E-Fab, Inc. v. Accountants, Inc. Services

McADAMS, J.

At issue in this appeal is the accrual date of the plaintiffs causes of action against the defendant for negligence, negligent misrepresentation, and breach of contract. The plaintiff was the victim of embezzlement by an employee, whom the defendant had recruited and placed with the plaintiff. The trial court concluded that the plaintiff should have discovered the embezzlement sooner, and it therefore sustained the defendant's demurrer, brought on statute of limitations grounds. The plaintiff brought this appeal from the ensuing judgment. Applying the delayed discovery rule to the plaintiffs claims of independent wrongdoing by defendant, we conclude that the trial court erred in finding the plaintiffs claims barred as a matter of law. We therefore reverse the judgment.

Only two of the parties to this action are before us on appeal: appellant E-Fab, Inc. (plaintiff) and respondent Accountants, Inc. Services (defendant).

Plaintiff designs and manufactures precision components and tools. Plaintiff has been in business since 1981, employing 15 to 20 individuals at any given time.

In 1996, plaintiff needed "a new bookkeeper to manage its financial affairs including…