NMC v. LLC (2026)

MEMORANDUM DECISION

[1] NMC Family Holdings, Inc. (“NMC”) filed an accounting malpractice action against Watermark Group, LLC (“Watermark”), alleging that Watermark negligently failed to detect and report the fraudulent manipulation of the financial records of Ameribridge, LLC (“Ameribridge”), a company in which NMC holds a majority interest. The trial court granted summary judgment in favor of Watermark, and NMC now appeals. We affirm.

Issue

[2] NMC presents three issues for our review, one of which we find dispositive: whether NMC's claims are barred by the one-year statute of limitations applicable to accounting malpractice actions.

Facts

Ameribridge builds, repairs, and installs airport passenger boarding bridges. Dustin Sloan served as Ameribridge's general manager until October 2020. Sloan was also a partial owner of Ameribridge. In June 2019, the three Steingart brothers—Kevin, Dave, and Bruce—formed NMC and contributed their shares in a predecessor entity, NMC/Wollard, Inc., to NMC. NMC/Wollard, in turn, transferred its Ameribridge units to NMC, making NMC a 91.7% owner of Ameribridge. Kevin Steingart also acted as Ameribridge's president. Watermark is a professional accounting firm that was engaged to review Ameribridge's financials from 2016 to 2018, and Tony Bultinck was the Watermark employee responsible for overseeing these tasks.

[3] Sloan manipulated Ameribridge's construction-in-progress (“CIP”) reports by overstating the percentage of the projects’ completion, understating project costs, and falsifying other data so that Ameribridge appeared to be profitable when, in reality, it was losing millions of dollars.

[4] Jeff Jones was Ameribridge's controller. On August 25, 2019, Ameribridge terminated Jones’ employment. Jones subsequently called Bultinck and told him about his concerns regarding financial manipulation by Sloan. Kevin Steingart called Bultinck on September 9, 2019, to ask him about Jones’ termination; however, Bultinck said nothing about Jones’ allegations regarding Sloan's wrongdoing during the conversation.

[5] On September 12, 2019, Jones’ attorney sent a demand letter to Kevin Steingart and Sloan claiming that Jones was wrongfully terminated. This letter also detailed Sloan's manipulation of Ameribridge's financial data. Kevin forwarded that letter to his brothers, Dave and Bruce, on September 16, 2019. Sloan, however, dismissed Jones’ claims as those of a “disgruntled employee.” Appellant's App. Vol. IV p. 62. Ameribridge's attorney and accounting manager agreed with this assessment, and Ameribridge took no action against Sloan at that time.

[6] On December 13, 2019, Watermark issued a 2018 financial statement for Ameribridge even though it lacked certain financial data Watermark had requested from Sloan. The financial statement indicated that Ameribridge was a viable business but did note a large increase in accrued job costs and an increase in costs and earnings in excess of billings.

[7] In October 2020, Ameribridge's new controller, Tom Naughton, also discovered Sloan's financial manipulations. Specifically, Naughton found that Sloan had overstated job costs incurred by inflating the percentage of completed projects to recognize revenue and profit prematurely and by understating the estimated total project costs to make jobs appear more profitable. Naughton's discoveries led to Sloan's termination from Ameribridge on October 27, 2020. Prior to this, NMC had loaned money to Ameribridge based on Watermark's financial reviews, which indicated no issues with Ameribridge's profitability. After Sloan's financial misconduct was uncovered, NMC loaned additional money to Ameribridge to ensure that projects were completed.

[8] In November 2021, Ameribridge was put into receivership.¹ On December 9, 2021, Ameribridge and NMC filed an action against Watermark alleging accounting malpractice. In October 2022, Ameribridge's receiver (“Receiver”) filed a motion to settle Ameribridge's claims against Watermark for $50,000. The Steingarts objected, but the receivership court overruled the objections and authorized the settlement. The Steingarts appealed, and this Court affirmed. See Steingart v. Musgrave, 221 N.E.3d 725, 734 (Ind. Ct. App. 2023).

[9] On March 13, 2024, Watermark and Ameribridge, through the Receiver, executed a Settlement Agreement releasing Watermark “from any and all claims ․ which Ameribridge now has, or hereinafter may have.” Appellant's App. Vol. III p. 135. On March 15, 2024, Watermark filed a stipulation for dismissal with prejudice of Ameribridge's claims. The trial court granted the stipulation and stated that the action would continue with regard to NMC.

