Court rules on relevant statute of limitations.The Supreme Court of Michigan ruled that there is a two-year statute of limitations A type of federal or state law that restricts the time within which legal proceedings may be brought. Statutes of limitations, which date back to early Roman Law, are a fundamental part of European and U.S. law. for cases accountants' malpractice malpractice, failure to provide professional services with the skill usually exhibited by responsible and careful members of the profession, resulting in injury, loss, or damage to the party contracting those services. . Local 1064 of the AFL-CIO AFL-CIO: see American Federation of Labor and Congress of Industrial Organizations. AFL-CIO in full American Federation of Labor-Congress of Industrial Organizations U.S. brought an action against Ernst & Young, claiming the firm had failed to detect that the union's bookkeepers had not prepared and submitted reports as required by the Michigan Employment Security Commission for 1984 through 1988. As a result, the commission assessed an increased contribution rate against Local 1064, which cost it more than $21,000. The firm had provided services to the plaintiff during fiscal years 1984, 1985 and 1986. The union did not become aware of the bookkeepers' error until July 1988. The firm made a motion for summary judgment motion for summary judgment n. a written request for a judgment in the moving party's favor before a lawsuit goes to trial and based on recorded (testimony outside court) affidavits (or declarations under penalty of perjury), depositions, admissions of fact, answers on the grounds that the two-year statute of limitations had expired. The trial court denied this motion, ruling that the relevant statute-of-limitations period was actually six years. The firm appealed and the appellate court A court having jurisdiction to review decisions of a trial-level or other lower court. An unsuccessful party in a lawsuit must file an appeal with an appellate court in order to have the decision reviewed. upheld the trial court, ruling that the applicable statute-of-limitations period may be found in either the three-year residual tort tort, in law, the violation of some duty clearly set by law, not by a specific agreement between two parties, as in breach of contract. When such a duty is breached, the injured party has the right to institute suit for compensatory damages. statute, the six-year breach-of-contract statute or the six-year general statute of limitations. (The appeals panel declined to decide which one of these statutes applied because the complaint was brought within the period covered by the statute with the shortest term--the three-year statute of limitations.) The firm appealed the decision to the Supreme Court of Michigan, which reversed the appellate court, ruling that in this case the two-year statute of limitations for professional liability claims applied. The supreme court noted that although the plaintiff alleged both mal-practice and breach of contract, the trial court had ruled that the case was not a breach-of-contract action. The supreme court then turned to the question of whether the six-year general statute of limitations or the two-year statute for malpractice actions applied and concluded that since accountants, as a profession; have increasingly been subject to common-law malpractice actions, the relevant statute of limitations for accounting malpractice was exclusively the two-year statute. (Local 1064, RWDSU RWDSU Retail, Wholesale and Department Store Union AFL-CIO v. Ernst & Young et. al. 535 N.W.2d 187) |
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