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Edwards v. Demedis12/22/1997
efore us because some harm occurred when the transfer distribution was received and deposited into individual retirement accounts. If the advice to do so was negligent, the harm was not speculative and incapable of constituting the damage element of a tort. See Davidson v. Miller, 276 Md. 54, 61-62 (1975) (prospective damages may be considered competent evidence if they are reasonably probable). Second, part of the courts rationale in International Engine Parts was to adopt a bright line rule, while expressly recognizing that in some cases injury will be clear before a notice of deficiency is issued. Unlike the court in International Engine Parts, we do not believe a bright line rule presently exists in Maryland, and we decline to adopt one for application in malpractice actions based on negligent tax advice.
In Ackerman v. Price Waterhouse, 644 N.E.2d 1009 (N.Y. 1994), the court held that, in a malpractice action against an accountant based on negligent preparation of tax returns, limitations began to run when the work product was received by the client. The court did not apply the discovery rule, however, but applied the New York rule that a cause of action accrues in a malpractice action when the injury occurs, even if the claimant is ignorant of the wrong or the injury. Based on New York law, the court rejected the notice of deficiency assessment as the point in time when the cause of action accrued and held that the action accrued at the time of the original negligent act. See also Gray v. Barry, 656 N.E.2d 729 (Ohio App. 1995) (malpractice action against an accountant for failure to file tax returns. No discovery rule under the applicable law.) Wynn v. Estate of Holmes, 815 P.2d 1231 (Okl. App. 1991) (malpractice action against accountant wherein notice of deficiency triggered commencement of limitations. Distinguishable because under applicable law extent of loss had to be known, and additionally, result was based on estoppel).
B.
Appellants next contend that the period of limitations was tolled because of the continuing representation by Blanton. Appellants point out that Blanton continued to advise them in dealings with the Internal Revenue Service and in the subsequent litigation in federal court. Specifically, appellants were advised that the revenue ruling did not apply to them, that they should withdraw funds from the individual retirement accounts, pay the taxes, claim a refund, and subsequently, that they should reject the Internal Revenue Service settlement offer. This advice was negligent and also prevented the issuance of a notice of deficiency.
It is clear that continuous representation alone is not sufficient to avoid the bar of limitations. See Leonhart, 265 Md. at 228. In Watson v. Dorsey, 265 Md. 509 (1972), the Court of Appeals had before it a malpractice suit against an attorney based on alleged incompetence at trial in failing to call certain witnesses. The issue on appeal was the date of accrual of the cause of action for malpractice. Appellant argued that the cause of action accrued when the case was affirmed on appeal. Appellant also argued that the relationship of trust and confidence and the continuing relationship with the defendant lawyer should prevent accrual of a cause of action at an earlier date. The Court of Appeals applied the discovery rule and held that the claimant had knowledge of the wrong when the case was tried and lost.
Appellants reliance on cases such as Waldman v. Rohrbaugh, 241 Md. 137 (1966), Vincent v. Palmer, 179 Md. 365 (1941), and W.B.& A. Electric RR Company v. Moss, 130 Md. 198 (1917), is misplaced. Waldman is an early application of the discovery rule in a medical malpractice case, and Vincent
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