Apple Valley Unified School District v. Vavrinek, Trine, Day & Co.

Apple Valley Unified School District (the District) sued Vavrinek, Trine, Day & Co., LLP (VTD) and Heidi Ross (collectively defendants) for accounting malpractice, claiming defendants’ misrepresentations in an audit report induced the District to provide state funds to a charter school which was not entitled to the funds. The trial court sustained defendants’ demurrer without leave to amend, based on the statute of limitations.

We conclude the statute began to run when the District learned of the improper payments and incurred expenses in an effort to assess and limit its exposure, notwithstanding the fact it had not been determined at that time— and still has not been determined—that the District is legally responsible for reimbursing the state for the funds. Since the District did not file suit until more than two years later, the trial court properly sustained the demurrer.

I

Factual and Procedural Background

A. Parties

The District is a California public school district. VTD is a California accountancy partnership, and Ross is a member of VTD.

B. Charter Schools

The Charter Schools Act of 1992 (the Act) permits public school districts to grant charters for the…