DMB REALCO, LLC v. Mariscal, Weeks, McIntyre& Friedlander, P.A., No. 1 CA-CV 24-0278 (App., Div. I, July 8, 2026) (J.Catlett)https://coa1.azcourts.gov/Portals/1/OpinionFiles/Div1/2026/CV%2024-0278%20DMB%20Realco.pdf?ver=7kopdcdoiiEKJ6cTZGtzDw%3D%3D

LEGAL MALPRACTICE CLAIM MUST COMMENCE WITHIN 2 YEARS AFTER ACCRUAL OF ACTION/ACCRUAL IN NONLITIGATION CONTEXT OCCURS WHEN CLIENT SHOULD KNOW ATTORNEYS' NEGLIGENCE CAUSED CLIENT HARM/HARM IS SUFFICIENT WHEN "IRREMEDIABLE AND IRREVOCABLE"

In 2006 DMB REALCO [DMB] hired attorney to create a conservation easement deed to donate land to the Town of Buckeye with the intent of getting a charitable tax deduction. Four years later the Internal Revenue Service [IRS] audited DMB and objected to the deduction. DMB went back and forth with the IRS attempting to sustain if not fix the objection until finally in December 2015 the IRS issued a Notice of Final Partnership Administration Adjustment [FPAA] whereupon DMB and attorney entered a tolling agreement extending until June of 2018. DMB sued attorney for malpractice in August 2018.

Attorneys' motion for summary judgment, based upon the two-year statute of limitations, A.R.S. Sec. 12-542 was granted by the Maricopa County Superior Court. Plaintiff appealed and the Arizona Court of Appeals vacated and remanded the superior court judgment.

In the transactional/non-litigation setting the analysis of the accrual of the statute of limitations requires the court consider the purpose for which the client sought the attorneys' advice and then to determine when the purpose of the advice was thwarted by the attorneys' negligence causing "irremediable and irrevocable harm."

This requires a factual analysis. For example, if the lawyer admits to client that he or she has committed malpractice thus first making client aware of his or her irremediably and irrevocable harm the action likely accrues.

Here DMB hired attorney for the purpose of creating a charitable easement which would benefit the Town of Buckeye, but also benefit DMB with favorable tax treatment. DMB challenged the IRS objection to favorable tax treatment and argued back and forth with the IRS for years attempting to secure the deduction. It was not until the FPAA was issued, however that client finally irremediably and irrevocably lost the favorable tax treatment and and the malpractice action accrued.   As a result of the tolling agreement, DMB's lawsuit was filed timely.