IN THE COURT OF APPEALS OF NORTH CAROLINA

No. COA16-525

Filed: 20 December 2016

Buncombe County, No. 13 CVS 4413

KAREN HEAD, Plaintiff,

v.

GOULD KILLIAN CPA GROUP, P.A., G. EDWARD TOWSON, II, CPA, Defendants.

Appeal by plaintiff from order entered 31 December 2015 by Judge William H. 

Coward in Buncombe County Superior Court. Heard in the Court of Appeals 17 

October 2016.

Erwin, Bishop, Capitano & Moss, PA, by J. Daniel Bishop and Matthew M. 

Holtgrewe, for plaintiff-appellant.

Sharpless & Stavola, P.A., by Brenda S. McClearn, for defendants-appellees.

TYSON, Judge.

Karen Head (“Plaintiff”) appeals from the trial court’s order granting Gould 

Killian CPA Group, P.A.’s and G. Edward Towson, II, CPA’s (“Towson”) (collectively 

“Defendants”) motion for partial summary judgment and amended motion for partial 

summary judgment We affirm in part, reverse in part, and remand for trial on 

Plaintiff’s professional negligence claim. 

I. Factual Background
HEAD V. GOULD KILLIAN CPA GRP., P.A.

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Plaintiff hired Defendants to prepare her tax returns for the 2005 tax year and 

subsequently employed them to prepare her taxes for tax years 2006, 2007, 2008 and 

2009 respectively. Upon Defendants’ completion of the preparation of Plaintiff’s 2005 

returns, Plaintiff came to Defendants’ office, met with Towson, reviewed and signed 

her returns, tendered a check in the amount of taxes she owed, and requested that 

Towson mail her taxes to the Internal Revenue Service (“IRS”) and several state tax 

agencies for her. Towson agreed to do so as a courtesy to Plaintiff, and deposited her 

completed returns in the mail.

For each of the ensuing four tax years, 2006 through 2009, Defendants were 

engaged to prepare Plaintiff’s tax returns. However, these returns were not timely 

filed, as neither Defendants nor Plaintiff submitted them to or filed them with the 

IRS as required by the applicable deadlines.

On 4 November 2013, Plaintiff filed a complaint and alleged causes of action 

against Defendants for professional negligence and fraudulent concealment. Plaintiff 

also asserted a claim for punitive damages in connection with her fraudulent 

concealment claim. Plaintiff’s complaint asserted Defendants had willfully and 

wantonly deceived Plaintiff by concealing from her the fact that they had failed to 

ensure her tax returns for tax years 2006 through 2009 were timely filed. As a result, 

she incurred tax penalties and interest.
HEAD V. GOULD KILLIAN CPA GRP., P.A.

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Defendants filed a motion to dismiss and motion for attorneys’ fees pursuant 

to Rules 9(b) and 12(b)(6) of the North Carolina Rules of Civil Procedure. On 14 July

2014, the trial court entered an order denying this motion. 

On 23 November 2015, Defendants filed a motion for partial summary 

judgment, and filed an amended motion for partial summary judgment on 9 

December 2015. Defendants’ amended motion sought summary judgment on

Plaintiff’s claims for professional negligence regarding her 2006 and 2007 tax returns, 

as well as her fraudulent concealment and punitive damages claims. Defendants did 

not move for summary judgment on Plaintiff’s professional malpractice claims

relating to her 2008 and 2009 tax returns.

In support of their motion for partial summary judgment, Defendants 

submitted the following for consideration by the trial court: (1) a brief in support of 

their motion; (2) Plaintiff’s complaint; (3) a document entitled “2006 Individual 

Income Tax Cover Sheet” along with an accompanying document entitled “Filing 

Instructions Individual Income Tax Return Taxable Year Ended December 31, 2006” 

provided to Plaintiff explaining the steps she needed to take in order to submit her 

prepared tax returns to the IRS; (4) a document entitled “2007 Individual Income Tax 

Cover Sheet” along with an accompanying document entitled “Filing Instructions 

Individual Income Tax Return Taxable Year Ended December 31, 2007” similar in all 

material respects to the 2006 cover sheet provided to Plaintiff for her 2007 prepared 
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Opinion of the Court

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tax returns; (5) a deposition of Plaintiff; (6) IRS documents detailing Plaintiff’s 

penalties and interest incurred in connection with her returns; (7) excerpts from a 

deposition of Defendants’ expert, Michael Gillis, explaining Defendants’ tax 

preparation procedures; and (8) a tolling agreement executed in 2013. Defendants 

additionally submitted various cases and statutes in support of their position.

Plaintiff, in response, submitted: (1) a brief in support of her position; (2) a 

series of emails between Towson, Plaintiff, and her assistant; (3) various 

correspondence and documents from the IRS; (4) Defendants’ responses to 

interrogatories; (5) the deposition of Edward Towson affirmatively stating that 

Plaintiff’s prepared tax returns and accompanying instructions had been provided to 

her along with instructions on how to file them and the importance of doing so in a 

timely fashion; and (6) the log of IRS Revenue Officer Rosa Shade indicating she had 

never had certain discussions with Towson concerning Plaintiff’s taxes despite his 

assertion to the contrary. Plaintiff additionally submitted various cases and statutes 

in support of her position.

