in the Supreme Court on 5 February 2018.
pursuant to N.C. G.S. § 7A-30(2) from the decision of a
divided panel of the Court of Appeals, __ N.C.App. __, 795
S.E.2d 142 (2016), affirming in part and reversing in part
and remanding an order granting partial summary judgment
entered on 31 December 2015 by Judge William H. Coward in
Superior Court, Buncombe County. On 16 March 2017, the
Supreme Court allowed plaintiff's petition for
discretionary review of additional issues.
Bishop, Capitano & Moss, PA, by J. Daniel Bishop, for
Sharpless & Stavola, P.A., by Brenda S. McClearn, for
case we address a claim for fraudulent concealment and the
application of the statute of repose to a claim of
professional negligence in the context of summary judgment.
Summary judgment is proper if no genuine issue of material
fact exists when viewed in the light most favorable to the
nonmoving party. The record here, when viewed in that light,
presents genuine issues of material fact regarding
plaintiff's fraudulent concealment claim and the scope
and timing of defendants' duties to plaintiff, thus
making summary judgment improper in both instances.
Accordingly, we affirm in part and reverse in part the
decision of the Court of Appeals.
case is currently in the summary judgment stage; thus, we
review the facts in the light most favorable to plaintiff,
the nonmoving party. Plaintiff Karen Head must annually file
her federal tax return as well as several returns for
different states. Plaintiff first hired G. Edward Towson, II,
CPA (Towson) and his firm Gould Killian CPA Group, P.A.
(collectively, defendants) to prepare her 2005 tax returns.
Defendants prepared and timely filed plaintiff's 2005 tax
returns after plaintiff had provided the necessary
information and signatures. Plaintiff subsequently engaged
defendants for tax years 2006 through 2010. Plaintiff's
federal and state tax returns for 2006, 2007, 2008, and 2009
were not filed with the various taxing authorities until
2012, however, giving rise to the present case.
and 12 August 2011, plaintiff received two notices from the
Internal Revenue Service (IRS) stating that she had not filed
her 2006 and 2007 tax returns. Plaintiff forwarded the
notices to Towson, who responded, "I need to roll up my
sleeves and sort out this mess." Towson later stated
that he believed the IRS had made an error because he had
provided the completed returns and filing instructions to
September 2011, plaintiff informed Towson that she was
"leaving [Towson's] accounting firm. Shortly you
will be receiving information from Wayne Roddy
[plaintiff's newly hired CPA] to begin the transfer of
information." Nevertheless, Towson responded by
expressing his intent to keep working on plaintiff's
behalf: "We are almost finished with the 2010 income tax
returns . . . . I will/should have them ready early next week
and will call to coordinate the signing. After that, I will
be happy to provide whatever is needed for Wayne Roddy."
During his deposition, Towson stated that he understood this
exchange to mean that plaintiff terminated him, but he
continued to take action for the next twelve months in
connection with plaintiff's tax matters because
"[w]e were trying merely to assist with resolving the
question . . . . [W]e were not her engaged CPA firm at that
point." Towson did not have the 2010 returns ready as
promised but did file electronically the federal return on 21
response to repeated requests to transfer the information to
Roddy in October and November 2011, Towson responded that
they were working on "amendments" to the 2008 and
2009 tax returns, which they would complete before
transferring since "it would be more difficult for
[Roddy] to step into these." Later plaintiff received
additional notices from the IRS for failing to file her 2006
and 2007 tax returns. Towson informed plaintiff that they
would respond to and "rebut" these tax assessments
and would "keep [plaintiff] up to date on the
progress." Towson stated during his deposition, however,
that he knew he could not speak directly with an IRS agent on
plaintiff's behalf because he did not have a power of
attorney from plaintiff at that point, which the IRS
more IRS notices in March 2012, Roddy directly contacted
Towson, specifically noting that "[t]hese notices seem
to be saying that a return was never filed for these years. .
. . [W]ould it be possible to get a copy of the tax returns
that were filed for these years?" In response, Towson
did not acknowledge that the returns had not been filed.
Instead, Towson stated that he would work with the IRS's
Taxpayer Advocate Service to "personally see to it that
they get the account straightened out." Additionally,
Towson affirmed that they would provide copies of the 2006
and 2007 tax returns to Roddy; defendants did not provide
April 2012, Towson represented to plaintiff that he was
communicating with the Taxpayer Advocate Service and working
on a resolution. Towson nevertheless stated during his
deposition that defendants did not have direct communication
at any point with anyone at the Taxpayer Advocate Service,
and that organization likewise has no record of
communications with Towson.
2012, the IRS sent plaintiff a final notice of intent to
levy. Towson requested that plaintiff provide a power of
attorney to allow him to communicate with the IRS on her
behalf, and plaintiff obliged. During August 2012, Towson
used this power of attorney to communicate with the assigned
revenue officer at the IRS, but Towson consistently
misrepresented these communications to plaintiff.
Pertinently, Towson asserted that the revenue officer had
"put a hold on collection efforts" and would
"help to get the account corrected" once Towson
provided additional information; however, the IRS records
show that the revenue officer instead communicated the IRS
would seek a lien on plaintiff if the returns were not filed
by 17 August 2012. On 17 August 2012, Towson requested an
extension, which the IRS granted, to "re-prepare"
the returns. Towson did not notify plaintiff of this
extension but instead implied that the IRS needed more time
to complete the necessary corrections.
September 2012, the IRS filed a lien against plaintiff. On 27
September 2012, plaintiff contacted Towson declaring her
intention to "retain[ ] [legal] counsel to help resolve
this matter." The same day, Towson responded: "I
actually [met] with [the IRS revenue officer] today and I
think the administrative remedies will resolve this."
Furthermore, Towson asked that plaintiff sign 2006 and 2007
tax return signature pages, without the whole returns,
"to facilitate the proper processing." Plaintiff
provided the signatures on 27 September 2012. Towson replied
that the revenue officer would now have everything she needed
to "correct the account by re-imputing [sic] the tax
return data." Again, Towson did not mention that he had
not yet filed the returns nor that he intended to file the
returns. Towson filed the 2006 and 2007 tax returns with the
IRS on 28 September 2012. Towson later filed the 2008 and
2009 tax returns on 18 October 2012.
November 2013, plaintiff filed her complaint asserting claims
against defendants for professional negligence and fraudulent
concealment, and seeking compensatory and punitive damages.
Plaintiff alleged defendants failed to properly prepare and
file her delinquent tax returns for tax years 2006 through
2009 and intentionally deceived her about the status of the
returns. On 2 May 2014, defendants ...