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

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

*1313 BACKGROUND

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

Facts 1

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 accounts…