D'Arcy & Assoc. v. K.P.M.G. Peat Marwick

• Decision Date: 16 March 2004
• Docket Number: No. WD 62290.,WD 62290.
• Citation: 129 S.W.3d 25
• Parties: D'ARCY AND ASSOCIATES, INC., Appellant, v. K.P.M.G. PEAT MARWICK, L.L.P., Respondent.
• Court: Missouri Court of Appeals

129 S.W.3d 25

D'ARCY AND ASSOCIATES, INC., Appellant, v. K.P.M.G. PEAT MARWICK, L.L.P., Respondent.

No. WD 62290.

Missouri Court of Appeals, Western District.

March 16, 2004.

Patrick Aylward Kalb, Patrick E. D'Arcy, Kansas City, KS, for appellant.

Winthrop B. Reed, III, St. Louis, for respondent.

PAUL M. SPINDEN, Judge.

D'Arcy and Associates, Inc., appeals the circuit court's two summary judgments granted separately for K.P.M.G. Peat Marwick, L.L.P., on D'Arcy's claims for tortious interference and fraud. Because D'Arcy's tortious interference claims were time-barred, we affirm the circuit court's judgment on those claims. The parties are disputing material factual issues concerning D'Arcy's fraud claims; therefore, we reverse the circuit court's judgment on those claims.

D'Arcy's business was to help other businesses obtain tax benefits. On June 11, 1990, D'Arcy agreed to help Vi-Jon Laboratories, Inc., obtain benefits for tax years 1987 through 1992. Vi-Jon agreed to give D'Arcy 30 percent of any benefits that D'Arcy was able to help it obtain. Because Vi-Jon was a closely-held "S corporation," any benefits that it realized passed through to Vi-Jon's shareholders.

D'Arcy's and Vi-Jon's agreement provided that Vi-Jon was responsible for preparing all federal, state, and local tax returns. Vi-Jon employed K.P.M.G. Peat Marwick to prepare these returns. D'Arcy used the information from these tax returns to determine whether or not Vi-Jon was eligible for tax benefits.

In early October 1990, Brian D'Arcy and a D'Arcy employee met with Dennis Hintz and Thomas Erickson, an accountant with K.P.M.G. Peat Marwick, to discuss Vi-Jon's tax returns for 1988. Because of Vi-Jon's reorganization from a "C corporation" to an "S corporation" in 1988, its 1988 tax periods ended on June 30 and on December 31. Erickson allegedly told D'Arcy that, in preparing amended returns for 1988, K.P.M.G. Peat Marwick would "net out" a gain during one tax period with a loss in the other and that this would reduce its tax liability. K.P.M.G. Peat Marwick apparently did not do this, causing D'Arcy, it contends, to lose $3,729.85 in fees.

D'Arcy's and Vi-Jon's business relationship ended in May 1992, and D'Arcy sued Vi-Jon for breach of contract. The lawsuit, including Vi-Jon's counterclaims, ended with the parties dismissing with prejudice by agreement.

More than six years later, on October 14, 1998, D'Arcy filed this 19-count lawsuit against K.P.M.G. Peat Marwick accusing it of tortious interference and fraud. K.P.M.G. Peat Marwick responded with a motion to dismiss or for summary judgment on those counts averring tortious interference on the ground that they were barred by the statute of limitations. The circuit court granted the motion. Because the summary judgment did not dispose of all the claims and because the circuit court did not deem an immediate appeal on the claims disposed of to be proper, D'Arcy was unable to appeal the summary judgment at that time.

On July 16, 2002, K.P.M.G. Peat Marwick filed a second motion for summary judgment on the remaining counts in which D'Arcy had alleged fraud. K.P.M.G. Peat Marwick asserted that D'Arcy could not establish each element of the offense. The circuit court granted the motion, and D'Arcy filed this appeal.

D'Arcy first argues that the circuit court erred in granting summary judgment on its tortious interference claims because K.P.M.G. Peat Marwick's motion, which it denominated a "motion to dismiss and/or for summary judgment," was deficient and that the circuit court erred in not regarding it solely as a motion to dismiss. D'Arcy notes that the motion had several exhibits attached to it, and none of them were sworn affidavits or authenticated. D'Arcy also asserts that the circuit court erred in considering D'Arcy's petitions, which were attached to the motion, because they were not verified.

D'Arcy's contention is without merit. In rendering its summary judgment for K.P.M.G. Peat Marwick, the circuit court ruled that D'Arcy's claims were barred by the applicable statute of limitations. Even assuming that D'Arcy is correct concerning the deficiencies of K.P.M.G. Peat Marwick's motion and that these deficiencies prohibited the circuit court from considering it as a motion for summary judgment, the motion remained a motion to dismiss. K.P.M.G. Peat Marwick denominated its motion as either a motion to dismiss or a motion for summary judgment. Indeed, D'Arcy treated the motion as a motion to dismiss as evidenced by its telling the circuit court that it was doing so.

