“An allegation of misconduct is not an indispensable part of an accounting request if the complaint indicates a fiduciary relationship between the parties or any other special circumstance warranting adequate release” (citing Morgulas v. Yudell Realty, 161 A.D.2d 211, 213-214 (1 Dep. 1990)). Under normal circumstances, where there is no obvious fiduciary relationship, accounting should not be granted. (city Elghanian v. Elghanian, 277 A.D.2d 162, 162 (1st Dep`t 2000)). However, the right to keep accounts may also include: (i) in the case of a joint venture agreement in a situation where the seller must share both losses and profits; or (ii) where there are special circumstances justifying a fair remedy in the interests of justice. (relying on Grossman v. Laurence Handprints-N.J., 90 A.D.2d 95, 104 (2d Dep`t 1982); see also Kaminsky v. Kahn, 23 A.D.2d 231, 237 (1st Dep. 1965) (accounting may be ordered by the court on the basis of the “true nature and overall effect of the transaction between the parties and taking into account the nature, quality and effect of the defendant`s unlawful acts, infringing the rights of the plaintiff”.)). When drawing up a profit statement, the plaintiff is treated as if he were conducting the defendant`s business and making the profits that were due to illegal acts of the defendant. This can be quite complex in practice, as the defendant`s accounting records (sometimes by a forensic accountant) must be examined to determine how much of his gross profit comes from the illegal act in question.
 Therefore, mathematical accuracy is not required and a reasonable approximation is acceptable.  As forensic accountants, we have the mandate to prepare a statement of profits in the following areas: Co-owners of competing estates are also entitled to profit accounting to properly allocate income from the use or rental of the property. Recourse is also available against strangers in a trust who dishonestly help” an explicit trustee violate the fiduciary duty of the trustee.  Early forensic accounting gives you a simple and effective way to proactively manage the costs and risks associated with litigation. Early involvement will help refine important financial and/or accounting issues in disputes and identify the essential evidence needed to develop and support the optimal legal strategy. This will help you lay the groundwork for building robust and defensible claims. Case law has largely identified two approaches to assessing the size of a profit balance sheet: There is no specific limitation period for an accounting claim. Therefore, the four-year limitation period provided for in the catch-all provision of Article 343 of the Code of Civil Procedure applies. The law begins to run when the plea arises, and the plea arises from the act or transaction giving rise to the right to accounting, or if the plaintiff should have known of the wrongful act or transaction or experienced it in the exercise of due diligence. However, in the case of a fiduciary relationship between the parties, the law does not begin to run as long as the fiduciary relationship exists. There are several legal formulations about when someone is entitled to accounting.
Perhaps the most frequently cited statement is the statement in Palazzo v. Palazzo, 121 A.D.2d 261, 264 (1 December 1986) The use of accounting in a dispute between spouses is subject to a limitation period of three years. The limitation period begins to run if the spouse learns or should have learned, in the exercise of due diligence, of the transaction that the applicant`s spouse considers illegal. However, there is no limitation period for an action brought by one of the spouses against the other in an action for dissolution of marriage or against the estate of the other spouse if the other spouse dies. However, since the request for accounting is of a fair nature, the defendant may invoke the defense of the laches Upon the death of the trustee, however, the rights of the beneficiaries are irrevocable, to the extent provided for in the terms of the trust document, a trustee must report to the beneficiaries each year and as otherwise provided for in various sections of the Succession Act. In addition, other beneficiaries, who are not currently entitled to the trust`s distributions, are generally not entitled to the trustee`s financial statements. “To be entitled to adequate accounting, the applicant must prove that he does not have an adequate remedy before the law.” Over the years, the courts have developed various remedies to allow for the recovery of funds in circumstances where fairness simply requires it. These remedies arise in situations where there is no legal or contractual relationship between the parties that could otherwise give rise to such a claim. Situations like these occur when one person pays money to another person because they mistakenly believe that the funds are legally due. This happens when a bank makes a mistake and credits your account with funds it should pay to someone else, or when it puts an extra zero on the amount of a deposit. In order to deal with such cases and to rely on just principles, the courts developed restitution remedies such as “unjust enrichment” and “the money had been received”. These remedies are what the press often derisively calls “the judge did well”.
An agent owes his client a fiduciary duty. To the extent that the agent comes into possession of money or other property belonging to the principal or received by the agent on behalf of the principal, the agent shall account to the principal for such money or any other benefit. To quantify a profit account, a forensic accountant must have access to the defendant`s financial books and records and other relevant documents. Since a plaintiff cannot be compelled to choose between damages and a statement of profits before being fully informed,[ii] the legal proceedings may be conducted by an unruly defendant who objects to the discovery or does not fully provide all the documents relevant to the calculation. A profit account (sometimes called a statement of profits or simply accounting) is a type of fair remedy most commonly used in the event of a breach of fiduciary duty.  This is a measure taken against a defendant to recover profits made as a result of the breach of the obligation in order to prevent unjust enrichment. The law firm of William J. Tucker is familiar with the principles of contract and tort, including accounting matters, and offers free initial telephone consultations to individuals and businesses dealing with such matters. The defendants argue that fair accounting requires proof that the plaintiff does not have an adequate remedy. The applicant argues that he does not have a legally adequate remedy. Alternatively, he argues that such a demonstration is not necessary. In Koppel v.
Wien Lane & Malkin, 125 A.D.2d 230 (1 pp. 1986), the Appeal Division of that Division concluded that the existence of an appropriate remedy in law does not constitute an obstacle to accounting where there is a fiduciary relationship. In accordance with the Koppel case, this court will not require the plaintiff not to have a reasonable remedy before ordering the accounting. – “unjust enrichment” is available if there has been an enrichment of one party, a corresponding deprivation of the other and there is “a lack of legal basis for enrichment”. This type of situation occurs, for example, when one person pays money to another person or otherwise, accidentally or for confusing reasons. Unless the recipient has substantially changed his legal situation in good faith as a result of receiving this service, the courts will order the refund of the transferred value. A “legal reason” includes things such as a contract, gift or voluntary disposition, legal obligation or legal provision, such as transfer to a roommate in the event of death. Once an applicant has determined that they have a right to accounting, the second step is for the court to “manage” the individual accounts of the partners to ensure that each has received their fair share of the company`s distributions, with the “fair share” referring to the division agreed upon between the partners or required by law.