The “2006 Individual Income Tax Cover Sheet” and accompanying “Filing 

Instructions Individual Income Tax Return Taxable Year Ended December 31, 2006” 

document submitted to the trial court stated, in pertinent part, the following:

Sign and date the return on Page 2. Initial and date the 

copy, and retain it for your records.

Mail the Form 1040 return by October 15, 2007 to:
HEAD V. GOULD KILLIAN CPA GRP., P.A.

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Internal Revenue Service

Atlanta, GA 39901-0002

Your required federal estimated tax payments are shown 

below. . . . Make each check payable to the United States 

Treasury, write your social security number and “2007 

Form 1040-ES” on the check.

. . . .

Mail the Form 1040-ES payment voucher and check by the 

due date indicated above to

Internal Revenue Service

P.O. Box 105225

Atlanta, GA 30348-5225

At the bottom of the cover sheet after “How Delivered:” the following was 

written: “By Hand to Karen.” The corresponding 2007 cover sheet and instructions, 

in turn, also similarly state: “How Delivered: Mailed to K. Head . . . Picked up on 

12/12/08.”

On 31 December 2015, the trial court entered an order granting Defendants’ 

motions. Plaintiff filed notice of appeal on 19 January 2016. 

II. Issues

Plaintiff argues the trial court erred in granting Defendants’ motion for 

summary judgment and amended motion for partial summary judgment. She asserts

genuine issues of material fact exist concerning her professional negligence and 

fraudulent concealment claims regarding her tax returns. We agree with Plaintiff 
HEAD V. GOULD KILLIAN CPA GRP., P.A.

Opinion of the Court

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that a genuine issue of material fact exists as to her professional negligence claim,

and disagree with Plaintiff that the trial court erred in granting Defendants’ partial 

summary judgment motion concerning her fraudulent concealment and punitive 

damages claims. 

III. Appellate Jurisdiction

Initially, we address whether this Court possesses jurisdiction over the present 

appeal. It is undisputed the present appeal is interlocutory. See Mecklenburg Cnty. 

v. Simply Fashion Stores, Ltd., 208 N.C. App. 664, 667, 704 S.E.2d 48, 51 (2010) 

(citations omitted) (“An order is interlocutory when it does not dispose of the entire 

case but instead, leaves outstanding issues for further action at the trial level.”). 

Generally, there is no right of immediate appeal from an interlocutory order. Goldston 

v. Am. Motors Corp., 326 N.C. 723, 725, 392 S.E.2d 735, 736 (1990). 

An interlocutory order may be appealed, however, if the 

order implicates a substantial right of the appellant that 

would be lost if the order was not reviewed prior to the 

issuance of a final judgment. It is the appealing party’s 

burden to establish that a substantial right would be 

jeopardized unless an immediate appeal is allowed.

Radcliffe v. Avenel Homeowners Ass’n, Inc., __ N.C. App. __, __, 789 S.E.2d 893, 901 

(2016) (internal citations, quotation marks, and footnote omitted).

It is well settled that a substantial right is affected “‘where a possibility of 

inconsistent verdicts exists if the case proceeds to trial.’” Heritage Operating, L.P. v. 

N.C. Propane Exch., LLC, 219 N.C. App. 623, 627, 727 S.E.2d 311, 314 (2012) (quoting 
HEAD V. GOULD KILLIAN CPA GRP., P.A.

Opinion of the Court

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Country Club of Johnston Cnty., Inc. v. U.S. Fidelity & Guar. Co., 135 N.C. App. 159, 

167, 519 S.E.2d 540, 546 (1999), disc. review denied, 351 N.C. 352, 542 S.E.2d 207 

(2000)).

To demonstrate that a second trial will affect a substantial 

right, [the appellant] must show not only that one claim 

has been finally determined and others remain which have 

not yet been determined, but that (1) the same factual 

issues would be present in both trials and (2) the possibility 

of inconsistent verdicts on those issues exists.

Id. at 627-28, 727 S.E.2d at 314-15 (citation, internal quotation marks, and brackets

omitted). 

“‘[S]o long as a claim has been finally determined, delaying the appeal of that 

final determination will ordinarily affect a substantial right if there are overlapping 

factual issues between the claim determined and any claims which have not yet been 

determined.’” Carcano v. JBSS, LLC, 200 N.C. App. 162, 168, 684 S.E.2d 41, 47 (2009) 

(quoting Davidson v. Knauff Ins. Agency, 93 N.C. App. 20, 26, 376 S.E.2d 488, 492, 

disc. review denied, 324 N.C. 577, 381 S.E.2d 772 (1989)). “Issues are the ‘same’ if 

the facts relevant to their resolution overlap in such a way as to create a risk that 

separate litigation of those issues might result in inconsistent verdicts.” Hamilton v. 

Mortg. Info. Servs., Inc., 212 N.C. App. 73, 79, 711 S.E.2d 185, 190 (2011) (citing 

Davidson, 93 N.C. App. at 25, 376 S.E.2d at 491). 