[10] On August 29, 2025, Watermark filed a motion for summary judgment along with its designated evidence regarding NMC's accounting malpractice claims. NMC filed a brief in opposition to summary judgment on September 29, 2025, along with its designated evidence. A hearing on the summary judgment motion was held on October 24, 2025, and the trial court issued an order on October 29, 2025, granting summary judgment in favor of Watermark. NMC now appeals.

Discussion and Decision

I. Summary Judgment Standard of Review

[11] NMC challenges the trial court's grant of summary judgment in favor of Watermark. “We review summary judgment decisions de novo, and Trial Rule 56(C) supplies the framework.” Cave Quarries, Inc. v. Warex LLC, 240 N.E.3d 681, 684 (Ind. 2024). “The moving party is entitled to summary judgment only if the evidence it designates in support of its motion ‘shows that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.’ ” Id. at 684-85 (quoting Ind. Trial Rule 56(C)). The purpose of summary judgment is to withdraw issues from the jury only when there are no genuine material factual issues for the jury to decide. Id. at 685.

[12] The summary judgment movant has the burden of making a prima facie showing that there is no genuine issue of material fact and that it is entitled to judgment as a matter of law. Burton v. Benner, 140 N.E.3d 848, 851 (Ind. 2020). The burden then shifts to the non-moving party, who must then show the existence of a genuine issue of material fact. Id. On appellate review, we resolve “[a]ny doubt as to any facts or inferences to be drawn therefrom ․ in favor of the non-moving party.” Id. “We limit our review to the materials designated at the trial level.” Gunderson v. State, Ind. Dep't of Nat. Res., 90 N.E.3d 1171, 1175 (Ind. 2018).

II. NMC's claims against Watermark are barred by the applicable statute of limitations.

[13] NMC claims that neither the statute of limitations nor the statute of repose bars its negligence claims against Watermark. We disagree and conclude that NMC's claims are barred by the statute of limitations.

[14] The parties agree that NMC's claims are governed by the Accountancy Act, Indiana Code Chapter 25-2.1-15, which contains only two sections. The first section describes the scope of the Act:

This chapter governs an action based on negligence or breach of contract brought against an accountant, a partnership of accountants, or an accounting corporation registered, licensed, or practicing in Indiana by an individual or a business entity claiming to have been injured as a result of financial statements or other information examined, compiled, certified, audited, or reported on by the defendant accountant as a result of an agreement to provide professional accounting services.

Ind. Code § 25-2.1-15-1. Here, the Accountancy Act clearly governs NMC's claims because they are based on alleged negligence in the preparation of financial statements made as a result of an agreement to provide professional accounting services. NMC does not contest this.

[15] The second Section of the Accountancy Act provides:

An action under this chapter must be commenced by the earlier of the following:

(1) One (1) year from the date the alleged act, omission, or neglect is discovered or should have been discovered by the exercise of reasonable diligence.

(2) Three (3) years after the service for which the suit is brought has been performed or the date of the initial issuance of the accountant's report on the financial statements or other information.

Ind. Code § 25-2.1-15-2 (emphasis added). Subsection (1) of this statute is a statute of limitations that “contains a ‘discovery’ rule that tolls the expiration of the period until the plaintiff discovers, or should have discovered, the negligent act or omission.” Crowe, Chizek, & Co., L.L.P. v. Oil Tech., Inc., 771 N.E.2d 1203, 1207 (Ind. Ct. App. 2002), trans. denied.²

[16] “This statute ‘provides clear direction as to when a claim accrues and the period within which that claim must be brought’ by triggering upon discovery of the ‘act, omission or neglect’ rather than discovery of a cause of action.” Bambi's Roofing, Inc. v. Moriarty, 859 N.E.2d 347, 355 (Ind. Ct. App. 2006) (quoting KPMG, Peat Marwick, LLP v. Carmel Fin. Corp., 784 N.E.2d 1057, 1061 (Ind. Ct. App. 2003)). Thus, “the one-year limitations period is tolled until the date that the alleged negligence is discovered or should have been discovered by the exercise of reasonable diligence.” Id. (citing Crowe, Chizek, & Co., 771 N.E.2d at 1207). “[I]t is not necessary under this rule that the full extent of the damage be known or even ascertainable, but only that some ascertainable damage has occurred.” Robertson v. State, 141 N.E.3d 1224, 1227 (Ind. 2020) (citations and internal quotation marks omitted).

