Opinion ID: 2455908
Heading Depth: 1
Heading Rank: 2

Heading: When did this cause of action accrue?

Text: We now consider whether or not the plaintiffs' cause of action accrued within one year of the filing of their third-party complaint on November 24, 1976. This Court has had occasion in several recently decided cases to consider various aspects of the problem of determining the date on which a plaintiff's cause of action has accrued sufficiently to start the running of the statute of limitations. See, Teeters v. Currey, Tenn., 518 S.W.2d 512 (1974); McCroskey v. Bryant Air Conditioning Company, Tenn., 524 S.W.2d 487 (1975); Ameraccount Club, Inc. v. Hill, supra ; Foster v. Harris, Tenn., 633 S.W.2d 304 (1982); Hoffman v. Hospital Affiliates, Inc., Tenn., 652 S.W.2d 341 (1983). In Ameraccount the action was one by a client against his attorney for malpractice in which we held that the statute did not begin to run until the injury to the plaintiff occurred, although he knew prior thereto of the attorney's negligence which eventually caused the injury. Obviously, negligence without injury is not actionable; hence, the statute of limitations could not begin to run until the attorney's negligence had resulted in injury to the plaintiff. In the instant case, the injury to the bondholders occurred on October 1, 1974, when the bonds defaulted. There is no merit whatever in the plaintiffs' argument that their injury did not occur until the suit against the guarantors in Texas was concluded. A plaintiff cannot be permitted to wait until he knows all of the injurious effects as consequences of an actionable wrong. Taylor v. Clayton Mobile Homes, Inc., Tenn., 516 S.W.2d 72 (1974). The date of injury to the bondholders being thus established, we must next determine when the bondholders knew, or in the exercise of reasonable care should have known, of the alleged negligence or malpractice on the part of bond counsel and of its causal relation to the injury suffered by the bondholders. The Court of Appeals concluded that the evidence showed that such knowledge was acquired no later than September 30, 1975, the date of Mr. Podrog's letter to all the other bondholders, a portion of which is hereinabove quoted. In that letter he asserts that ... all involved in the promotion and ultimate sale of bonds were at least negligent in permitting false financial statements and apparent forged CPA certificates to be publicized and circulated as true. Earlier, in a letter dated July 21, 1975, Mr. Podrog had written to Mr. Larry Stephenson, President of the Security Bank & Trust Company, Ponca City, Oklahoma, wherein he stated: I want to consult with them (all bondholders) and see if the majority agree with me that we should immediately:       (5) institute civil suit for damages to all bondholders due to negligence, et cetera, against the Town of Grand Junction, its Mayor, its council, Waring, Cox, James, Sklar & Allen, Ewing J. Harris, Hamilton Brothers and Investors Associates of America for failing to verify guarantors' financial statements, et cetera, et cetera. In his letter of September 30, 1975, to all of the other bondholders, Mr. Podrog has recommended: After the total losses to bondholders is determined, civil action for damages should be filed against the Town of Grand Junction, its Mayor, its council, the original underwriters, and all attorneys involved in the promotion and sale of the bonds, to the purchasers due to the carelessness and negligence in permitting fraudulent financial statements to be published and circulated. It is clear, then, that, at least as of September 30, 1975, the bondholders knew that they had sustained an injury and were aware of the existence of their claim for malpractice or negligence against bond counsel in failing to discover the fraudulent nature of the financial statements of the promoters-guarantors which were attached to the offering circular. The bondholders argue that they were not aware of certain evidence of malpractice on the part of the bond counsel until they took Mr. Sklar's deposition in March, 1976. That may be, but, as we pointed out in Hoffman, supra , The `discovery' rule would apply only in cases where the plaintiff does not discover and reasonably could not be expected to discover that he has a right of action. Furthermore, the statute is tolled only during the period when the plaintiff has no knowledge that a wrong has occurred, and, as a reasonable person is not put on inquiry. Hoffman v. Hospital Affiliates, Inc., 652 S.W.2d 341 at 344. Plaintiffs have argued but have not proven that defendant bond counsel concealed plaintiffs' cause of action. Whatever plaintiffs learned upon the taking of Sklar's deposition in March, 1976, could have been learned much earlier if due diligence had been exercised by plaintiffs. We have examined other complaints made by appellants-plaintiffs but find them to be without merit. The judgment of the Court of Appeals is affirmed. Costs incurred in this Court are taxed against appellants-bondholders. COOPER, HARBISON and DROWOTA, JJ., and WALKER, Special Justice, concur.