Accounting malpractice; Statute of limitations; Accrual; MCL 600.5838(1); Effect of sending a bill for services rendered; Bauer v Ferriby & Houston, PC; Offer in Compromise (OIC)

In this accounting malpractice case, the court concluded that reasonable minds could differ as to whether defendant-UHY’s activities in 6/18 could be considered “attending to otherwise completed matters” or constituted “a continuation of professional services” related to an ongoing tax dispute. Thus, it reversed summary disposition for UHY and remanded. Plaintiff filed suit on 6/5/20, asserting that UHY discontinued providing professional services when it allegedly discharged UHY on 6/18/18. UHY asserted that it discontinued its professional services on 11/27/17, the last date on which it provided plaintiff with billed services. The court noted that “the failure to bill for professional services actually provided to a client” does not establish that the “services are not to be considered for purposes of accrual under MCL 600.5838.” While plaintiff was not billed “for services performed after [11/27/17], there was evidence that could be construed as reflecting that UHY continued serving plaintiff in a professional capacity thereafter and did not discontinue rendering services until sometime after” 6/5/18. A cover letter from a UHY employee (W) to the Michigan Department of Treasury on plaintiff’s behalf, which accompanied a 10/30/17 OIC, “indicated or suggested that UHY would continue servicing plaintiff in a professional capacity during the period in which the Department was processing the OIC.” The Department did not formally reject the OIC until 6/8/18, in a “letter to plaintiff, with a copy going to UHY.” A letter from plaintiff’s CEO (S) on 5/30/18 “reflected that plaintiff still looked to UHY to provide guidance, explanations, and answers, and” S noted contacting W days earlier “to discuss issues. While the letter was very critical of UHY, [S] only threatened ‘to engage another firm’ if a viable plan to go forward was not offered, which revealed that plaintiff still believed that UHY was continuing to provide” it professional services. A “flurry of emails from” 6/14 through 6/18/18 “could reasonably be interpreted as showing that UHY was continuing to render professional services for plaintiff by offering a plan or ideas on how to keep the battle against the Department afloat.” Thus, a question of fact existed as to whether the action accrued on 11/27/17, making the complaint untimely, or whether it accrued after 6/5/18, making it timely.