I defend property appraisers on a regular basis. One of the issues that always arises in cases alleging negligence against an appraiser is the applicable statute of limitations and the date the injury accrued. Until recently there has been a conflict of opinions within Ohio’s appellate districts as to when a claim for negligence accrues related to the professional negligence of a property appraiser. The Ohio Supreme Court just resolved that conflict in the case of Flagstar Bank, F.S.B v. Airline Union’s Mortgage Company, et al, Slip Opinion No. 2011-Ohio-1961.
In 2008, Flagstar Bank sued an appraiser who, in 2001 and 2002, issued appraisals on three properties for a non-party bank that later sold the properties to Flagstar. These properties went into foreclosure during the recent real estate debacle currently plaguing the country. In resolving the conflict in Ohio as to when an action for professional negligence against appraisers accrues, the Ohio Supreme Court held in Flagstar that “[a] cause of action for professional negligence against a property appraiser accrues on the date that the negligent act is committed, and the four-year statute of limitations commences on that date.”
Notably, the court expressly rejected the “discovery-rule” and the “delayed damages rule.” Under these rules, a plaintiff’s action does not accrue, and the statute of limitations does not begin to run, until the plaintiff knows, or reasonably should have known, that he or she has been injured by the conduct of the defendant (discovery rule), or has actually incurred damages to complete the elements required to bring a cause of action for negligence (delayed damages rule). Now, under Ohio law, a professional negligence claim against an appraiser accrues, and the four-year statute of limitations commences, on the date the appraiser performs any alleged negligent appraisal work.