The present appeal presents overlapping factual issues concerning Plaintiff’s 

business relationship with Defendants, which speak directly not only to her claims 
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ruled upon by the trial court, but also her remaining professional negligence claims 

concerning her 2008 and 2009 returns. With the potential for inconsistent verdicts 

based upon a common factual nexus, we hold Plaintiff’s appeal of the trial court’s 

order affects a substantial right and is properly before us.

IV. Standard of Review

Entry of summary judgment is proper if the pleadings, depositions, answers to 

interrogatories, and admissions on file, together with the affidavits, if any, show no 

genuine issue exists concerning any material fact and that any party is entitled to 

judgment as a matter of law. N.C. Gen. Stat. § 1A-1, Rule 56(c). “When considering 

a motion for summary judgment, the [court] must view the presented evidence in a 

light most favorable to the nonmoving party.” Dalton v. Camp, 353 N.C. 647, 651, 548 

S.E.2d 704, 707 (2001) (citation omitted). 

The party moving for summary judgment ultimately has 

the burden of establishing the lack of any triable issue of 

fact.

A defendant may show entitlement to summary judgment 

by (1) proving that an essential element of the plaintiff's 

case is non-existent, or (2) showing through discovery that 

the plaintiff cannot produce evidence to support an 

essential element of his or her claim, or (3) showing that 

the plaintiff cannot surmount an affirmative defense. 

Summary judgment is not appropriate where matters of 

credibility and determining the weight of the evidence 

exist.

Once the party seeking summary judgment makes the 

required showing, the burden shifts to the nonmoving 
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party to produce a forecast of evidence demonstrating 

specific facts, as opposed to allegations, showing that he 

can at least establish a prima facie case at trial.

We review an order allowing summary judgment de novo. 

If the granting of summary judgment can be sustained on 

any grounds, it should be affirmed on appeal.

Wilkins v. Safran, 185 N.C. App. 668, 672, 649 S.E.2d 658, 661 (2007) (internal 

citations and quotations omitted).

“Summary judgment is a drastic measure and it should be used with caution, 

especially in a negligence case in which a jury ordinarily applies the reasonable 

person standard to the facts of each case.” Harrison v. City of Sanford, 177 N.C. App. 

116, 121, 627 S.E.2d 672, 676 (2006) (citation omitted).

V. Statute of Repose

Plaintiff argues the trial court erred in granting summary judgment in favor 

of Defendants regarding professional negligence claims relating to her 2006 and 2007 

tax returns. The trial court based its determination on finding Plaintiff’s professional 

negligence claim is barred by N.C. Gen. Stat. § 1-15(c), the applicable statute of 

repose. 

“[I]n no event shall an action be commenced more than four years from the last 

act of the defendant giving rise to the cause of action[.]” N.C. Gen. Stat. § 1-15(c) 

(2015). 

Furthermore, 
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Opinion of the Court

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[u]nlike the statute of limitations, the statute of repose

serves as an unyielding and absolute barrier that prevents 

a plaintiff’s right of action even before his cause of action 

may accrue, which is generally recognized as the point in 

time when the elements necessary for a legal wrong 

coalesce.

In order to decide whether the statute of repose bars 

plaintiffs’ claim we must determine when the last act of 

alleged negligence took place. To determine when the last 

act or omission occurred we look to factors such as the 

contractual relationship between the parties, when the 

contracted-for services were complete, and when the 

alleged mistakes could no longer be remedied.

Carle v. Wyrick, Robbins, Yates & Ponton, LLP, 225 N.C. App. 656, 661, 738 S.E.2d 

766, 770-71 (2013) (internal citations, quotation marks, and footnote omitted).

In arguing Plaintiff’s professional negligence claim is barred by the statute of 

repose, Defendants assert, as undisputed fact, the final act taken by Defendants in 

regards to Plaintiff’s 2006 and 2007 tax returns occurred on 12 December 2008, when 

Defendants purportedly hand delivered Plaintiff her prepared 2007 returns. We 

disagree. 

Defendants characterize the evidence, regarding if and when Plaintiff received

her tax returns from Defendants, as unrebutted fact. However, when viewed in the 

light most favorable to Plaintiff, as the non-moving party, the 2006 and 2007 Income 

Tax Cover Sheets and internal tracking presented by Defendants as evidence that 

Defendants provided and delivered to Plaintiff her tax returns on the dates signified 

in those documents is challenged and rebutted by Plaintiff’s deposition testimony.
HEAD V. GOULD KILLIAN CPA GRP., P.A.

Opinion of the Court

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Reading Plaintiff’s testimony from her deposition in the light most favorable 

to her as the non-moving party, she was unsure about even being present in 

Defendants’ office in 2007 and 2008, when the returns were purportedly hand 

delivered, but she emphatically denies receiving either prepared returns or written 

instructions. This evidence directly contradicts Defendants’ testimonial and 

documentary evidence purporting Defendants hand delivered and Plaintiff received 

in Defendants’ office her 2006 returns on 8 October 2007 and 2007 returns on 12 

December 2008. 

