Accounting firms throughout the country rely on our successful track record defending firms against professional malpractice claims.
Our team’s background and cases extend to every aspect of an accounting dispute, including working with the local Minnesota Society of Certified Public Accountants on legislative methods to aid accounting firms. U.S. News – Best Lawyers placed our professional malpractice defense services in its Tier One national rankings.
Our professionals defend and advise CPAs and firms of all sizes in courtrooms and offices nationwide on liability claims, government regulations, loss prevention, professional discipline, and business and employment matters.
Managing Accountants’ Unique Legal Challenges
Accountants and accounting firms encounter unique challenges when providing services to their clients. For example, when clients of professionals have financial problems unrelated to the services provided, the professional firms servicing those clients still may find themselves thrust into lawsuits through no fault of their own. Accountants’ clients may even attempt to blame the accountants for the clients' own business failures. Such clients may try to hold accounting liable under a wide variety of theories, increasing the stakes of the lawsuit in a frustrating and dramatic fashion.
Clients trust us to manage their multimillion-dollar accounting law cases because we have been resolving these disputes for more than three decades. Our depth of knowledge often allows us to handle a claim facing an accountant even before a lawsuit is commenced. Early, proactive resolution is one of the valued results we often achieve for clients.
In cases in which a lawsuit is brought, Moss & Barnett lawyers also have experience in presenting compelling and persuasive defenses as well as in minimizing the chances of a claim or lawsuit occurring in the first place.
- Tax advice claim defeated. The owners of a small business chose a risky tax strategy to deal with the gain on the sale of their business. Years after the IRS came calling, the owners sued their CPA firm, claiming the accountants had assured them the tax strategy would succeed. We successfully defended the CPA firm. Bottom line: The costs incurred by the CPA firm were a fraction of the total exposure.
- High-damage lawsuit defeated. A CPA firm was sued when several years of audits it performed did not uncover a massive lapping scheme involving a revolving line of credit from a bank. The accounting firm faced claims for the thefts and massive consequential damages from the audit client, its shareholders, the lender, and the holding company that acquired the lender. We quickly negotiated a resolution with the audit client’s shareholders in return for the audit client dropping its claim. We then won a jury verdict against the bank and sustained a dismissal of the holding company’s claim in a ruling by the state supreme court.
- RICO charges by heiress against CPA dismissed. When the disgruntled heir of a family fortune wanted a “deep pocket” to pay her claim that another heir had stolen from the decedent, she sued the decedent’s CPAs for treble damages and her attorneys' fees under the Racketeer Influenced and Corrupt Organizations Act. We argued that the allegations of fraud and common enterprise lacked credibility, and the federal court dismissed the claim.
- Medicare reimbursement lawsuit dismissed for no payment. After a hospital chain was sold to another operator, several of the sold hospitals were hit with millions of dollars in Medicare cost assessments. The buyer and the seller “tag teamed” a lawsuit in an effort to squeeze the CPA firm of the sold chain into paying the assessments on the grounds that financial statement audits had been inadequately reserved for the risk of subsequent assessment and had failed to properly disclose the risk in footnotes. We used creative discovery to demonstrate that the parties specifically bargained for the risk of a future Medicare assessment in their purchase price, as well as aggressive case management techniques (including an appearance at a mediation and refusing to offer any payment for settlement) and the use of an engagement letter indemnity clause, to force the dismissal of the lawsuit without any payment.
- Complex cross-border tax claim rejected. When a foreign corporation hired a U.S. CPA firm to prepare domestic, federal, and state tax returns, the CPAs never bargained to provide tax consulting on the client’s international operations. After the client was hit with tax in another country, it sued the U.S. accounting firm for failing to advise on ways to avoid the foreign tax. We used vigorous discovery (including detailed requests for the tax advisory records and files of the client’s foreign-based CPA firm) to demonstrate the baseless nature of the claim; the claim was dropped without any payment.
- Established precedent regarding statute of limitations. Client v. CPA, 798 N.W.2d 557 (Minn. Ct. App.). A lawyer now with Moss & Barnett defended an accountant against a claim of tax malpractice. The case established that the statute of limitations for such claims begins when the returns are filed.
- Ponzi auditor exonerated. In re Kelley (Bankr. D. Minn. 2015; File No. 12-0X008). After the collapse of a massive Ponzi scheme, the bankruptcy trustee sued an auditor of one of the special purpose entities used to conduct the fraud alleging the CPA had negligently failed to detect the fraud, causing damages of $116 million. After a two-week trial, the arbitration panel rejected the claim and awarded a total defense victory to the CPA firm.
