American Western Banker v. Price Waterhouse

This is an appeal after an order of dismissal for failure to serve the summons within two years after commencement of the action. Appellants, American Western Banker (AWB) and guarantors of some of its corporate debt, sued two certified public accounting firms (collectively respondents) for negligence, fraud and related causes of action. In various ways, all causes of action alleged that respondents should have discovered and notified appellants that certain members of top management of AWB were committing misdeeds, including stealing from the company.

The original complaint named only AWB as plaintiff. An amended complaint added the guarantors as plaintiffs and added a few additional allegations. The summons was served on respondents more than two years after the original complaint was filed, but less than two years after the amended complaint was filed. On motion of respondents filed pursuant to Code of Civil Procedure section 583.420, subdivision (a)(1), the court dismissed the action for failure to serve the summons within two years after commencement of the action.

Appellants claim the lower court abused its discretion because they showed good cause for delayed…