[17] Under the discovery rule, “a plaintiff has a duty ․ to exercise reasonable diligence to discover the negligent acts or omissions.” Bambi's Roofing, 859 N.E.2d at 356. “The exercise of reasonable diligence means simply that an injured party must act with some promptness where the [f]acts and circumstances of an injury would put a person of common knowledge and experience on notice that some right of his has been invaded or that some claim against another party might exist.” Id. (emphasis added).

[18] “[T]he discovery rule only postpones the statute of limitations by belated discovery of key facts, not by delayed discovery of legal theories.” Id. As our Supreme Court has noted, “Indiana's discovery rule ‘does not require a smoking gun in order for the [period] of limitations to commence.’ ” Kenworth of Indianapolis, Inc. v. Seventy-Seven Ltd., 134 N.E.3d 370, 381 (Ind. 2019) (quoting Perryman v. Motorist Mut. Ins. Co., 846 N.E.2d 683, 689 (Ind. Ct. App. 2006)).³

[19] Here, the designated evidence shows that, on September 12, 2019, Kevin Steingart—Ameribridge's president and an officer and shareholder of NMC—received a letter from Jones’ counsel detailing Jones’ allegations that Sloan was manipulating Ameribridge's financials. These allegations included falsified CIP reports, shifted costs, manipulated receivables, and a “cookie account.”⁴ Appellant's App. Vol. II p. 148. Kevin forwarded that letter to his brothers, Dave and Bruce, on September 16, 2019, so that by that date, all three Steingart brothers (and, therefore, NMC) possessed the allegations in writing. The misconduct alleged in this letter is the very same conduct NMC now contends Watermark negligently failed to detect. Accordingly, NMC was put on notice of Watermark's failure to detect the financial irregularities in Ameribridge's records by September 16, 2019, when all three Steingart brothers knew of Jones’ written allegations.

[20] According to NMC, the Jones letter conveyed only unverified accusations, and NMC possessed nothing more than suspicion until Ameribridge's new controller confirmed the fraud in October 2020. But the discovery rule does not require confirmation of wrongdoing; it requires only that the plaintiff possess facts that would lead a person of ordinary diligence to inquire whether a claim might exist. Bambi's Roofing, 859 N.E.2d at 356. The September 2019 letter was a detailed, written account, prepared by Jones’ counsel, that itemized the same manipulations NMC now contends Watermark negligently failed to detect. Thus, a duty to inquire arose, and the one-year period began to run on September 16, 2019, when the Steingarts, and, therefore, NMC, were aware of Jones’ serious allegations against Sloan. Because NMC did not file suit until December 9, 2021, well over a year later, its claim against Watermark is time-barred under the one-year statute of limitations contained in the Accountancy Act.

[21] Even if we accepted NMC's contention that it discovered nothing until October 27, 2020—the date Ameribridge's new controller uncovered the fraud and Ameribridge terminated Sloan—the result would be the same. Measured from that later date, NMC filed its complaint 408 days after it knew or should have known of Watermark's negligence, forty-three days past the one-year statute of limitations. Simply put, NMC's negligence claims were not timely under either date.

[22] We find support for our holding in Bambi's Roofing, 859 N.E.2d 347. In that case, a roofing company filed a negligence complaint against its outside accountant and the accountant's firm, in which it alleged that the accountants failed to alert the roofing company that a company employee, whom the accountants had recommended and trained, was embezzling company funds. The company discovered the embezzlement on March 14, 2003, but did not sue the accountants until July 2, 2004, after the expiration of the one-year statute of limitations. The trial court, therefore, granted summary judgment in favor of the accountants.

[23] On appeal, the roofing company argued that it needed time to investigate whether the accountants’ negligence had facilitated the embezzlement. We rejected this argument and held that “the negligent failure to detect theft logically is discovered when the theft is discovered.” Id. at 356. Thus, once the company knew of the underlying wrongdoing, it possessed sufficient facts to be on notice that “some claim might exist against the Accountants.” Id.

[24] The same is true here. NMC was made aware of the allegations against Sloan on September 16, 2019, and was definitely aware of Sloan's manipulation of Ameribridge's financials on October 27, 2020, when Ameribridge's new controller uncovered the fraud and Ameribridge terminated Sloan. Pursuant to the holding in Bambi's Roofing, NMC's discovery of the underlying wrongdoing also placed NMC on notice of a possible negligence claim against Watermark. Because NMC did not file its complaint until December 9, 2021—more than one year later—its claim is time-barred under Indiana Code Section 25-2.1-15-2(1).