Viewing the Defendants’ evidence as conclusive fact Defendant delivered and 

Plaintiff physically received her returns is error and does not view all the record 

evidence, and every reasonable inference therefrom, in the light most favorable to 

Plaintiff as the non-moving party. Dalton, 353 N.C. at 651, 548 S.E.2d at 707.

Genuine issues of material fact exist of whether Defendants were responsible 

for filing, mailing, or providing Plaintiff with her completed returns, and whether, if 

and when, Defendants did, in fact, provide Plaintiff with her returns. Defendants 

contend that the preparation of the returns were the Defendants’ last acts pertaining 

to Plaintiff’s 2006 and 2007 returns to accrue the statute of repose. However, 

Defendants’ assertions are rebutted by the testimony of an expert witness, Michael 

Gillis, on the standard of care, which shows the delivery of the completed returns to 
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Opinion of the Court

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the client, not completion of preparation, marks the conclusion of a tax preparation 

engagement:

Q. So by your testimony, then, for each year, the 

engagement of Gould Killian ended when they delivered a 

prepared return to Karen Head?

A. Delivered, mailed, she picked up, whatever process it 

was in which she received her returns, then it’s her 

responsibility to sign and file at that point. (emphasis 

supplied).

Generally, the start of the running of the statute of repose for professional 

negligence occurs when a prospective defendant has completed the transaction he 

was hired to complete, which concludes his professional obligation to his client. See 

Carle, 225 N.C. App. at 665, 738 S.E. 2d at 772-73 (holding that defendants’ obligation 

to plaintiffs was complete and statute of repose began to run when defendants 

structured the completed transaction of stock into employee stock ownership plan); 

Hargett v. Holland, 337 N.C. 651, 654, 447 S.E.2d 784, 787 (1994) (holding that last 

act of defendants triggering the running of the statute of repose was the preparation, 

delivery and supervised execution of a will); Babb v. Hoskins, 223 N.C. App. 103, 108, 

733 S.E.2d 881, 885 (2012) (holding that the last act of defendants triggering the 

running of the statute of repose was the preparation, delivery, and execution of trust 

documents). 

In this case, Plaintiff alleges a disputed issue of fact exists of whether the tax 

returns were to be delivered to her or filed by Defendants. See Wilkins, 185 N.C. App. 
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at 672, 649 S.E.2d at 661. The facts are in dispute whether Defendants were 

responsible for delivering or filing Plaintiff’s tax returns and whether they did, in 

fact, deliver or file Plaintiff’s completed tax returns. The resolution of this disputed 

fact is the basis to determine when the last act by Defendants occurred to trigger and 

commence the running of the statute of repose.

If the parties’ understanding was that Defendants were responsible for 

delivering, filing, or mailing Plaintiff’s 2006 and 2007 returns, and Defendants failed 

to do so as alleged by Plaintiff, then the last act of Defendants for statute of repose 

purposes would be their failure to provide Plaintiff with her returns at the times 

immediately prior to the deadlines for which refunds could be claimed by Plaintiff on 

those returns. Those points in time would be when “the alleged mistakes could no 

longer be remedied.” Carle, 225 N.C. App. at 661, 738 S.E. 2d at 771. The statute of 

repose would not have commenced to run until those points in time for each return 

had passed. See id. 

Genuine issues of material fact exist of whether Defendants were responsible 

for delivering, mailing, or providing Plaintiff with her tax returns, and whether and 

when they did so. These are classic issues of fact reserved for the jury to resolve. The 

trial court’s conclusions that the statute of repose applies as a matter of law to affirm 

summary judgment under these facts is error, when the dates and facts constituting 

Defendants’ last acts or omissions are in dispute.
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VI. Professional Negligence

Due to the trial court’s determination that Plaintiff’s professional negligence 

claim is barred by the applicable statute of repose, it declined to address whether 

Plaintiff has sufficiently alleged and pled the elements of professional negligence to 

defeat Defendants’ motion for summary judgment. Our de novo review shows 

Plaintiff has alleged and shown genuine issues of fact exist, which overcomes 

Defendants’ motion for summary judgment on Plaintiff’s professional negligence 

claim.

“In order to establish a claim of professional negligence, a plaintiff must show: 

‘(1) the nature of the defendant’s profession; (2) the defendant’s duty to conform to a 

certain standard of conduct; and (3) a breach of the duty proximately caused injury 

to the plaintiffs.’” Michael v. Huffman Oil Co., 190 N.C. App. 256, 271, 661 S.E.2d 1, 

11 (2008) (emphasis omitted) (quoting Associated Indus. Contr’rs, Inc. v. Fleming 

Eng’g, Inc., 162 N.C. App. 405, 413, 590 S.E.2d 866, 872 (2004)).

