Court Opinion

ID: 4108858
Source: CourtListenerOpinion
Date Created: 2016-12-20 13:10:28.375702+00
Date Added: 2024-06-11T14:50:10.634370
License: Public Domain

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.

                                  Opinion of the Court

      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.

                                           -2-
                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                  Opinion of the Court

      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

                                         -3-
                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                  Opinion of the Court

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:

                                         -4-
                      HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                  Opinion of the Court

                    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

                                         -5-
                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                   Opinion of the Court

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

                                          -6-
                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                  Opinion of the Court

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

                                         -7-
                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                   Opinion of the Court

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

                                          -8-
                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                   Opinion of the Court

             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,

                                          -9-
                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                  Opinion of the Court

             [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.

                                         - 10 -
                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                  Opinion of the Court

      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

                                         - 11 -
                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                  Opinion of the Court

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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                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                   Opinion of the Court

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.

                                          - 13 -
                         HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                     Opinion of the Court

                               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).

                                            - 14 -
                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                     Opinion of the Court

      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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                        HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                    Opinion of the Court

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 fact-

finder 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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                        HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                   Opinion of the Court

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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                      HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                  Opinion of the Court

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 pre-

existing duty to disclose existed. She has failed to advance all of the elements of a

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                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

                                   Opinion of the Court

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.

                                          - 19 -
 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

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).

                                             2
                      HEAD V. GOULD KILLIAN CPA GRP., P.A.

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

      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

                                            3
                        HEAD V. GOULD KILLIAN CPA GRP., P.A.

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

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

                                             4
                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

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

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.

                                             5
                         HEAD V. GOULD KILLIAN CPA GRP., P.A.

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

      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

                                              6
                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

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

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

                                            7
                         HEAD V. GOULD KILLIAN CPA GRP., P.A.

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

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

                                              8
                       HEAD V. GOULD KILLIAN CPA GRP., P.A.

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

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.

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