APPEL CORPORATION v. MAHONEY COHEN COMPANY CPA

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Supreme Court, Appellate Division, First Department, New York.

I. APPEL CORPORATION, et al., Plaintiffs-Appellants, v. MAHONEY COHEN & COMPANY, CPA, P.C., etc., et al., Defendants-Respondents.

Decided: May 16, 2002

WILLIAMS, P.J., TOM, MAZZARELLI, ELLERIN and MARLOW, JJ. Steven G. Storch, for Plaintiffs-Appellants. John R. Sachs, Jr., for Defendants-Respondents.

Order, Supreme Court, New York County (Marilyn Shafer, J.), entered March 22, 2001, which, to the extent appealed from as limited by the brief, granted defendants' motion pursuant to CPLR 3211(a)(5), dismissing portions of the first, second, and third causes of action relating to the 1995 financial statement of plaintiff I. Appel Corporation, unanimously affirmed, with costs.

In this action for accounting malpractice, the motion court properly dismissed those portions of the complaint that pertained to the 1995 financial statement of I. Appel Corporation.   The issue of whether plaintiff Feinberg had relied on the 1995 financial statement prepared by defendants was fully litigated in an arbitration proceeding brought by Feinberg, in which the arbitrators found that plaintiff Feinberg had not relied on the 1995 financial statement.   That finding precludes relitigation of the issue (see, Matter of American Insurance Co. v. Messinger, 43 N.Y.2d 184, 401 N.Y.S.2d 36, 371 N.E.2d 798;  Kaufman v. Eli Lilly & Co., 65 N.Y.2d 449, 492 N.Y.S.2d 584, 482 N.E.2d 63).   Furthermore, it would preclude the contrary finding necessary for plaintiff to prevail upon his present malpractice claims relating to the 1995 financial statement-namely, that a departure by defendants from accepted standards of practice in preparing the statement proximately caused plaintiffs' injury-since plaintiff has had an extensive, full and fair opportunity to litigate the reliance issue.