“It is generally recognized that an accountant may be held liable for damages 

naturally and proximately resulting from his failure to use that degree of knowledge, 

skill and judgment usually possessed by members of the profession in a particular 

locality.” Snipes v. Jackson, 69 N.C. App. 64, 73, 316 S.E.2d 657, 662, disc. rev. denied,

312 N.C. 85, 321 S.E.2d 899 (1984) (citation omitted). 
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Viewed in the light most favorable to Plaintiff, as the non-moving party, the 

evidence tends to show genuine issues of material fact exist regarding Defendants’ 

alleged professional negligence which precludes summary judgment. Wilkins, 185 

N.C. App. at 672, 649 S.E.2d at 661. Defendant, Edward Towson, agrees in his 

testimony that he and his co-Defendant firm owe a duty of care to Plaintiff. 

The fact is undisputed that Defendants did timely submit, mail, and file 

Plaintiff’s 2005 tax returns at her request. Even though the record shows Plaintiff 

did not ask Defendants to mail her 2006 and 2007 tax returns, a genuine issue of fact 

is raised by Plaintiff’s testimony about her understanding regarding whether 

Defendants would file or mail her tax returns for 2006 and 2007 based on their prior 

willingness to mail her returns in 2005. 

Whether Defendants should have made it clearer, and did make it clear to 

Plaintiff that they allegedly did not intend to file or mail her tax returns in those 

years is a factual dispute. Having filed her returns the previous year, it would be 

reasonable for Plaintiff to presume and expect Defendants would do the same in 

succeeding years, particularly where federal and multiple state returns were required 

to be prepared, signed, and filed.

Taking Plaintiff’s allegations and testimony as true, together with the 

undisputed fact that Plaintiff’s 2005 tax returns were timely filed and her 2006 and 

2007 returns were not filed when due, a genuine issue of material fact exists for the 
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Opinion of the Court

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jury to determine whether Defendants breached their duty of care by not timely filing 

or by physically providing Plaintiff with her completed tax returns. 

On the matter of injury incurred, the record shows Plaintiff’s 2006 and 2007 

returns were not filed within three years of their original due date, which cost her 

the ability to claim a refund or tax credit for overpayment. I.R.C. § 6511(b)(2)(A) 

(2010). Plaintiff’s 2006 return reflected an overpayment of $60,019 to be applied to 

the 2007 return. Based upon I.R.C. § 6511(b)(2)(A), Plaintiff could have claimed the 

overpayment credit, if the 2006 return had been timely filed by October 15, 2007. 

Viewing the evidence in the light most favorable to Plaintiff, a reasonable factfinder could determine Defendants negligently failed to file, deliver, or provide 

Plaintiff with her completed tax returns for her to timely file, and their failure 

resulted in Plaintiff’s inability to claim a tax refund or credit. 

VII. Fraudulent Concealment

Plaintiff next contends the trial court erred by granting summary judgment in 

Defendants’ favor as to her claim for fraudulent concealment. We disagree.

Fraudulent concealment is generally asserted as a claim 

for damages. It is a form of fraudulent misrepresentation 

entitling the claimant to damages or rescission of [a] 

contract. To assert a claim for fraudulent concealment, 

there must be a showing that the opposing party knew a

material fact, and failed to fully disclose that fact in 

violation of a pre-existing duty to disclose.
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Friedland v. Gales, 131 N.C. App. 802, 807, 509 S.E.2d 793, 797 (1998) (internal 

citations and quotation marks omitted).

Plaintiff cites to portions of her deposition testimony, as well as a series of 

emails including emails between her, Towson, and her assistant, and the log of Rosa 

Shade, beginning on or around 28 March 2012. She asserts this evidence supports 

her position that a genuine issue of material fact exists concerning her fraudulent 

concealment claim. Significantly, however, these emails were exchanged after

Plaintiff had already terminated her employment of Defendants on 27 September 

2011. 

A cause of action for fraud is based on an affirmative 

misrepresentation of a material fact, or a failure to disclose 

a material fact relating to a transaction which the parties 

had a duty to disclose. . . . 

A duty to disclose arises in three situations. The first 

instance is where a fiduciary relationship exists between 

the parties to the transaction. . . .

. . . .

The two remaining situations in which a duty to disclose 

exists arise outside a fiduciary relationship, when the 

parties are negotiating at arm’s length. The first of these is 

when a party has taken affirmative steps to conceal 

material facts from the other. . . .

A duty to disclose in arm’s length negotiations also arises 

where one party has knowledge of a latent defect in the 

subject matter of the negotiations about which the other 

party is both ignorant and unable to discover through 

reasonable diligence.
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Harton v. Harton, 81 N.C. App. 295, 297-98, 344 S.E.2d 117, 119 (1986) (internal 

citations omitted).

“We have found no case stating that the relationship between accountant and 

client is per se fiduciary in nature.” Harrold v. Dowd, 149 N.C. App. 777, 784, 561 

S.E.2d 914, 919 (2002); see also CommScope Credit Union v. Butler & Burke, LLP, __

N.C. __, __, 790 S.E.2d 657, 660-61 (2016) (holding that there is no per se fiduciary 

relationship between an independent auditor and its audit client). “For a breach of 

fiduciary duty to exist, there must first be a fiduciary relationship between the 

parties.” Dalton v. Camp, 353 N.C. at 651, 548 S.E.2d at 707 (citations omitted).

