ISN Software Corporation v. Richards, Layton & Finger, P.A., 226 A.3d 727

ISN sought advice from Richards, Layton & Finger (RLF) in 2012 about converting from a C to an S corporation; four of eight stockholders were ineligible for S status.
RLF advised ISN it could use a cash‑out merger to buy out some non‑qualifying stockholders and that cashed‑out holders could either accept cash or seek appraisal under Delaware law.
RLF’s advice led ISN to cash out three of the four non‑qualifying holders and exclude the largest holder; the merger closed Jan. 9, 2013, with ISN reserving ~$34 million for buyouts.
On Jan. 15, 2013, RLF notified ISN the advice may have been wrong and that all four non‑qualifying holders could demand appraisal; ISN proceeded with the merger and RLF agreed to represent ISN in any appraisal litigation.
Three stockholders filed for appraisal in April 2013; the Court of Chancery (augmented on appeal) later set a per‑share fair value substantially above ISN’s reserve (Ch. Ct. decision Aug. 2016; affirmed Oct. 2017).
ISN sued RLF for legal malpractice Aug. 1, 2018; the Superior Court dismissed the suit as time‑barred, and the Delaware Supreme Court affirmed, holding ISN’s malpractice claim accrued in Jan. 2013.

Issue	Plaintiff's Argument	Defendant's Argument	Held
When did ISN’s legal malpractice claim accrue under 10 Del. C. § 8106?	Accrual did not occur until appraisal litigation produced a valuation exceeding ISN’s reserve (i.e., when damages were ascertainable).	Accrual occurred when ISN was injured by RLF’s wrongful act (when the excluded stockholder obtained appraisal rights / when RLF notified ISN).	Accrual occurred in Jan. 2013 (when RLF put ISN on notice/when the excluded holder obtained appraisal rights); suit filed in 2018 was time‑barred.
Does Delaware’s discovery rule or fraudulent concealment toll the limitations period here?	ISN argued access to RLF’s full file might show concealment or support equitable tolling.	RLF argued it informed ISN of the problem and the conflict‑consent letter warned ISN; no factual basis for concealment.	Tolling not warranted; complaint pleaded RLF informed ISN of the mistake, so no plausible concealment to toll the statute.
Must damages be actual/ascertained before accrual (i.e., is exposure to risk insufficient)?	Accrual should await an actionable injury with ascertainable damages (injury not present until appraisal award exceeded reserve).	Under Delaware occurrence rule, a tort accrues at the time of injury even if damages are uncertain; exposure that caused an uncompensated liability was an injury.	Injury occurred when ISN was exposed to liability for additional shares (Jan. 2013); damages need not be fully known for accrual.

Kaufman v. C.L. McCabe & Sons, Inc., 603 A.2d 831 (Del. 1992) (Delaware treats accrual under § 8106 as an occurrence rule; torts accrue at time of injury).
Wal‑Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312 (Del. 2004) (reaffirming Delaware accrual principles and that discovery is not generally required to start the limitations clock).
Coleman v. PricewaterhouseCoopers, LLC, 854 A.2d 838 (Del. 2004) (discussing discovery‑rule tolling where concealment or fraud is alleged).
Isaacson Stolper & Co. v. Artisans' Sav. Bank, 330 A.2d 130 (Del. 1974) (tolling may apply where the injury is inherently unknowable until a third‑party notice).
ISN Software Corp. v. Ad‑Venture Capital Partners, L.P., 173 A.3d 1047 (Del. 2017) (Delaware Supreme Court affirmed the Court of Chancery’s appraisal valuation in the underlying appraisal litigation).