Ernst & Young v. Matsumoto (In re United Insurance Management, Inc.)

Ernst & Young appeals a district court order remanding the bankruptcy court’s summary judgment with instructions to determine whether the doctrine of equitable tolling preserves the claims of chapter 7 debtor United Insurance Management, Inc. despite expiration of the Bankruptcy Code’s statute of limitations. Because the doctrine of equitable tolling is inapplicable as a matter of law on undisputed facts in the record, we reverse the district court and reinstate the bankruptcy court’s summary judgment.

I.

In 1981, Robert J. Keller purchased United Insurance Management, Inc. (“UIMI”) from Paul I. Brown. Arthur Young & Company (“AY”), the predecessor-in-interest to Ernst & Young (“EY”), performed an acquisition review for the sale and provided UIMI with audit services for the next three years. In 1984, UIMI filed a chapter 7 bankruptcy petition and the bankruptcy court appointed Robert K. Matsumoto (“trustee”) as UIMI’s trustee.

In 1986, Brown filed suit against AY in Hawaii state court for alleged misrepresentations and breaches of professional duty to UIMI. In 1991, the state court granted AY’s motion for summary judgment, holding that the state statute of limitations barred…