Head v. Gould Killian Cpa Grp., P.A.
2016 N.C. App. LEXIS 1306
| N.C. Ct. App. | 2016Background
- Karen Head hired Gould Killian CPA Group and CPA G. Edward Towson to prepare her individual tax returns for 2005–2009; Defendants timely filed 2005 returns but the 2006–2009 returns were not timely filed.
- Head alleges Defendants failed to file or furnish completed 2006 and 2007 returns, causing loss of refunds/credits and IRS penalties/interest; she sued for professional negligence, fraudulent concealment, and sought punitive damages.
- Defendants moved for partial summary judgment as to negligence for 2006–2007 and on fraudulent concealment and punitive damages; they produced cover sheets, filing instructions, expert testimony, and IRS documents; Head produced deposition testimony and emails disputing delivery/filing and asserting different understandings.
- The trial court granted Defendants’ motions; Head appealed. The appeal was interlocutory but held to affect a substantial right due to overlapping factual issues with remaining 2008–2009 negligence claims.
- The Court of Appeals reversed summary judgment on the professional negligence claim for 2006–2007 (finding genuine factual disputes about whether Defendants’ last act occurred when returns were prepared vs. when they were delivered/mailed), but affirmed summary judgment for Defendants on fraudulent concealment and punitive damages.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether statute of repose bars negligence claims for 2006–2007 | Head: last act was Defendants’ failure to deliver/file before deadlines, so claim is within four years | Defendants: last act was delivery (Dec. 12, 2008), so suit filed too late under § 1‑15(c) | Reversed: genuine fact questions exist about when last act occurred (delivery vs. failure to deliver) so statute of repose not resolved on SJ |
| Whether elements of professional negligence are met | Head: duty and breach established by prior year filing practice and testimony; damages from lost refunds/credits | Defendants: no triable negligence on undisputed facts | Reversed in part: material facts exist for jury on duty, breach, proximate injury |
| Whether fraudulent concealment claim survives summary judgment | Head: emails and deposition show concealment and failure to disclose | Defendants: no preexisting duty to disclose (no fiduciary relationship after termination); emails post‑termination | Affirmed: no preexisting duty shown; summary judgment proper |
| Whether punitive damages may proceed | Head: tied to fraudulent concealment | Defendants: punitive damages depend on underlying fraud claim | Affirmed: punitive damages dismissed because fraud claim fails |
Key Cases Cited
- Carle v. Wyrick, Robbins, Yates & Ponton, 225 N.C. App. 656 (discusses when statute of repose begins for professional services)
- Christie v. Hartley Constr., Inc., 367 N.C. 534 (statute of repose runs from defendant's last act or omission irrespective of injury discovery)
- Hargett v. Holland, 337 N.C. 651 (statute of repose triggered by completion of professional services)
- Dalton v. Camp, 353 N.C. 647 (summary judgment standard and viewing evidence for nonmovant)
- Watson v. Dixon, 352 N.C. 343 (punitive damages require an underlying viable claim)
- Michael v. Huffman Oil Co., 190 N.C. App. 256 (elements of professional negligence)
- Snipes v. Jackson, 69 N.C. App. 64 (accountant duty and standard of care)
- Babb v. Hoskins, 223 N.C. App. 103 (statute of repose and completion of attorney services)
- Harrold v. Dowd, 149 N.C. App. 777 (no per se fiduciary relationship between accountant and client)
- Carcano v. JBSS, LLC, 200 N.C. App. 162 (when interlocutory appeal affects substantial rights due to overlapping factual issues)