abetting fraud, and common-law
indemnification against Fuller and the trustees. In addition,
plaintiff alleged causes of action sounding in unjust enrichment
                              -3-                522088

and professional negligence against Fuller and negligence and
gross negligence against the trustees. When Fuller and five of
the trustees each moved to dismiss the complaint pursuant to CPLR
3211 (a) (5) and (7), Supreme Court partially granted Fuller's
motion dismissing the breach of fiduciary duty and common-law
indemnification claims for failure to state a cause of action.
The court also dismissed the breach of the duty of good faith and
fair dealing claim against Fuller as duplicative of the breach of
contract claim. Although Supreme Court made numerous
determinations as to the applicable statutes of limitations, it
did not dismiss any claims asserted against Fuller on that
ground. Supreme Court also partially granted the trustees'
motions by dismissing the claim that they had breached their duty
of good faith and fair dealing as duplicative of the claim
against them for breach of contract. Fuller appeals, and
plaintiff cross-appeals.

      We find merit in plaintiff's contention that Supreme Court
erred in dismissing the breach of fiduciary duty claim asserted
against Fuller (tenth cause of action). Although the duty owed
by an accountant is generally not fiduciary in nature (see Bitter
v Renzo, 101 AD3d 465, 465 [2012]; Caprer v Nussbaum, 36 AD3d
176, 194 [2006]), a fiduciary relationship exists where the
accountant is "under a duty to act for or to give advice for the
benefit of [the client] upon matters within the scope of the
relation" (EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19
[2005] [internal quotation marks and citation omitted]; see Oddo
Asset Mgt. v Barclays Bank PLC, 19 NY3d 584, 592-593 [2012]).
This inquiry is "necessarily fact-specific" (Marmelstein v
Kehillat New Hempstead: Rav Aron Jofen Community Synagogue, 11
NY3d 15, 21 [2008] [internal quotation marks and citation
omitted]), and the dispositive factor is whether there is
"confidence on one side and resulting superiority and influence
on the other" (New York State Workers' Compensation Bd. v SGRisk,
LLC, 116 AD3d 1148, 1152 [2014] [internal quotation marks and
citations omitted]; see AG Capital Funding Partners, L.P. v State
St. Bank & Trust Co., 11 NY3d 146, 158 [2008]). Plaintiff
alleged that Fuller held itself out to have the requisite skill
and expertise to maintain the trust's financial records, provide
auditing services and – importantly – provide advice to the trust
regarding the trust's financial status. According to plaintiff,
                              -4-                522088

Fuller breached its fiduciary duty by knowingly and consistently
concealing the trust's true financial condition and failing to
properly advise the trust regarding its solvency, causing over $8
million in damages. Accepting these allegations as true and
giving plaintiff the benefit of every favorable inference
(see Chanko v American Broadcasting Cos. Inc., 27 NY3d 46, 52
[2016]), we find that plaintiff's cause of action for breach of
fiduciary duty is sufficiently stated to survive Fuller's motion
to dismiss (see New York State Workers' Compensation Bd. v
SGRisk, LLC, 116 AD3d at 1153).

      We are unpersuaded, however, that Supreme Court erred in
dismissing the common-law indemnification claim against Fuller
(cause of action thirty-nine) arising from plaintiff's status as
successor in interest to the trust. It is well settled that such
a claim "requires a showing that the plaintiff and the defendant
owed a duty to third parties, and that the plaintiff discharged
the duty which, as between the plaintiff and the defendant,
should have been discharged by the defendant" (Murray Bresky
Consultants, Ltd v New York Compensation Manager's Inc., 106 AD3d
1255, 1258 [2013] [internal quotation marks, brackets and
citation omitted]; see Rosado v Proctor & Schwartz, 66 NY2d 21,
24 [1985]; Westbank Contr., Inc. v Rondout Val. Cent. School
Dist., 46 AD3d 1187, 1189 [2007]). However, as we stated in
State of N.Y. Workers' Compensation Bd. v Madden (119 AD3d 1022,
1024 [2014]), plaintiff is only entitled to indemnification as
successor in interest if the trust would have been able to assert
such a claim in its own right. Here, as in Madden, plaintiff has
alleged only that Fuller breached duties that were owed to the
trust and, by extension, to plaintiff. Plaintiff does not allege
that Fuller and the trust had any common duties to third parties
that were discharged by the trust, but should have been
discharged by Fuller (see id. at 1024). Accordingly,
"plaintiff's claim[] against [Fuller] arising from its role as
successor in interest [is] direct, and do[es] not sound in
common-law indemnification" (id.).

      As to plaintiff's alternative indemnification claim
predicated upon its role as the governmental agency charged with
the administration of the Workers' Compensation Law, we similarly
find that the amended complaint fails to allege that Fuller "had
                              -5-                522088

any duty in common with plaintiff's statutory obligation to
maintain the trust's solvency" (id.; see HANYS Servs. v Empire
Blue Cross & Blue Shield, 292 AD2d 61, 66 [2002], lv denied 98
NY2d 612 [2002]). Rather, the complaint alleges only that Fuller
owed duties to the trust to provide professional advice and
services. Further, we cannot agree with plaintiff's argument
that 12 NYCRR 317.8 gives rise to any obligation on the part of
Fuller to maintain the trust's solvency.