News & Insights
- Moss & Barnett Congratulates Our Lawyers Selected for Inclusion in “The Best Lawyers in America” for 2020The Best Lawyers in America©, 08.15.2019
- Moss & Barnett Congratulates Its Lawyers Named to Minnesota “Super Lawyers” and “Rising Stars” Lists for 201907.05.2019
- Moss & Barnett Congratulates Its Lawyers Selected for Inclusion in “The Best Lawyers in America©” for 201908.15.2018
- Moss & Barnett Congratulates Its Lawyers Named to Minnesota “Super Lawyers” and “Rising Stars” Lists for 201807.05.2018
- Moss & Barnett Congratulates Its Lawyers Selected for Inclusion in “The Best Lawyers in America©” for 201808.15.2017
- Moss & Barnett Congratulates Its Lawyers Named to Minnesota “Super Lawyers” and “Rising Stars” Lists for 201707.05.2017
- Moss & Barnett Congratulates Its Lawyers Selected for Inclusion in “The Best Lawyers in America©” for 201708.15.2016
- Moss & Barnett Congratulates Its Lawyers Named to Minnesota "Super Lawyers" and "Rising Stars" Lists for 201607.05.2016
- Moss & Barnett Congratulates Its Lawyers Selected for Inclusion in “The Best Lawyers in America©” for 201608.17.2015
- Moss & Barnett Congratulates Its Lawyers Named to Minnesota "Super Lawyers" and "Rising Stars" Lists for 201507.07.2015
- Moss & Barnett is Pleased to Recognize Taylor D. Sztainer, Co-Chair of the 2014 Mid-Minnesota Legal Aid One Hour of Sharing Associates' Campaign03.20.2015
- Moss & Barnett Congratulates Its Lawyers Selected for Inclusion in "The Best Lawyers in America®" for 201508.18.2014
- Firm Counsel 2019 Fall Lunch Meeting, Fredrikson & Byron, 200 South Sixth Street, Suite 4000, Minneapolis, MN 55402, 10.30.2019
- Washington, D.C., 10.17.2019
- Accountants' Liability 2018 Presented by ALI-CLE, Renaissance Washington, DC Downtown Hotel, Washington, D.C., 10.18.2018
- 63rd Annual MNCPA Tax Conference, Minneapolis Convention Center, Minneapolis, MN, 12.01.2017
- 63rd Annual MNCPA Tax Conference, Minneapolis Convention Center, Minneapolis, MN, 11.30.2017
- AICPA 2017 Forensic & Valuation Services Conference, Las Vegas, Nevada, 11.15.2017
- AICPA 2017 Forensic & Valuation Services Conference, Las Vegas, Nevada, 11.14.2017
- American Institute of Certified Public Accountants Major Firms Group Summer Conference, Ritz Carlton, Laguna Beach, CA, 07.20.2017
- 16th Annual MNCPA Business Valuation Conference, Crowne Plaza Minneapolis West, 3131 Campus Drive, Plymouth, MN 55441, 11.02.2016
- Accountants' Risk: Walking the TightropeRisk Management Seminar presented by The Hanover Insurance Group, Oklahoma City, OK, 08.09.2016
- Business & Industry eNews, a bi-monthly publication of the Minnesota Society of Certified Public Accountants*, 08.27.2019
- Footnote, a publication of the Minnesota Society of Certified Public Accountants*, 11.26.2018
- Footnote, a publication of the Minnesota Society of Certified Public Accountants*, 11.01.2018
- Footnote, a publication of The Minnesota Society of Certified Public Accountants*, 12.01.2017
- Footnote, a publication of The Minnesota Society of Certified Public Accountants*, 06.01.2016
- Footnote, a publication of The Minnesota Society of Certified Public Accountants*, 09.01.2015
- The Hennepin Lawyer, 11.01.2013
- Professional Liability Insurance: A Compendium of State Law (Minnesota, North Dakota, and South Dakota sections)Defense Research Institute, 10.01.2012
- American Bar Association, Litigation Section, Professional Services Liability Litigation Committee, 06.01.2012
- Newsletter of the AICPA Private Companies Practice Section, 06.01.2012
- May 2008, 05.01.2008
- May 2008, 05.01.2008
- July 2007, 07.02.2007
- October 2006, 10.02.2006
- St. Paul Pioneer Press, 08.04.2002
- Minnesota Society of Certified Public Accountants, 05.11.1996
- The Practical Accountant, 12.01.1993
Learn More About Our Accountant Law Practice
Conflicts of Interest, Subpoenas, and Other Matters
We routinely represent CPA, law, and other professional firms on questions of managing actual or potential conflicts of interest, responding to subpoenas, acquisition agreements, and other matters.
Web Hosting Services Agreements
We advise Moss & Barnett’s accounting firm clients – many of which have large regional or national client bases – on web hosting service agreements. In one transaction, we advised on the creation of a master services agreement (MSA) that called for construction of a dedicated third-party data center to host and support our client's applications. We structured the MSA to allow the accounting firm’s clients to have exclusive use of the data center infrastructure, with appropriate service-level obligations and payments terms structured to meet our client’s objectives.
Attorney Malpractice Defense
In addition to accountant law cases, Moss & Barnett also defends members of the legal profession:
- Client v. Attorney, 383 Wis.2d 45 (Wis. Ct. App.). Defended attorney sued by client in real estate transaction; established that client suffered no damages.
- Client v. Attorney, 922 F.Supp.2d 800 (D. Minn.). An attorney now with Moss & Barnett defended attorney sued by client on theories of conflicts of interest and other claims.
- Client v. Attorney, 551 F.3d. 802 (8th Cir.). An attorney now with Moss & Barnett defended attorney sued by multiple clients arising out of failed investment.
- Client v. Attorney, 394 F.3d 1062 (8th Cir.). Defended attorney sued on conflict of interest claim following incorporation of a new business.
- Client v. Attorney, 1998 WL 373276 (Minn. Ct. App.). Won defense of legal malpractice claim for alleged negligence in handling underlying trial and probate court.
- Investor v. Law Firm (D. Minn.). Defended major Minnesota law firm on securities fraud and legal malpractice class action brought under fraud on the market theory.