FIRM SECURES SUMMARY JUDGMENT FOR TAX PREPARER

Defeats Negligence, Fraud and Breach of Fiduciary Duty Claims

When a business fails or an employee embezzles funds, plaintiffs often blame the accountants even though the accountant is a co-victim and not a conspirator.  The firm successfully defends accountants wrongly accused of nefarious conduct.

A recent case presented a new twist on this old theme.  Plaintiffs were clients of M. Weldon Moreland, CPA. In 2002, Moreland advised them that if they invested their money with him, he would place it in a special account for their benefit and they would receive a guaranteed 8 percent annual rate of return. In reliance on Moreland’s advice, plaintiffs gave him hundreds of thousands of dollars. The money deposited with Moreland was referred to as the “Moreland Notes.” It turned out that the Moreland Notes were nothing more than a scheme whereby Moreland stole the money.

Our client, another CPA, began working for Moreland and eventually merged her tax preparation practice with Moreland’s. Our client prepared plaintiffs’ tax returns for 2006, 2007, and 2008, when she discovered the Moreland Notes, and ultimately realized the impropriety of them. Even though our client worked diligently to help plaintiffs recoup money lost in tax overpayments, plaintiffs still sued our client alleging she should be responsible for additional damages over and above tax overpayments resulting from the fraudulent investment scheme.

The firm filed a summary judgment motion.  Douglas Robbins argued that plaintiffs failed to show that the additional damages sought, over and above the tax refunds, were the result of a breach of duty by our client.  Mr. Robbins further argued that plaintiffs failed to present evidence supporting a breach of duty.

The trial court agreed granting summary judgment and denying plaintiffs the right to jury trial against our client.  Plaintiffs appealed and Douglas Robbins argued the appeal.  The 1st District agreed 100% with Mr. Robbins’ and the trial court’s analysis.

Moreland ended up pleading no contest to 34 counts of grand theft.