      We also reject plaintiff's contention that Supreme Court
erred in dismissing its claims for breach of the duty of good
faith and fair dealing against Fuller and the trustees (sixth and
seventh causes of action). Our review of the complaint confirms
that these claims "arise[] from the same [operative] facts and
seek[] the same damages as the breach of contract claim[s]"
against Fuller and the trustees (NYAHSA Servs., Inc., Self-Ins.
Trust v Recco Home Care Servs., Inc., 141 AD3d 792, 794 [2016]
[internal quotation marks and citation omitted]; see Edem v
Grandbelle Intl., Inc., 118 AD3d 848, 849 [2014]; Netologic, Inc.
v Goldman Sachs Group, Inc., 110 AD3d 433, 433-434 [2013]).

      Turning to the applicable statutes of limitations, we
cannot agree with Fuller's contention that Supreme Court erred in
finding that portion of the breach of contract claim asserted
against it (third cause of action) is based upon allegations of
intentional conduct, and, therefore, that portion is subject to a
six-year statute of limitations. Although Fuller correctly notes
that an action to recover damages for malpractice, other than
medical, dental or podiatric malpractice, must be commenced
within three years, "regardless of whether the underlying theory
is based in contract or tort" (CPLR 214 [6]; see Matter of R.M.
Kliment & Frances Halsband, Architects [McKinsey & Co., Inc.], 3
NY3d 538, 541-542 [2004]), professional malpractice "does not
generally encompass intentional acts" (New York State Workers'
Compensation Bd. v SGRisk, LLC, 116 AD3d at 1151). Here, the
amended complaint contains allegations that Fuller breached its
contract through intentional conduct such as "knowingly and
willfully disregard[ing] and/or participat[ing] in inappropriate
accounting practices . . . and/or manipulat[ing] [the trust's]
annual reports and misrepresent[ing] the true financial condition
of [the trust]." This portion of the breach of contract claim
                               -6-                522088

cannot be said to be the equivalent of a claim for malpractice,
and, accordingly, it is subject to the six-year statute of
limitations generally applicable to breach of contract actions
(see CPLR 213 [2]; New York State Workers' Compensation Bd. v
SGRisk, LLC, 116 AD3d at 1151). Therefore, any intentional
conduct occurring before May 31, 2007 – six years prior to the
commencement of this action on May 31, 2013 – is time-barred.
The remaining part of the breach of contract claim is predicated
upon Fuller's alleged malpractice, and we agree with Supreme
Court that it is subject to a three-year statute of limitations
period (see CPLR 214 [6]). Thus, the remaining part of the
breach of contract cause of action against Fuller for services
provided prior to May 31, 2010 is time-barred (see New York State
Workers' Compensation Bd. v SGRisk, LLC, 116 AD3d at 1151; see
generally Williamson v PricewaterhouseCoopers LLP, 9 NY3d 1, 8
[2007]).1

      Next, Fuller contends that Supreme Court erred in failing
to order the dismissal of the portions of the causes of action
for aiding and abetting a breach of fiduciary duty (fourteenth
cause of action), aiding and abetting fraud (twenty-third cause
of action) and professional negligence (thirty-second cause of
action) that Supreme Court determined were governed by the three-
year statute of limitations period set forth in CPLR 214 (6).2
Starting first with the causes of action for aiding and abetting
a breach of fiduciary duty and aiding and abetting fraud,
plaintiff contends that Supreme Court, in the first instance,
erred in applying a three-year statute of limitations to those


     1
        As we explain below, we agree with Supreme Court that the
applicable limitations periods are not tolled by the doctrines of
continuous representation or equitable estoppel.
     2
        Fuller also raises this argument in regard to the claim
of fraud asserted against it. However, inasmuch as Fuller's
motion to dismiss did not seek dismissal of the fraud claim on
statute of limitations grounds, this argument was waived (see
CPLR 3211 [e]; Dougherty v City of Rye, 63 NY2d 989, 991-992
[1984]; see also New York State Workers' Compensation Bd. v
SGRisk, LLC, 116 AD3d at 1154-1155).
                              -7-                522088

claims. We agree. The cause of action for aiding and abetting a
breach of fiduciary duty is premised upon allegations that
Fuller, among other things, intentionally misrepresented the
trust's true financial condition with the knowledge that this
would aid and abet the breach of fiduciary duties by the
trustees, Cody and CSI. Inasmuch as "the allegations of fraud
perpetrated by [Fuller] are essential to this claim, a six-year
statute of limitations pursuant to CPLR 213 (8) is applicable"
(New York State Workers' Compensation Bd. v SGRisk, LLC, 116 AD3d
at 1154; see D. Penguin Bros. Ltd. v National Black United Fund,
Inc., 137 AD3d 460, 461 [2016]). Similarly, our review of the
aiding and abetting fraud claim confirms that the underlying
facts are also based in fraud, and, thus, the six-year statute of
limitations also applies to this claim (see CPLR 213 [8]; NYAHSA
Servs., Inc., Self-Ins. Trust v Recco Home Care Servs., Inc., 141
AD3d at 798). Accordingly, these causes of action are timely
insofar as they allege conduct occurring after May 31, 2007.

