COURT OF APPEALS OF OHIO, EIGHTH DISTRICT COUNTY OF CUYAHOGA NO. 72927 STEPHEN J. BURNS, ET AL. : : Plaintiffs-Appellants : : -vs- : JOURNAL ENTRY : AND PRICE WATERHOUSE : OPINION : Defendant-Appellee : : DATE OF ANNOUNCEMENT : SEPTEMBER 24, 1998 OF DECISION : CHARACTER OF PROCEEDING : Civil appeal from Common Pleas Court Case No. CV-304673 JUDGMENT : Affirmed. DATE OF JOURNALIZATION : APPEARANCES: For plaintiffs-appellants: Dennis R. Lansdowne, Esq. Stuart E. Scott, Esq. Spangenberg, Shibley, Traci, Lanicone & Liber 2400 National City Center 1900 East Ninth Street Cleveland, Ohio 44114-3400 For defendant-appellee: David C. Weiner, Esq. Hahn Loeser & Parks 3300 BP America Building 200 Public Square Cleveland, Ohio 44114 [Attorneys continued] Scott A. Fink, Esq. Matthew B. Hinerfeld, Esq. Gibson, Dunn & Crutcher, L.L.P. One Montgomery Street Telesis Tower San Francisco, CA 94104-4505 -2- MICHAEL J. CORRIGAN, J.: Stephen and Helen Burns, plaintiffs-appellants, appeal from the judgment of the Cuyahoga County Court of Common Pleas, Case No. CV-304673, in which the trial court granted the motion to dismiss filed by Price Waterhouse, defendant-appellee. Plaintiffs- appellants assign one error for this court's review. Plaintiffs-appellants' appeal is not well taken. On March 8, 1996, plaintiffs-appellants filed the underlying action in the Cuyahoga County Court of Common Pleas against defendant-appellee alleging eight causes of action: breach of fiduciary duty, fraud by a fiduciary, negligent misrepresentation, negligence, breach of contract, intentional infliction of severe emotional distress and two loss of consortium claims. The complaint arose out of a 1979 investment in a tax shelter program offered by First Western Government Securities, Inc. and allegedly highly touted by defendant-appellee. Plaintiffs-appellants maintain that as a result of defendant-appellee's recommendation, they invested in the First Western Program in 1979 and filed corresponding tax returns in 1979 and 1982 reflecting a significantly reduced tax liability. However, in January 1984, plaintiffs-appellants received a notice of deficiency from the Internal Revenue Service ( IRS ) with respect to their First Western investment. The notice indicated that the subject deductions were being disallowed in their entirety. Accordingly, plaintiffs-appellants owed $475,658.00 in income tax for 1979 as well as a 5% negligence penalty totaling -3- $23,783.00. An appeal to the tax court followed. On October 21, 1987, the tax court upheld the determination of the IRS and disallowed the deduction. On December 21, 1990, plaintiffs-appellants filed a complaint against defendant-appellee in the Federal District Court for the Northern District of Ohio. Defendant-appellee filed a motion to dismiss the federal action based, in part, upon the alleged expiration of the applicable statutes of limitation. On March 10, 1995, the federal district court dismissed all of plaintiffs- appellants' federal claims as being time-barred and declined to accept jurisdiction over plaintiffs-appellants' state law claims. That decision was affirmed by the United States Court of Appeals for the Sixth Circuit. Plaintiffs-appellants did not seek further federal review, but rather, choose to file the underlying action in the Cuyahoga County Court of Common Pleas. On May 20, 1996, defendant-appellee filed a motion to dismiss the underlying complaint or, in the alternative, to strike and for summary judgment in which defendant-appellee maintained that all claims raised by plaintiffs-appellants were barred by the applicable statutes of limitation. Defendant-appellee based the motion upon collateral estoppel principles as well as the relevant statutes of limitation. On August 23, 1996, plaintiffs-appellants filed their first amended complaint. On September 20, 1996, defendant-appellee filed a motion to dismiss the first amended complaint or, in the alternative, to strike and for summary judgment on the same grounds -4- as previously set forth in defendant-appellee's prior motion. The trial court ultimately granted defendant-appellee's motion through a journal entry dated July 2, 1997, in which the trial court stated: Motion of Defendant Price Waterhouse LLP to Dismiss the First Amended Complaint . . . (9-20-96) is granted as Plaintiffs' claims were filed outside the statute of limitations. Final. On July 27, 1997, plaintiffs-appellants filed a timely notice of appeal from the judgment of the trial court. Plaintiffs-appellants' sole assignment of error on appeal states: THE TRIAL COURT IMPROPERLY DISMISSED THE BURNSES' AMENDED COMPLAINT BASED UPON THE STATUTE(S) OF LIMITATION BECAUSE THE AMENDED COMPLAINT DOES