Consequently, Defendants owed no per se fiduciary duty to Plaintiff at the time 

the emails were sent because Defendants had already been terminated by Plaintiff 

and replaced by another accountant. Furthermore, Defendants and Plaintiff were in 

no way “negotiating at arm’s length” about “the subject matter of [a] negotiation” at 

the time the emails were sent. Harton, 81 N.C. App. at 298, 344 S.E.2d at 119. 

No relationship, fiduciary or otherwise, existed between the parties at that

point in time, as Plaintiff had already terminated her relationship with Defendants, 

hired a new CPA, and was not attempting to hire or pay Defendants for any new work 

engagement.

We hold that Plaintiff has failed to proffer evidence demonstrating that a preexisting duty to disclose existed. She has failed to advance all of the elements of a 
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fraudulent concealment claim and to rebut Defendants’ evidence in support of their 

motions for summary judgment and partial summary judgment. Plaintiff’s 

arguments on this issue are overruled.

Because the trial court properly granted summary judgment in Defendants’ 

favor on Plaintiff’s fraudulent concealment claim, we also affirm its grant of summary 

judgment in Defendants’ favor on Plaintiff’s claim for punitive damages. See Watson 

v. Dixon, 352 N.C. 343, 348, 532 S.E.2d 175, 178 (2000) (citations omitted) (“As a rule 

you cannot have a cause of action for punitive damages by itself. If the complainant 

fails to plead or prove his cause of action, then he is not allowed an award of punitive 

damages because he must establish his cause of action as a prerequisite for a punitive 

damage award.”).

VIII. Conclusion

The trial court’s order granting partial summary judgment to Defendants on 

Plaintiff’s fraudulent concealment claim and punitive damages claim is affirmed. The 

trial court’s order granting Defendant partial summary judgment on the Plaintiff’s 

professional negligence claim is reversed. We remand for trial on Plaintiff’s 

professional negligence claim. It is so ordered.

AFFIRMED IN PART, REVERSED IN PART, and REMANDED.

Chief Judge McGEE concurs.

Judge ENOCHS concurs in part and dissents in a separate opinion.
No. COA16-525 – Head v. Gould Killian CPA Grp., P.A.

ENOCHS, Judge, concurring in part and dissenting in part.

Although I agree with my colleagues that the trial court properly granted 

Defendants’ motion for partial summary judgment on Plaintiff’s fraudulent 

concealment claim, I respectfully dissent from the majority’s position that the trial 

court erroneously granted partial summary judgment on Plaintiff’s professional 

negligence claims concerning her 2006 and 2007 tax returns. Because I believe that 

Plaintiff’s professional negligence claims were properly barred by the applicable 

statute of repose, I would affirm the trial court’s grant of partial summary judgement 

on these claims as well.

Plaintiff contends that the trial court erred in granting summary judgement 

in favor of Defendants as to her professional negligence claims relating to her 2006 

and 2007 tax returns. “In order to establish a claim of professional negligence, a

plaintiff must show: ‘(1) the nature of the defendant’s profession; (2) the defendant’s

duty to conform to a certain standard of conduct; and (3) a breach of the duty

proximately caused injury to the plaintiffs.’ ” Michael v. Huffman Oil Co., 190 N.C. 

App. 256, 271, 661 S.E.2d 1, 11 (2008) (emphasis omitted) (quoting Associated Indus. 

Contr’rs, Inc. v. Fleming Eng’g, Inc., 162 N.C. App. 405, 413, 590 S.E.2d 866, 872 

(2004)).

However, in the present case, the issue of whether Plaintiff successfully 

established the elements of a professional negligence claim need not be reached as 

her professional negligence claims relating to her 2006 and 2007 tax returns are 
HEAD V. GOULD KILLIAN CPA GRP., P.A.

ENOCHS, J., concurring in part and dissenting in part

2

barred by the applicable statute of repose. N.C. Gen. Stat. § 1-15(c) (2015) states, in 

pertinent part, that “in no event shall an action be commenced more than four years 

from the last act of the defendant giving rise to the cause of action[.]” 

It is well established that

statutes of repose are intended to mitigate the risk of 

inherently uncertain and potentially limitless legal 

exposure. Accordingly, such a statute’s limitation period is 

initiated by the defendant’s last act or omission that at 

some later point gives rise to the plaintiff’s cause of action. 

The time of the occurrence or discovery of the plaintiff’s 

injury is not a factor in the operation of a statute of repose.

Christie v. Hartley Constr., Inc., 367 N.C. 534, 539, 766 S.E.2d 283, 287 (2014) 

(internal citations and quotation marks omitted) (emphasis added).

Moreover, 

[u]nlike the statute of limitations, the statute of repose

serves as an unyielding and absolute barrier that prevents 

a plaintiff’s right of action even before his cause of action 

may accrue, which is generally recognized as the point in 

time when the elements necessary for a legal wrong 

coalesce.

In order to decide whether the statute of repose bars 

plaintiffs’ claim we must determine when the last act of 

alleged negligence took place. To determine when the last 

act or omission occurred we look to factors such as the 

contractual relationship between the parties, when the 

contracted-for services were complete, and when the 

alleged mistakes could no longer be remedied.