A motion to dismiss is an appropriate means for challenging jurisdiction on the ground that the statute of limitations bars a claim so long as the plaintiff's petition clearly establishes on its face and without exception that the statute of limitations has expired. Yahne v. Pettis County Sheriff Department, 73 S.W.3d 717, 719 (Mo.App.2002). D'Arcy's petition averred that, in April 1992, K.P.M.G. Peat Marwick began diverting D'Arcy's work to itself and collecting the fees that D'Arcy would have received but for K.P.M.G. Peat Marwick's tortious interference.

D'Arcy does not dispute that it suffered some damage capable of ascertainment in April 1992,¹ but it asserts that its cause of action did not accrue then because the tort was continuing and, therefore, damages were not fully ascertainable then. D'Arcy argues that its contract with Vi-Jon provided that D'Arcy was entitled to collect a fee for securing tax benefits through the tax period ending on December 31, 1992, and three years beyond for benefits retroactively retrieved within the statutorily allotted time.

Generally, "`a statute of limitation begins to run when the cause of action has accrued to the person asserting it, the accrual being whenever such a breach of duty has occurred, or such a wrong has been sustained, as will give a right then to bring and sustain a suit.'" Davis v. Laclede Gas Company, 603 S.W.2d 554, 555 (Mo. banc 1980) (quoting Allison v. Missouri Power and Light Company, 59 S.W.2d 771, 773 (Mo.App.1933)). Moreover, § 516.100, RSMo 2000, says:

[F]or the purposes of sections 516.100 to 516.370, the cause of action shall not be deemed to accrue when the wrong is done or the technical breach of contract or duty occurs, but when the damage resulting therefrom is sustained and is capable of ascertainment, and, if more than one item of damage, then the last item, so that all resulting damage may be recovered, and full and complete relief obtained.

Damage is capable of ascertainment when it can be discovered or is made known, even if its extent remains unknown. Jordan v. Willens, 937 S.W.2d 291, 294 (Mo.App.1996); M & D Enterprises, Inc. v. Wolff, 923 S.W.2d 389, 394 (Mo.App.1996). That the extent of damages is not known is not significant. Accrual requires only that some damage be sustained and be capable of being ascertained. Klemme v. Best, 941 S.W.2d 493, 497 (Mo. banc 1997). That further damage may occur does not matter. Jordan, 937 S.W.2d at 294. The Supreme Court has explained:

In many actions the extent of damage may be dependent on uncertain future events.... Such uncertainties have never been held to preclude the filing of suit and ... have not delayed the accrual of the plaintiff's claim for purposes of the statute of limitations. The most that is required is that some damages have been sustained, so that the claimants know that they have a claim for some amount.

Dixon v. Shafton, 649 S.W.2d 435, 439 (Mo. banc 1983).

Under this standard, D'Arcy's petition established on its face and without exception that the statute of limitations barred its claims. The limitation for asserting a tortious interference action is five years after the cause's accrual. Section 516.120(4), RSMo 2000. D'Arcy's petitions averred that it first sustained damage capable of being ascertained in April 1992 when, at K.P.M.G. Peat Marwick's instigation, Vi-Jon repudiated its agreement with D'Arcy and stopped paying it fees.²

D'Arcy contends, however, that the tort was continuing and that this saves its claim. The Supreme Court recognized the concept of continuing torts in Davis v. Laclede Gas Company, 603 S.W.2d 554 (Mo. banc 1980). The court suggested, however, that it would not extend the concept much beyond Davis' "peculiar and particular circumstances:" when the wrong continues from day to day, creates a fresh injury from day to day, and is capable of being terminated. Id. at 556.

For the continuing tort exception to apply, the wrong must be continuing or repeating. Damages resulting from one completed, wrongful act, although they may continue to develop, are not adequate. Lato v. Concord Homes, Inc., 659 S.W.2d 593, 595 (Mo.App.1983). "When there is only one wrong which results in continuing damage, ... the cause of action accrues when that wrong is committed and the damage sustained is capable of ascertainment." Arst v. Max Barken, Inc., 655 S.W.2d 845, 847 (Mo.App.1983). "Damage resulting from one wrong that continues and becomes more serious over time does not extend the time within which suit may be brought." Business Men's Assurance Company of America v. Graham, 891 S.W.2d 438, 446 (Mo.App.1994).

D'Arcy did not aver a continuing tort. Its cause of action, tortious interference, emanated from a complete, wrongful act. To establish tortious interference, D'Arcy had to show that K.P.M.G. Peat Marwick unjustifiably induced or caused the breach of Vi-Jon's contract with D'Arcy. Ozark Employment Specialists, Inc. v. Beeman, 80 S.W.3d 882, 893 (Mo.App.2002). Assuming that K.P.M.G. Peat Marwick unjustifiably interfered with D'Arcy's and Vi-Jon's business relationship, its tortious conduct was complete when it induced or caused the breach. The wrong, therefore, was not continuing. The damage or injury that had been inflicted may have continued to develop during successive tax periods, but it did not result from repeating wrongful conduct.

D'Arcy...