E-Fab, Inc. v. Accountants, Inc. Services

In E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308--a demurrer case--the defendant employment agency assigned a temporary bookkeeper to work for plaintiff. The bookkeeper embezzled $ 1 million from plaintiff beginning in 1996. The court assumed that plaintiff was negligent in failing to discover the embezzlement prior to the bookkeeper's arrest in November 2003. At about the time the bookkeeper was arrested, plaintiff discovered from the police that the defendant agency had misrepresented the bookkeeper's criminal history. The court of appeal held that, even though plaintiff was charged with knowledge of the harm caused by the bookkeeper as early as 1996, the plaintiff's fraud claim against the agency did not accrue until plaintiff learned of the misrepresentation.