      As for the cause of action asserted against Fuller for
professional negligence, we cannot agree with plaintiff's
argument that the doctrine of continuous representation applies
to toll the applicable three-year statute of limitations until
Fuller delivered its last audited financial statement on May 4,
2011. It is well settled that "'[t]he continuous representation
doctrine tolls the statute of limitations . . . where there is a
mutual understanding of the need for further representation on
the specific subject matter underlying the malpractice claim'"
(Deep v Boies, 121 AD3d 1316, 1318 [2014], lv denied 25 NY3d 903
[2015], quoting McCoy v Feinman, 99 NY2d 295, 306 [2002];
see Giarratano v Silver, 46 AD3d 1053, 1055 [2007]). However,
the existence of a continuing, general, professional relationship
is insufficient to invoke this doctrine. Instead, the doctrine
applies only in the narrow circumstance "where the continuing
representation pertains specifically to the matter in
which . . . the alleged malpractice" occurred (Shumsky v
Eisenstein, 96 NY2d 164, 168 [2001]; accord Deep v Boies, 121
AD3d at 1318; see Chicago Tit. Ins. Co. v Mazula, 47 AD3d 999,
1000 [2008]). Here, we agree with Supreme Court that the
allegations of professional malpractice against Fuller are
exclusively directed at the separate and discrete yearly audited
financial statements that Fuller prepared (see 12 NYCRR 317.19
                              -8-                522088

[a] [2]). In addition, plaintiff has not alleged that it engaged
Fuller to provide corrective or remedial services after Fuller
submitted the financial statements or that plaintiff and Fuller
explicitly contemplated further services regarding completed
financial statements (see Williamson v PricewaterhouseCoopers
LLP, 9 NY3d at 11). Under these circumstance, Supreme Court
properly found that the continuous representation doctrine was
inapplicable (see id. at 10-11; Rodeo Family Enters., LLC v
Matte, 99 AD3d 781, 784 [2012]; Giarratano v Silver, 46 AD3d at
1055). Accordingly, the cause of action for professional
negligence is time-barred to the extent that it alleges actions
occurring prior to May 31, 2010.

      Finally, Supreme Court correctly declined to apply the
doctrine of equitable estoppel to preclude Fuller and the
trustees from asserting statutes of limitations defenses. This
doctrine "is an extraordinary remedy which applies where a party
is prevented from filing an action within the applicable statute
of limitations due to his or her reasonable reliance on
deception, fraud or misrepresentations by the other" (City of
Binghamton v Hawk Eng'g P.C., 85 AD3d 1417, 1420 [2011] [internal
quotation marks and citations omitted], lv denied 17 NY3d 713
[2011]; accord Pulver v Dougherty, 58 AD3d 978, 979-980 [2009]).
"For the doctrine to apply, a plaintiff may not rely on the same
act that forms the basis for the claim – the later fraudulent
misrepresentation must be for the purpose of concealing the
former tort" (Ross v Louise Wise Servs., Inc., 8 NY3d 478, 491
[2007] [citations omitted]; see Corsello v Verizon N.Y., Inc., 18
NY3d 777, 789 [2012]). Here, the amended complaint establishes
that the alleged efforts to conceal the trust's true financial
condition that underlie plaintiff's equitable estoppel argument
are also the basis for its direct claims against Fuller and the
trustees (see Cusimano v Schnurr, 137 AD3d 527, 532 [2016];
Nichols v Curtis, 104 AD3d 526, 528 [2013]). In addition, it is
apparent from the amended complaint that plaintiff was aware as
early as 2007 that the trust was operating at a deficit, but
nevertheless waited until 2013 to commence this action.

      The parties' remaining contentions, to the extent not
specifically addressed herein, have been considered and found to
be without merit.
                              -9-                  522088

     McCarthy, J.P., Garry, Mulvey and Aarons, JJ., concur.



      ORDERED that the order is modified, on the law, without
costs, by reversing so much thereof as (1) granted a motion by
defendant Fuller & LaFiura, CPAs, P.C. to dismiss the tenth cause
of action and (2) held that a three-year statute of limitations
applies to the fourteenth and twenty-third causes of action;
motion denied as to the tenth cause of action, a six-year statute
of limitations applies to the fourteenth and twenty-third causes
of action, and any conduct occurring before May 31, 2007 with
respect to the fourteenth and twenty-third causes of action is
dismissed; and, as so modified, affirmed.




                             ENTER:




                             Robert D. Mayberger
                             Clerk of the Court
