Barger v. McCoy Hillard & Parks, (94-876-2) 05/07/1996

NO. COA94-876

NORTH CAROLINA COURT OF APPEALS

Filed: 7 May 1996

JERRY H. BARGER, H. WAYNE KENNERLY, and HARRY G. YOUNG, JR.,

            Plaintiffs

     v.

McCOY HILLARD & PARKS, A North Carolina General Partnership, DAVID R. McCOY, MICHAEL W. HILLARD, BRENT H. PARKS and SHEILA LEE,

            Defendants

    Appeal by plaintiffs from order entered 27 April 1994 by Judge William H. Helms in Rowan County Superior Court. Originally heard in the Court of Appeals 9 May 1995.

    Caudle & Spears, P.A., by Thad A. Throneburg and Jeffrey L. Helms, for plaintiff-appellants.

    Hedrick, Eatman, Gardner & Kincheloe, by Hatcher Kincheloe, L. Kristin King, and James J. Hutton for defendant-appellees.

    MARTIN, John C., Judge.

    Plaintiffs' Petition for Rehearing of our decision filed 3 October 1995, reported at 120 N.C. App. 326, 462 S.E.2d 452, was allowed on 29 November 1995 pursuant to Rule 31 of the North Carolina Rules of Appellate Procedure. We allowed the filing of supplemental briefs.

    Upon review, we conclude that our earlier opinion was in error in characterizing plaintiffs' negligent misrepresentation claim as an accounting malpractice claim barred by the three-year statute of limitations of G.S. § 1-15(c). In NCNB National Bank v. Deloitte & Touche, 119 N.C. App. 106, 458 S.E.2d 4, cert. denied, 341 N.C. 651, 462 S.E.2d 514 (1995), this Court stated:

    The instant [accountant's liability] case is not a malpractice case with privity between plaintiff and defendant; it is a negligent misrepresentation case. (See Insurance Co. v. Holt, 36 N.C. App. 284, 288, 244 S.E.2d 177, 180 (1978), where our Court held that "claims for relief for attorney malpractice are actions sounding in contract and may properly be brought only by those who are in privity of contract with such attorneys by virtue of a contract providing for their employment. See also Jefferson-Pilot Ins. Co. v. Spencer, 336 N.C. at 56, 442 S.E.2d at 319, where our Supreme Court stated that because the claim was one for negligent misrepresentation, "it [was] governed by the statute of limitations set out in N.C.G.S. § 1-52(5)[.]").

Id. at 114-15, 458 S.E.2d at 9. As we stated in our earlier opinion, there was no contractual duty between plaintiffs and defendants in the present case; accordingly, plaintiffs' claim is one for negligent misrepresentation and is governed by the statute of limitations set out in G.S. § 1-52(5).

    Under G.S. § 1-52(5), a claim for negligent misrepresentation "does not accrue until two events occur: first, the claimant suffers harm because of the misrepresentation and second, the claimant discovers the misrepresentation." Jefferson-Pilot Life Ins. Co. v. Spencer, 336 N.C. 49, 57, 442 S.E.2d 316, 320 (1994). According to the plaintiffs' forecast of evidence in this case, they discovered the harm in 1990, and their complaint was filed in 1992. We therefore withdraw that portion of our previous opinion holding that plaintiffs' negligent misrepresentation claim is barred by the statute of limitations as a matter of law, and we reverse the trial court's entry of summary judgment in favor of defendants as to the negligent misrepresentation claim.

    Affirmed in part, reversed in part, and remanded.

    Judges JOHNSON and GREENE concur.

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