# Ford's Inc. v. Russell Brown & Co.

> Supreme Court of Arkansas · July 10, 1989 · 299 Ark. 426

URL: https://www.frixlaw.com/law-library/cases/9778887

## Case

- **Full name:** FORD’S INC., an Arkansas Corporation, Et Al. v. RUSSELL BROWN & COMPANY
- **Court:** Supreme Court of Arkansas
- **Decided:** July 10, 1989
- **Citations:** 299 Ark. 426; 773 S.W.2d 90; 1989 Ark. LEXIS 370
- **Precedential status:** Published
- **Opinion:** Dissent by Purtle
- **Judges:** Hickman, Purtle
- **Cited by:** 22 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9778887

## Opinion text

John I. Purtle, Justice, dissenting. The appellants employed the appellee to liquidate the family business in a manner which would cause the appellants to pay the least amount of taxes possible. The appellee came up with a tax-free return for calendar year 1974. However, the IRS commenced an audit of the returns in late 1976 or early 1977, which resulted in a request from the IRS to the appellants to pay $648,000.00 in taxes resulting from the liquidation of the business in 1974. The first notice of the deficiency was given in January, 1978.
The appellants contacted the appellee immediately after receiving the deficiency notice and were informed by appellee that the IRS was in error and not to worry about it. Up until September 8, 1978, the appellees insisted the appellants did not owe any taxes. On that date the appellee conceded that the IRS was correct and admitted the appellants owed money. Furthermore, they recommended that the appellants pay a proposed settlement. On October 26,1978, the IRS made its assessment for the deficiency judgment.
I agree that this court has never before written an opinion concerning the statute of limitations for malpractice by accountants. In my opinion we should use common sense and ordinary reasoning power to establish the commencement of the three-year limitation period. In that case the earliest the statute would commence to run would be September 8, 1978. The appellants filed suit on September 4, 1981, which is clearly within the three-year limit up until September, 1978. The appellees defended their prior action and insisted the IRS was wrong. In fact the appellants had not been harmed until they received a demand for additional taxes. There was no way appellants should have or could have learned, for that matter, that they would owe additional taxes.
The only fair and reasonable way to establish the statute of limitations is to use the date of September 8, 1978, because the appellees deliberately and intentionally covered the error or miscalculation up until that time. Justice demands no less.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9778887. Public record. Not legal advice.