How much time do people have to sue professionals for negligence?

For years, Ohio appellate courts have given mixed signals on when the statutory four-year time limit begins for bringing professional negligence cases against professionals other than doctors and lawyers. Do the four years start when a client discovers the harm or the relationship with the professional is terminated? Or does the clock start when the damage caused by the negligence actually occurs?

Last year, the Ohio Supreme Court answered those questions, at least as they apply to property appraisers. The high court ruled in Flagstar Bank, F.S.B. v. Airline Union's Mortgage Co. that the four-year statute of limitations for professional negligence starts on the date of the alleged negligent act—in this case, when appraisals were performed, and not later, when Flagstar lost money on the properties' mortgages due to foreclosure.

Rejecting the application of the "delayed-damages" rule in the case of appraiser negligence, the Supreme Court discussed lower court rulings that had applied the rule to accountants, tax preparers and real estate title agents, tipping its hand that it would likely not apply the rule to extend the running of the statute of limitations in cases involving them. If that assumption is true, these professionals join surveyors and securities broker/dealers as potential defendants whose lawsuit clocks start to tick when the allegedly negligent act is performed and not at a later date, when the client realizes the alleged error or actually is damaged by it.

Earlier this year, in Auckerman v. Rogers, the Ohio Court of Appeals (2nd District), which serves six counties, including the city of Dayton, ruled in accord with Flagstar Bank when it affirmed a lower court dismissal of a "negligent-procurement" lawsuit against an insurance agent based on the failure to provide a customer with uninsured/underinsured motorist insurance. The Auckerman case is significant because the Court of Appeals there found that the Supreme Court in Flagstar Bank had, by implication, overruled a previous Supreme Court holding applying a "delayed-damages" extension to a case involving an insurance agent.

Based on these cases, the trend appears to be to more strictly apply the statute of limitations to time-bar claims against broad classes of professionals other than doctors and lawyers.

—Richard G. Witkowski
witkowski@nicola.com