Mukon v. Gollnick
A court can reject an accountant's claim that the scope of his representation was restricted and award damages and costs to a plaintiff who proves the accountant allegedly failed to consider the plaintiff's entire transaction when he provided tax advice. Allegedly, the plaintiff, Mark Mukon, requested tax advice from the defendant accountant, Robert Gollnick, about methods to reduce taxes for Mukon's limited liability company, Sea Pearl Marine LLC, which built and sold boats and owned a boat known as "Obsession." Mukon allegedly followed Gollnick's advice to dissolve the limited liability company, and when the boat "Obsession" transferred to Mukon, as a result of the dissolution, the State of Connecticut assessed use taxes of $16,621. Mukon hired an attorney to negotiate an $11,665 settlement with the State of Connecticut. Mukon sued Gollnick, alleging that he breached the standard of care for certified public accountants. Gollnick objected that Mukon was contributorily negligent and that the scope of Gollnick's representation was restricted to minimizing taxes for the limited liability company and did not extend to the question of use taxes. Mukon's expert witness, Nancy Riella, testified that Gollnick provided "only half or a piece of the advice" required and that other research should have been performed. The court found that the plaintiff proved, by a fair preponderance of the evidence, that Gollnick departed from the standard of care of a skilled accountant of ordinary prudence, and the plaintiff was injured as a result. The court credited expert testimony that if the defendant had considered the entire transaction and performed adequate research, he would have known about the potential use tax consequences. "The defendant's failure to consider potential individual use tax liability to the plaintiff," wrote the court, departed "from the appropriate standard of care." The court rejected Gollnick's special defense that Mukon was contributorily negligent. Mukon proved that he had been Gollnick's client for a decade and that Gollnick provided the plaintiff personal and business tax advice. The court awarded the plaintiff damages in the amount of $12,865, which included $600 for the plaintiff's tax attorney and $600 for the plaintiff's expert accountant.