Carle v. Wyrick, Robbins, Yates & Ponton, LLP, 225 N.C. App. 656, 661, 738 S.E.2d 

766, 770-71 (2013) (internal citations, quotation marks, and footnote omitted).
HEAD V. GOULD KILLIAN CPA GRP., P.A.

ENOCHS, J., concurring in part and dissenting in part

3

Here, the unrebutted evidence reveals that the final act taken by Defendants 

in regard to Plaintiff’s 2006 and 2007 tax returns occurred on 12 December 2008, 

when Defendants hand delivered Plaintiff her 2007 prepared returns. Plaintiff filed 

her complaint asserting professional negligence relating to the preparation of her 

2006 and 2007 tax returns on 4 November 2013 — nearly 11 months after the 

limitations period imposed by N.C. Gen. Stat. § 1-15(c) had expired as to the 2007 

returns, and well after the limitations period relating to her 2006 returns had run. 

It is important to note that Defendants’ preparation of Plaintiff’s returns for 

each tax year were separate and distinct transactions for the purposes of the statute 

of repose. Indeed, this is evidenced by Michael Gillis’ unrebutted deposition 

testimony:

Q. So by your testimony, then, for each year, the 

engagement of Gould Killian ended when they delivered a 

prepared return to Karen Head?

A. Delivered, mailed, she picked up, whatever 

process it was in which she received her returns, then it’s 

her responsibility to sign and file at that point.

Moreover, the treatment of Plaintiff’s professional negligence claims by the parties 

and the trial court below indicate that each prepared return was considered to be a 

separate and distinct transaction. This is made even more apparent by the fact that 

Plaintiff’s professional negligence claims for tax years 2008 and 2009 — which were 

brought within the four-year window for statute of repose purposes — were allowed 
HEAD V. GOULD KILLIAN CPA GRP., P.A.

ENOCHS, J., concurring in part and dissenting in part

4

by the trial court to advance to trial. Consequently, preparation of each of the tax 

returns for tax years 2006, 2007, 2008, and 2009 constitute four separate completed 

transactions for which the four-year statute of repose began to run at the time they 

were delivered — or were erroneously not delivered due to an omission by Defendants 

— to Plaintiff. 

Plaintiff nevertheless contends on appeal, however, that Defendants’ final act 

was not the delivery of the 2006 and 2007 tax returns to her — or Defendants’ 

omission in delivering them to her — but rather was the failure on the part of 

Defendants to later cure any failure to file the returns by subsequently alerting 

Plaintiff that she needed to file them before the assessment of interest and penalties 

by the IRS. Significantly though, “[t]he issue, however, is not whether defendants 

continued to represent plaintiffs after the transaction . . . . The issue is when the last 

act alleged to have caused plaintiffs harm occurred.” Carle, 225 N.C. App. at 664, 738 

S.E.2d at 772. 

This Court addressed a similar situation in Carle, where we analyzed what 

constituted a completed transaction triggering the start of the running of the statute 

of repose. In that case, the plaintiffs brought a professional negligence action against 

the law firm and attorney who created an employee stock ownership trust for them 

in 2004. Id. at 656-57, 738 S.E.2d at 768. The transaction was supposed to be 

structured so that the plaintiffs would be able to monetize their corporate stock while 
HEAD V. GOULD KILLIAN CPA GRP., P.A.

ENOCHS, J., concurring in part and dissenting in part

5

avoiding the capital gains taxes normally associated with doing so. Id. at 657, 738 

S.E.2d at 768. However, the defendants improperly structured the trust and the 

plaintiffs were later assessed with tax deficiencies by the IRS on the basis that the 

plaintiffs did, in fact, owe capital gains taxes. Id. at 657-58, 738 S.E.2d at 768.

Significantly, as in the present case, the defendants in Carle continued to work 

with the plaintiffs towards resolving issues with the transaction after its completion:

In August 2005, after the deal had closed, concerns 

were raised regarding the transaction . . . which defendants 

then investigated at plaintiffs’ request. Defendants later 

helped prepare for plaintiffs’ 2007 IRS inquiry relating to 

the tax implications of this transaction. Thus, it is clear 

that although they considered these matter[s] separate and 

billed plaintiffs for each matter[] separately, defendants 

continued to represent plaintiffs well after 10 June 2005 

and to assist plaintiffs with matters arising from the 

transaction, even without any subsequent engagement 

letter.

Id. at 663-64, 738 S.E.2d at 772.

The plaintiffs filed suit for, among other claims, professional negligence on 25 

January 2010. Id. at 658, 738 S.E.2d at 769. The defendants moved for summary 

judgment asserting the statute of repose. Id. The trial court granted the defendants’ 

motion and the plaintiffs appealed arguing that the statute of repose did not apply as 

“their cause of action did not accrue until the IRS proceedings were completed on or 

about 26 May 2010.” Id. at 659, 738 S.E.2d at 769.
HEAD V. GOULD KILLIAN CPA GRP., P.A.

