Opinion ID: 1281126
Heading Depth: 2
Heading Rank: 1

Heading: Continuous Representation Doctrine Applied to Accountant Negligence.

Text: Bosse argues the continuing representation doctrine is an exception to the statute of limitations for Accountants' malpractice under SDCL 15-2-14.4. Although we have recognized this doctrine in conjunction with medical and legal malpractice, it is a question of first impression in the area of accountant negligence. South Dakota's accountant liability statute, SDCL 15-2-14.4, provides: Any action against a licensed public accountant, his agent or employee, for malpractice, error mistake, or omission, whether based on contract or tort, may be commenced only within four years after the alleged malpractice, error, mistake or omission has occurred. The time limitation to bring a claim under this statute begins on the occurrence of the accountant's negligent act. In the area of medical malpractice, however, this court has carved an exception to the statute of limitations. This exception prevents the statute of limitation's clock from ticking when the alleged harm is the result of a continuing tort. See Wells v. Billars, 391 N.W.2d 668 (S.D.1986); Alberts v. Giebink, 299 N.W.2d 454 (S.D.1980). In Wells, the court tolled the statute of limitations for torts arising out of a physician's continuing treatment until the doctor-patient relationship ended. Id. at 673. The rationale behind this doctrine was to prevent the refusal to seek or administer health care due to pending litigation when treatment may be desperately needed. Id., 391 N.W.2d at 672. The continuing treatment doctrine was extended to legal malpractice in Schoenrock, 419 N.W.2d at 200. Creating an exception to the usual three-year statute of limitation for attorney malpractice actions, Schoenrock followed the Wells decision, holding that continuous representation halts the commencement of the limitations period until the attorney-client relationship ends. Id. (citing R. Mallen and B. Levitt, Legal Malpractice § 391 (1981)). The court limited the doctrine's use to only those cases where there is a clear indicia of an ongoing, continuous, developing and dependent relationship between the client and the attorney[.] Id. (citing Muller v. Struman, 79 A.D.2d 482, 485, 437 N.Y.S.2d 205, 208 (1981); Citibank NA v. Suthers, 68 A.D.2d 790, 418 N.Y.S.2d 679 (1979); Grago v. Robertson, 49 A.D.2d 645, 370 N.Y.S.2d 255 (1975)). As this court explained in Schoenrock, what is protected is not merely continuity of a general professional relationship. Id., 419 N.W.2d at 201 (citations omitted). Instead, it is the cause of action which results from the underlying condition caused by the professional's ongoing negligent behavior. Id. Once the act of malpractice occurs, the doctrine only applies to acts of malpractice arising from the performance of the same or related services. Id. Given these parameters, the Schoenrock court refused to extend the doctrine to the plaintiff because there simply was no continuity in the parties' relationship. Id. The court held the plaintiff's action barred. The next case to address the issue, Kurylas, Inc. v. Bradsky, 452 N.W.2d 111 (S.D.1990), reemphasized the need for an ongoing relationship to trigger the exception. The facts of the case revealed that, soon after attorney Bradsky failed to file a financing statement, he withdrew and arranged for alternative counsel for Kurylas' business affairs. The Kurylas court held that such minor contacts between the attorney and client did not establish a continuing relationship after the negligent act occurred. According to the court, Kurylas did not carry his burden of proof to toll the statute. Since accountants are held to the same standard of professional care as doctors and lawyers, we conclude that the continuous relationship exception applies to the statute of limitations for accountant liability under SDCL 15-2-14.4. See Lien v. McGladrey & Pullen, 509 N.W.2d 421, 423 (S.D.1993).