Clark Hill Wins for Accounting Firm in Tax Dispute With Rock Band Member

Penny Deihl, Pam Palmer, Elizabeth Evans, and Lora De La Portilla secured a motion for summary judgment for an accounting firm before the Los Angeles Superior Court on Oct. 31.

The Clark Hill trio convinced the court that the accounting firm was not liable for an employee’s business management and tax preparation services she provided on the side for a member of a rock band.

The musician filed a complaint because the accounting firm’s employee failed to timely file tax returns from 2014-2018. The musician, his wife, and his businesses sued the accounting firm and the employee for over $3 million in penalties and interest and then $2-4 million in emotional distress damages.

“Our client’s employee had been working with the musician as a side job,” Diehl said. “We submitted evidence to the court that Plaintiffs’ names didn’t show up on the firm’s conflict checks, there was no retainer, no payment, and no knowledge by the firm of the relationship.”

All three parties brought motions for summary judgment, but Clark Hill’s argument that the employee’s work with the rock band member was outside the course and scope of her employment proved pivotal.

“Fortunately for our client, we were able to demonstrate that the employee’s work for the Plaintiffs was not foreseeable and outside the scope of her employment resulting in a lack of liability for our client,” Deihl said.