478 S.W.3d 440
Mo. Ct. App.2015Background
- Thomases, Kansas residents, sued Grant Thornton LLP in Missouri on four counts: fraudulent and negligent misrepresentation, breach of fiduciary duty, and professional negligence.
- IRS notices of deficiency were issued in Sept. 2006 for tax years 2002–2004, reflecting disallowance of the abusive tax shelter schemes sold by Grant Thornton.
- Tax Court proceedings followed; in Feb. 2009 the Thomases settled those cases, agreeing to pay back taxes, interest, and penalties.
- Damages alleged included fees, penalties, interest, loss of deductions, and professional fees from the tax shelters and related services.
- Missouri borrowing statute § 516.190 bars actions fully originated in another state if barred there, and the Thomases’ claims originated in Kansas in 2006.
- Three tolling agreements (2011–2014) attempted to suspend the statute for claims not yet expired, but each limited tolling to claims not already expired as of the effective dates.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Missouri borrowing statute bars the action. | Thomases originated in Kansas; accrual within Kansas. | Accrual occurred in Kansas; barred by Kansas statute. | Yes; barred under Missouri borrowing statute. |
| When the claims accrued for negligence/fiduciary/negligence and fraud. | Accrued in 2009 when settlement occurred. | Accrued in 2006 when IRS notices issued. | Accrual occurred in 2006 in Kansas, not 2009. |
| Do tolling agreements revive or extend the limitations period? | Tolling extended period toward timely filing. | Tolling only applies to non-expired claims; not retroactive. | No revival; first tolling date after expiration. |
| Are the Missouri five-year general-tort limitations applicable when origin is Kansas? | Five-year Missouri period should apply under § 516.120; tolling preserved claims. | Borrowing statute controls; two-year Kansas limit applies. | Not applicable; borrowing statute barred. |
| Overall disposition on the claims | Claims timely under Missouri law with tolling. | Time-barred under Kansas statute as applied by Missouri borrowing statute. | affirmed dismissal as time-barred. |
Key Cases Cited
- Ferrellgas, Inc. v. Edward A. Smith, P.C., 190 S.W.3d 615 (Mo. App. W.D. 2006) (origin/ accrual and damages ascertainment under borrowing statute)
- Alvarado v. H&R Block, Inc., 24 S.W.3d 236 (Mo. App. W.D. 2000) (accrual of negligence; California-derived limitations under borrowing statute)
- Day v. deVries & Assocs., P.C., 98 S.W.3d 92 (Mo. App. W.D. 2003) (accrual and damages ascertainment standard under Mo. law)
- Brower v. Davidson, Deckert, Schutter & Glassman, P.C., 686 S.W.2d 1 (Mo. App. W.D. 1984) (IRS deficiency notices trigger accrual in negligence cases)
- Schwartz v. Lawson, 797 S.W.2d 828 (Mo. App. W.D. 1990) (fraud accrual upon discovery; fiduciary context affects accrual timing)