But there are a few important exceptions to this rule, such as where the plaintiff is an infant, or under a disability. Another important exception to this rule is the continuous representation doctrine, which states, in essence, that the time on the statute of limitations does not start to  run so long as there is “a mutual understanding of the need for further representation on the specific subject matter underlying the malpractice claim” (McCoy v Feinman, 99 NY2d 295, 306; see Zorn v Gilbert, 8 NY3d 933, 934).

In a recent case, New York’s Appellate Division, Second Department held that a Forbes 500 company’s accounting malpractice claims against the firm that had been hired to perform their audits would be allowed to continue even though some of the audits had been performed more than 3 years before the malpractice claims were brought (and therefore appeared to be time-barred). The reason?

Because “[w]hen undertaking the [plaintiff's] audits for the fiscal years 1998 through 2001, [the defendant audit firm] contemplated that its work and representation on each audit year would continue beyond the issuance of the audit opinion” and that “[t]his contemplation is evidenced by [the defendant's] opinions on prior years’ financial statements, income statements and cash flow contained in each audit opinion.” In other words, since the defendant audit firm was still representing the plaintiff company with respect to those prior audits, the statute of limitations did not begin to run.

Clearly, the plaintiff in this case acted wisely by assuring that their underlying agreement with the audit firm reflected the defendant’s ongoing obligation to correct prior audits, and thereby saved their claim from a rapid defeat.

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The answer is relatively straightforward: since we believed that our position was especially strong under New York law, particularly given the language in the parties’ contract which gave sole and exclusive ownership of all intellectual property to the LLC, we simply showed the other side a draft of the papers we intended to file with the Court, and gave them a day to mull it over. In response, the other side’s attorney contacted me, and began open and frank discussions about how we could resolve our clients’ differences.

Consider two alternative scenarios:

Scenario #1: we could have merely threatened suit, but as you probably know, most threats of lawsuits are not taken very seriously, and therefore, I’ve found, usually is just a waste of time.

Scenario #2: : we could have immediately filed suit and sought injunctive relief from the Court, and thereby not only incurred thousands of dollars in Court filing and attorneys’ fees for both sides, but this would have almost certainly poisoned the atmosphere between the parties, and made the resolution of this particular issue far more costly and difficult than necessary.

The moral of the story is obvious: if you have a strong and well-reasoned position, it is definitely worthwhile to spend the time and money to prepare legal papers that reflect this, and to let the other side know it. Everyone knows that’s the heavy lifting, and that it takes virtually no effort to walk (or electronically file) those papers over to the court. Taking this important first step may just save you loads of time, aggravation and money.

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In its initial suit papers, Price Chopper claims that competitor Giant Market would have someone consistently and surreptitiously obtain copies of Price Choppers’ fliers that would announce their special sale items, and then undercut those specific sales items in their own advertisements, thereby depriving Price Choppers’ sales of any measurable impact, and giving Giant Market an unfair competitive advantage.

If true, the details set forth in Price Choppers’ complaint are indeed tantalizing, and if this case were ever to go to trial, would certainly have a great deal of jury appeal. For example, Price Chopper apparently has videotape of someone sneaking into the warehouse where their pre-publication fliers were stored, and then handing them to a Giant Market employee. And it appears that they have videotape of this occurring on several occasions.

One important tidbit to glean from this story is this: trade secret protection is not limited to proprietary technology and formulae; if your product marketing and pricing took time, effort, research and expense to develop, and is not readily available to the general public, it can be applied to that as well.

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As a New York business litigation attorney, I have to recommend that my clients purchase such policies (although by the time they’ve called me about their particular problems with regard to employee theft and/or breach of fiduciary duty, it’s usually too late for that).  That said, I find the article’s underlying assumption that employee theft should somehow be taken as a given is fundamentally flawed both from a moral and business perspective.

Leaving aside how troubling this assumption is on a moral plane (have we, as a society really reached the point where it should surprise us when people have integrity rather than rob us blind the second they are given the chance?),  in my view, these problems, from a business vantage point, can be signficantly reduced, if not eliminated in the following way: once the decision has been made to hire, the employer must commit to diligently and carefully vet candidates who will fit naturally into a professional atmosphere that rewards and incentivises team play and solution-geared problem solving while brooking no tolerance whatsoever for dishonesty or people who “are just looking out for #1″ (i.e., themselves).

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This ruling had particularly serious ramifications for the plaintiff company, IDT Corp., because the shorter time period effectively resulted in the dismissal of their property damage claims.

The moral of the story? If you think your small business has been victimized by a fiduciary, make sure you contact a lawyer promptly; the short-term expenditure on a qualified and experienced lawyer may save you untold heartache – and money – later on.

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