Beane v. Dana S. Beane & Co., P.C.

A trial court's evaluation of a motion to dismiss does not necessarily require an evidentiary hearing. The standard of review in considering a motion to dismiss is whether the plaintiff's allegations are reasonably susceptible of a construction that would permit recovery. This threshold inquiry involves testing the facto alleged in the pleadings against the applicable law. Dismissal is appropriate if the facto pleaded do not constitute a basis for legal relief. The trial court may also consider documents attached to the plaintiff's pleadings or documents the authenticity of which are not disputed by the parties, official public records, or documents sufficiently referred to in the complaint The trial court need not accept allegations in the writ that are merely conclusions of law.

The trial court held a hearing on a motion to dismiss, accepted the truth of plaintiff's allegations, and ruled based upon plaintiff's pleadings. Because the issues before the trial court were limited to legal analysis of the facto asserted by plaintiff, an evidentiary hearing was not required.

Statutes of limitation place a limit on the time in which a plaintiff may bring suit after a cause of action accrues. Although a cause of action arises as soon as all of the necessary elements are present, it does not accrue until the plaintiff discovers, or in the exercise of reasonable diligence should have discovered, both the fact of an injury and the cause thereof.

The statute of limitations constitutes an affirmative defense, and the defendant bears the burden of proving that it applies in a given case. That burden, however, is met by a showing that the action was not brought within three years of the act or omission complained of. Once the defendant has established that the statute of limitations would bar the action, the plaintiff has the burden of raising and proving that the discovery rule is applicable to an action otherwise barred by the statute of limitations. The statutory discovery rule is designed to provide relief in situations where the plaintiff is unaware of either his injury or that the injury was caused by a wrongful act or omission. RSA508:4, I.

The discovery rule is a two-pronged rule requiring both prongs to be satisfied before the statute of limitations begins to run. First, a plaintiff must know or reasonably should have known that it has been injured; and second, a plaintiff must know or reasonably should have known that its injury was proximately caused by conduct of the defendant Thus, the discovery rule exception does not apply unless the plaintiff did not discover, and could not reasonably have discovered, either the alleged injury or its causal connection to the alleged negligent act.

Although the discovery rule tolls the limitations period until a plaintiff discovers, or should reasonably have discovered, the causal connection between the harm and the defendant's negligent or wrongful act, this rule is not intended to toll the statute of limitations until the full extent of the plaintiffs injury has manifested itself. Rather, that the plaintiff could reasonably discern that he suffered some harm caused by the defendant's conduct is sufficient to render the discovery rule inapplicable. Further, a plaintiff need not be certain of this causal connection', the possibility that it existed will suffice to obviate the protections of the discovery rule.

In an accounting malpractice case, the trial court did not err when it found that plaintiffs claim arose no later than April 5, 2005, the date of an Internal Revenue Service (IRS) notice of deficiency. The record supported the trial court's finding that plaintiff knew or in the exercise of reasonable diligence should have discovered the causal relationship between the defendants' negligence and the harm caused him in late 2002 when the IRS increased his tax liability for 1996 and 1999, or when the IRS issued its final report on December 21, 2004, or, at the latest, when he lost his administrative appeal on April 5, 2005. RSA508:4.

The fraudulent concealment rule states that when facts essential to the cause of action are fraudulently concealed, the statute of limitations is tolled until the plaintiff has discovered such facts or could have done so in the exercise of reasonable diligence. Here in an accounting malpractice case, the rule was inapplicable because, as the trial court found, plaintiff knew, or in the exercise of reasonable diligence should have discovered the causal relationship between defendants' negligence and the harm caused at the latest by April 5, 2005, the date of an Internal Revenue Service notice of deficiency.

Even if accountants were in a fiduciary relationship with plaintiff, there was no support in New Hampshire case law for the proposition that a limitations period was tolled in fiduciary cases until the fiduciary disclosed his or her misconduct Moreover, despite defendants' failure to disclose their alleged errors, the record showed that by April 5, 2005, at the latest, plaintiff was on notice of the causal connection between his harm and defendants' conduct.

Under the continuing representation rule, which other jurisdictions have established in the context of legal malpractice actions, a client's cause of action against his attorney does not accrue until the attorney ceases representing the client The rule recognizes that a person seeking professional assistance has a right to repose confidence in the professional's ability and good faith, and realistically cannot be expected to question and assess the techniques employed or the manner in which the services are rendered. The facts in the accounting malpractice case did not warrant the adoption of the rule. Plaintiff engaged two law firms after receiving a deficiency notice to evaluate the deficiency and initiate a tax court proceeding. Thus, "innocent reliance" on defendants' professional services was no longer reasonably warranted.

Recoupment refers to the defendant's right hi the same action, to reduce or eliminate the plaintiffs claim, either because the plaintiff has not complied with some cross-obligation of the contract on which he or she sues or because the plaintiff has violated some legal duty inPage 710the making or performance of that contract. Any claim for recoupment here was not properly before the trial court, as the claim did not involve the same action as the present one.