ENOCHS, J., concurring in part and dissenting in part

6

On appeal, this Court affirmed the trial court’s grant of summary judgment, 

holding that 

[c]onsidering the evidence in the light most 

favorable to plaintiffs, the last act giving rise to plaintiffs’ 

claim took place on 10 June 2005 because at that point 

defendants’ role in the transaction was complete and 

nothing could have been done to remedy the alleged 

omissions. Plaintiffs commenced this action on 25 January 

2010, more than four years after the last act of defendants 

giving rise to plaintiff’s cause of action. Even if plaintiffs 

are correct that their action did not accrue until the IRS 

issued its final assessment, the action would still be barred 

by the statute of repose. If the action is not brought within 

the specified period, the plaintiff literally has no cause of 

action. Therefore, defendants are entitled to judgment as 

a matter of law and we affirm the trial court’s order 

granting defendants’ motion for summary judgment. 

Id. at 665, 738 S.E.2d at 772-73 (internal citations and quotation marks omitted); see 

also Hargett v. Holland, 337 N.C. 651, 656, 447 S.E.2d 784, 788 (1994) (holding 

plaintiffs’ professional negligence claim barred by statute of repose where plaintiffs’ 

claim brought more than four years after defendant drafted will and “plaintiffs’ 

complaint allege[d] a contractual relationship between defendant and testator to 

draft a will and that defendant supervise[] execution of the will. After defendant 

completed these acts, he had performed his professional obligations; and his 

professional duty to testator was at an end”); Babb v. Hoskins, 223 N.C. App. 103, 

108, 733 S.E.2d 881, 885 (2012) (“Because the ‘nature of the services he agreed to 

perform’ was solely limited to the drafting of three [trust] documents, we conclude 
HEAD V. GOULD KILLIAN CPA GRP., P.A.

ENOCHS, J., concurring in part and dissenting in part

7

that [the defendant-attorney’s] professional duty to [the plaintiffs] ended upon 

completion of the Trust restatement on 9 October 2006, and, consistent with the 

above authority, [the defendant-attorney] owed no continuing fiduciary duty beyond 

that date[.] . . . Therefore, plaintiffs’ claim for breach of fiduciary duty by [the 

defendant-attorney] for actions before 31 May 2007 was properly dismissed pursuant 

to N.C.G.S. § 1A-1, Rule 12(b)(6) because those actions are beyond the four year 

statute of repose provision contained in N.C.G.S. § 1-15(c).” (internal citation 

omitted)). 

Therefore, whether Defendants delivered Plaintiff her 2006 and 2007 tax 

returns to file — as their evidence tends to show — or whether Defendants never

delivered Plaintiff’s 2006 and 2007 tax returns to her after their preparation through 

an omission on their part — as Plaintiff claims — the statute of repose would have 

begun to run in either scenario on 12 December 2008 as to her 2007 returns and well 

before that for her 2006 returns at the time these individual transactions were 

deemed completed. It is immaterial that Towson later purported to help Plaintiff to 

resolve issues surrounding her 2006 and 2007 tax returns in light of Carle, as those 

transactions, based on the unrebutted evidence, were already deemed to be 

completed. 

Furthermore, even assuming arguendo as Plaintiff’s evidence tends to show 

that Defendants had affirmatively agreed and represented to Plaintiff that they 
HEAD V. GOULD KILLIAN CPA GRP., P.A.

ENOCHS, J., concurring in part and dissenting in part

8

would file her 2006 and 2007 tax returns for her on her behalf and had failed to do 

so, this would, at the most, amount to an omission by Defendants occurring — at the 

latest — on 12 December 2008 given that a statute of repose’s “limitation period is 

initiated by the defendant’s last act or omission that at some later point gives rise to 

the plaintiff’s cause of action.” Christie, 367 N.C. at 539, 766 S.E.2d at 287 (internal 

quotation marks omitted) (emphasis added). Therefore, Plaintiff’s claims would be 

barred on statute of repose grounds on this basis as well even when taking her 

evidence as true.

In sum, either Defendants (1) properly delivered Plaintiff’s 2006 and 2007 tax 

returns to her; or (2) omitted to do so despite their obligation to do so. Either way the 

“statute’s limitation period is initiated by the defendant’s last act or omission that at 

some later point gives rise to the plaintiff’s cause of action. The time of the occurrence 

or discovery of the plaintiff’s injury is not a factor in the operation of a statute of repose” 

Id. (internal citations and quotation marks omitted) (emphasis added), and “[u]nlike 

the statute of limitations, the statute of repose serves as an unyielding and absolute 

barrier that prevents a plaintiff’s right of action even before his cause of action may 

accrue[.]” Carle, 225 N.C. App. at 661, 738 S.E.2d at 770 (citation and quotation 

marks omitted) (emphasis added).

As a result, for all of the above reasons, I would affirm the trial court’s grant 

of partial summary judgment on Plaintiff’s professional negligence claims concerning 
HEAD V. GOULD KILLIAN CPA GRP., P.A.

ENOCHS, J., concurring in part and dissenting in part

9

her 2006 and 2007 tax returns based upon the applicable statute of repose. I therefore 

respectfully dissent from the majority’s opinion on this issue.