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Member Achievement and Case News: Featured

APL SOL: Appreciable and Actual Harm

Sunday, February 18, 2018   (0 Comments)
Posted by: Tom Jensen
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Clients sought accountant advice on how to structure sale of the farm operation to maximize proceeds and minimize taxes. Clients sold the farm on January 9, 2012, relying upon the accountants' projections and advice. On January 18 clients raised concern about the amount of the cash proceeds. Clients alleged in a March 21 meeting accountant acknowledged the projections were wrong and that rather than having $400,000 in cash proceeds, clients would owe an additional $300,000 to $400,000 in taxes. Suit was filed March 10, 2014. At summary judgment accountant contended clients were aware on January 18 of potential loss; clients countered they simply asked for a meeting then and did not know of the inaccurate tax projections. SJ for the accountant was affirmed in N. Robert Nielsen, Inc. v. Moore Grider & Co., 2018 WL 316968 (Cal. App. Jan. 8, 2018). The court recognized the California rule that the statute of limitations begins to run when the client suffers appreciable and actual harm from the malpractice, however uncertain in amount, that consists of more than nominal damages. "Thus, the cause of action may accrue before the client sustains all, or even the greater part of, the damages caused by the professional negligence." The court found unequivocal evidence that clients discovered they had suffered appreciable and actual harm, although uncertain in amount, as of January 18, 2012.  Thus the claim was barred by the two-year SOL.        

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