Articles Posted in Accounting Malpractice

The case is Yung v. Grant Thornton, 2016-SC-00571 and 2017-SC-00151. The plaintiffs sued Grant Thornton for fraud for placing them in a tax shelter. The IRS disallowed the tax shelter and the Yungs were required to pay $20 million in back taxes and penalties. The Yungs sued Grant Thornton for fraud and, in the trial court, obtained a judgment of $20 million in compensatory damages (for the back taxes they had to pay) and, more controversially, $80 million in punitive damages.

Punitive damages awards were once quite common. They have become far less common in recent years after the Supreme Court decided a series of cases requiring that the punitive damage award be proportional to the compensatory damages award.

The Appellate Court reversed the punitive damages award and the Yungs appealed to the Kentucky Supreme Court. In a thoughtful and detailed opinion, The Kentucky Supreme Court reinstated the punitive damage award!

The case is Millman v. Blatt & Dauman, 2018 NY Slip Op 30016(U).  The plaintiff sued his former divorce attorney and his accountant for providing allegedly faulty tax advice that he should file a joint return with his wife. Because the plaintiff alleged that he relied on the advice of the accounting firm, Blatt & Dauman, the Court dismissed the claim against the divorce lawyer. The court reasoned that if the client relied on the advice of the accounting firm, he could not have relied upon the lawyer’s advice. The court held that the claim against the accounting firm stated a claim and declined to dismiss that claim.

http://www.clintonlaw.net