NOT CONCLUSIVELY DEMONSTRATE ON ITS FACE THAT ANY OF THE ALLEGED CAUSES OF ACTION ARE TIME BARRED. Plaintiffs-appellants argue, through their sole assignment of error, that the trial court improperly dismissed their fraud and negligence claims based upon the alleged expiration of the applicable statutes of limitation. (Since plaintiffs-appellants failed to raise the other causes of action enumerated in the first amended complaint on appeal, plaintiffs-appellants have waived any further arguments concerning those claims. See State v. Taylor (1979), 78 Ohio St.3d 15, 23.) Specifically, plaintiffs-appellants maintain that defendant-appellee's alleged fraud and negligence arising out of the First Western investment could not have been discovered until, at the earliest, October 21, 1987 when the tax court issued its decision disallowing the deduction and upholding the decision of the IRS. Accordingly, plaintiffs-appellants -5- maintain that their claims were filed within the applicable statutes of limitation as set forth in R.C. 2905.09. Plaintiffs- appellants maintain further that the statute of limitations for an accountant's negligence does not begin to run until the injury occurs or damages are suffered. This contention is in direct contravention to the Ohio Supreme Court's holding in Investors REIT One v. Jacobs (1989), 46 Ohio St.3d 176, 546 N.E.2d 206 and Thornton v. Windsor House, Inc. (1991), 57 Ohio St.3d 158, 566 N.E.2d 1220 in which the Court determined that the four year statute of limitations governing accounting negligence commenced to run when the alleged negligent act was committed. A trial court may properly dismiss a complaint for failure to state a claim upon which relief may be granted when it appears beyond a doubt that the plaintiff can prove no set of facts in support of the claim which would entitle the plaintiff to relief. York v. Ohio State Highway Patrol (1991), 60 Ohio St.3d 143, citing O'Brien v. University Community Tenants Union, Inc. (1975), 42 Ohio St.2d 242. The trial court must presume that all factual allegations of the complaint are true and make all inferences in favor of the nonmoving party when considering a motion to dismiss pursuant to Civ.R. 12(B)(6). York, supra. In Francis v. Cleveland (1992), 78 Ohio App.3d 593, this court determined that the dismissal of a federal district court action does not extend the time within which to commence an action in state court, so as to toll the statute of limitations. Citing to McClure v. Middletown Hosp. Assn. (S.D. Ohio 1985), 603 F.Supp. -6- 1365. This court noted that the primary purpose of a statute of limitations is to reduce to a fixed interval the time between the accrual of a right of action and the commencement of the action, and to put all on notice as to that interval. The Francis Court found that statutes of limitations are designed to protect persons from having to defend against stale claims. In the case herein, plaintiffs-appellants maintain that their claims accrued in October 1987 and that the applicable statute of limitations for each cause of action is four years. Even assuming plaintiffs-appellants arecorrect as to these two assertions, it is readily apparent that the 1996 filing in the Cuyahoga County Court of Common Pleas was well outside even plaintiffs-appellants' estimation of the permissible four year statute of limitations for the fraud and negligence causes of action. Francis, supra. Accordingly, the trial court did not err in dismissing the underlying case based upon the expiration of the applicable statutes of limitation. Plaintiffs-appellants' sole assignment of error is not well taken. Judgment of the trial court is hereby affirmed. -7- It is ordered that appellee recover of appellant costs herein taxed. The Court finds there were reasonable grounds for this appeal. It is ordered that a special mandate issue out of this Court directing the Cuyahoga County Common Pleas Court to carry this judgment into execution. A certified copy of this entry shall constitute the mandate pursuant to Rule 27 of the Rules of Appellate Procedure. KENNETH A. ROCCO, P.J., AND JAMES D. SWEENEY, J., CONCUR. JUDGE MICHAEL J. CORRIGAN N.B. This entry is an announcement of the court's decision. See App.R. 22(B), 22(D) and 26(A); Loc. App.R. 27. This decision will be journalized and will become the judgment and order of the court pursuant to App.R. 22(E), unless a motion for reconsideration with supporting brief, per App.R. 26(A) is filed within ten (10) days of the announcement of the court's decision. The time period for review by the Supreme Court of Ohio shall begin to run upon the journalization of this court's announcement of decision by the .