Ventura County National Bank v. MacKer

Opinion

GILBERT, J.

Negligent misrepresentation may be a species of deceit, but it is not a thoroughbred. Here we hold that in an action against accountants for negligent misrepresentation, the statute of limitations is two years. The trial court sustained a demurrer without leave to amend plaintiff’s cause of action for negligent misrepresentation because the action was barred by a two-year statute of limitations. We affirm.

Facts

Plaintiff, Ventura County National Bank (VCNB), sued defendant accounting firm for accounting malpractice. In its second amended complaint, VCNB alleged in its first cause of action for intentional misrepresentation that in January of 1991 it learned defendant accountants made representations in audit reports for a company’s financial statements, knowing them to be false. In the second cause of action for negligent misrepresentation (Civ. Code, § 1710), and in the third cause of action for fraud, plaintiff alleged that defendants intentionally concealed their lack of knowledge or expertise to prepare an audit.

The trial court sustained without leave to amend the demurrer to the second cause of action for fraud based on negligent misrepresentation. The

[1530]

court relied on Code of Civil Procedure section 339, subdivision 1 which provides a two-year statute of limitations for accountant malpractice, and this court’s holding in

Smyth

v.

USAA Property & Casualty Ins. Co.

(1992) 5 Cal.App.4th 1470, 1477-1478 [7 Cal.Rptr.2d 694]. VCNB then dismissed the first and third causes of action of its complaint, intentional misrepresentation and fraud. This appeal ensued.

Discussion

We independently review this question of law.

(International Engine Parts, Inc.

v.

Feddersen & Co.