Falkenberg Ives is proud to report that the Illinois Appellate Court has affirmed the dismissal of a suit against one of its accountant clients in Mitchell v. Stonecasters et al, 2018 IL App (2d) 180127.  The opinion addressed two important aspects of accountants' liability in Illinois: the scope of "accounting activities" for purposes of application of the two-year statute of limitations and the proper accrual date for the statute. 

The suit was a claim for negligence against an accounting firm relating to the performance of a business valuation which the plaintiff claimed failed to properly consider prior sales, resulting in a value that was too low.  After suit had been filed against the business, the plaintiff claimed that during a deposition is when he first learned that the valuation was too low based on the accountant failing to consider information of which he should have been aware.  The plaintiff amended the suit to add the claim against the accountant.

Falkenberg Ives filed a motion to dismiss the complaint under the two-year statute of limitations period governing actions against licensed accountants in Illinois.  The motion was granted.  The plaintiff appealed, arguing that the work in question was an appraisal and should have been governed by the general five-year statute of limitations.  Additionally, the plaintiff argued that even if the two-year statute applied, he did not know of the accountant's negligence until he took the accountant's deposition, and he filed suit within months of the deposition.

On appeal, the court first found that because valuation work is the type of work that can be performed by an accountant, even though it is not specifically included as "accounting activities" under the statute, it is still covered.  Valuations involve financial analysis that when performed by licensed accountants have specific standards in the accounting field with which the accountant must comply.  The fact that persons other than licensed accountants can also perform valuations was not controlling.  Non-accountants can also perform services such as tax preparation.  Having found the two-year statute of limitations for actions against accountants applied, the court next agreed with Falkenberg Ives that the plaintiff knew or should have known of a claim at least as of the time when he sued the business, and therefore when he named the accountant more than two years later it was too late.  The court confirmed that the statute begins to run when a plaintiff discovers he was injured and that it may have been wrongfully caused, not when the plaintiff becomes aware of specific negligent conduct.  The plaintiff had all of the information necessary to start the running of the statute at the time he first filed suit against the business, and when he sued the accountant more than two years later, it was untimely.

A copy of the opinion can be found at: http://illinoiscourts.gov/Opinions/AppellateCourt/2018/2ndDistrict/2180127.pdf.  

For more information about Falkenberg Ives' professional liability practice, contact Tom Falkenberg at (312) 566-4801 or This email address is being protected from spambots. You need JavaScript enabled to view it..  

On May 1, 2018, partner Kirstin Ives will be presenting "Hot Topics in Healthcare Fraud and Best Practices for Partnering With Law Enforcement to Combat Fraud, Waste, and Abuse" at the Blue Cross and Blue Shield Association's 52nd Annual Lawyers' Conference in Orlando, Florida.  The presentation will cover current fraud trends and how payers can work with the government to detect and prevent healthcare fraud.  For more information on the presentation, please contact Kirstin Ives at This email address is being protected from spambots. You need JavaScript enabled to view it. or 312-566-4803.  

Tom Falkenberg will be speaking at CNA Insurance's annual professional liabilty conference on October 11, 2017 in Austin, Texas.  The presentation will cover strategy for use of experts in accounting malpractice cases.  For more information on the presentation, contact Tom Falkenberg at This email address is being protected from spambots. You need JavaScript enabled to view it.

On April 11, 2018, Tom Falkenberg will be speaking at Camico Mutual Insurance Company's Accountant's Liability Forum in Las Vegason SEC and federal grand jury investigations.  For more information on Mr. Falkenberg's presentation, contact him at This email address is being protected from spambots. You need JavaScript enabled to view it..

On October 10, 2017, Kirstin Ives will present to the Chicago Bar Association civil practice committee a presentation on the new federal Mandatory Initial Discovery Pilot program.  The presentation will cover the scope of the program and how it will impact those litigating in the Northern District of Illinois.  For more information on the presentation, contact Kirstin Ives at This email address is being protected from spambots. You need JavaScript enabled to view it..  

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