Accountant is not liable for emotional distress.The Supreme judicial Court of Maine ruled that an accountant cannot be held liable for damages for emotional distress emotional distress n. an increasingly popular basis for a claim of damages in lawsuits for injury due to the negligence or intentional acts of another. Originally damages for emotional distress were only awardable in conjunction with damages for actual physical harm. sustained as a result of an alleged breach of contract. James and Virginia McAfee bought a small store in Maine and hired Douglass Wright as their accountant. In 1988, the Internal Revenue Service informed the McAfees that they were delinquent in filing their tax forms and paying their taxes for 1987. The McAfees discontinued their relationship with the CPA (Computer Press Association, Landing, NJ) An earlier membership organization founded in 1983 that promoted excellence in computer journalism. Its annual awards honored outstanding examples in print, broadcast and electronic media. The CPA disbanded in 2000. in June 1990 because they believed he was responsible for the delinquency and requested that he return their files. He refused until his former clients began a court action against him in district court in July 1991. The McAfees alleged breach of contract and sought damages for both the breach and for emotional distress. The CPA counterclaimed for unpaid fees. The lower court ruled he was liable to the McAfees for interest and penalties associated with their late filings and for Virginia McAfees emotional distress from her tax problems. (James McAfee had died. The CPA appealed this ruling in the superior court, which reviewed the evidence concerning the alleged late filings. Contrary to the district court finding, the superior court concluded the evidence showed the McAfees received the W-2 forms from their CPA around January 1989. The accountant conceded liability for late preparation of the 1988 tax returns but not for the W-2 forms. Once the McAfees received these forms, it was their responsibility to file copies with the IRS An abbreviation for the Internal Revenue Service, a federal agency charged with the responsibility of administering and enforcing internal revenue laws. . Thus, the superior court said, the district court had erred in holding the CPA responsible for the IPS penalties against the McAfees. Additionally, the superior court stated the general rule that with few exceptions damages are not recoverable for emotional distress arising from a breach of contract. The court found unpersuasive Virginia McAfee's contention that the accountant's fiduciary relationship fiduciary relationship n. where one person places complete confidence in another in regard to a particular transaction or one's general affairs or business. The relationship is not necessarily formally or legally established as in a declaration of trust, but can be with her and her late husband was similar to the standard exceptions. Holding otherwise, the court said, would make emotional distress damages available in most cases involving breach of contract. (McAfee v. Wright, 651 A.2d 371 Me. 1994. Editor's note Editor's Note (foaled in 1993 in Kentucky) is an American thoroughbred Stallion racehorse. He was sired by 1992 U.S. Champion 2 YO Colt Forty Niner, who in turn was a son of Champion sire Mr. Prospector and out of the mare, Beware Of The Cat. Trained by D. : Thanks to Dennis Zaragoza of Wild, Zaragoza, Carey & Fife for the Danning case. --Edited by Wayne Baliga, CPA, JD, CPCU CPCU Chartered Property Casualty Underwriter CPCU Cardiac Progressive Care Unit CPCU Custody Pending Completion of Use , CFE CFE Conventional Forces in Europe (treaty) CFE Cash Flow to Equity (finance/accounting) CFE Comisión Federal de Electricidad (México) CFE Certified Fraud Examiner , president of Aon Technical Insurance Services. |
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