[25] NMC contends that Bambi's Roofing is distinguishable because the plaintiff there discovered “confirmed” embezzlement, whereas NMC possessed only Jones’ allegations until October 2020. But even if we consider October 27, 2020, as the date on which NMC discovered Sloan's misconduct, under Bambi's Roofing, NMC's discovery of this misconduct also placed it on notice of a possible negligence claim against Watermark, whose reviews had failed to detect that fraud. Like the plaintiff in Bambi's Roofing, who discovered the embezzlement on March 14, 2003, but did not file suit until July 2, 2004, NMC discovered the fraud on October 27, 2020, but did not file its complaint until December 9, 2021, outside the one-year statute of limitations.

[26] NMC, nevertheless, claims that questions involving the application of the discovery rule necessarily involve questions of fact that cannot be resolved on summary judgment. See, e.g., Lyons v. Richmond Cmty. Sch. Corp., 19 N.E.3d 254, 262 (Ind. 2014) (noting that “application of the discovery rule necessarily involves questions of fact”). But it is also well settled that, when the designated evidence is undisputed and supports only one reasonable inference, the question of discovery may be determined as a matter of law. In fact, Bambi's Roofing resolved the question of the discovery rule and the statute of limitations as a matter of law based on the undisputed evidence designated on summary judgment. 859 N.E.2d at 356. Here, the operative facts are not in dispute; indeed, NMC acknowledges that, no later than October 27, 2020, Ameribridge's new controller had uncovered Sloan's manipulation and terminated Sloan's employment as a result. Thus, there is no factual dispute for a jury to decide.⁵

[27] NMC further contends that Watermark passively concealed the fraud by failing to disclose Jones’ allegations to anyone but Sloan, which NMC claims was a breach of Watermark's duty under Section .51 of the Statements on Standards for Accounting and Review Services (“SSARS”)—the professional standards promulgated by the American Institute of CPAs. This “concealment,” NMC argues, tolls the limitations period. See Lyons, 19 N.E.3d at 261 (“[P]assive fraudulent concealment requires (1) a relationship between the parties such that the defendant has a duty to disclose the alleged wrongful act to the plaintiff and (2) a breach of that duty.”). Fraudulent concealment, whether active or passive, tolls the limitations period only until the plaintiff discovers, or in the exercise of reasonable diligence should have discovered, the facts giving rise to the claim. Id. at 260.

[28] The premise of any concealment theory is that the defendant's conduct prevented timely discovery. Here, however, NMC should have been aware of the possibility of Sloan's misconduct on September 16, 2019, and definitely would have discovered the fraud on its own no later than October 27, 2020, without any disclosure from Watermark. Whatever concealment NMC claims Watermark engaged in did not prevent NMC's discovery beyond that date, and any tolling ended on October 27, 2020, at the latest. Still, NMC did not file suit against Watermark until December 9, 2021, more than a year later.

[29] Because NMC's claim was time-barred, we need not address the other issues it presents regarding the effect of the Settlement Agreement entered into by Watermark and Ameribridge, or whether Watermark owed NMC a duty.

Conclusion

[30] NMC's claim against Watermark was not filed within the one-year statute of limitations contained in the Accountancy Act. Accordingly, we affirm the trial court's grant of summary judgment in favor of Watermark.

[31] Affirmed.

FOOTNOTES

1.   NMC was not a party to the receivership action, but the Steingart brothers were parties as guarantors.

2.   Subsection (2) is a statute of repose that contains no discovery rule, and under which a cause of action “must be filed within three years from the date that ‘service for which the suit is brought’ was performed.” Crowe, Chizek, & Co., 771 N.E.2d at 1207 (quoting I.C. § 25-2.1-15-2(2)). Because we hold that NMC's claims are barred by the statute of limitations, we need not address the parties’ arguments regarding the statute of repose found in subsection (2). The statute clearly states that an action must be commenced “by the earlier of” the one-year statute of limitations or the three-year statute of repose. I.C. § 25-2.1-15-2.

3.   Both parties refer to a “tolling agreement” that was executed on August 2, 2021. NMC claims that, under the tolling agreement, its complaint was timely filed. Watermark claims that the tolling agreement contained a provision that did not revive any claims that were already barred as of the date of execution of that agreement; thus, Watermark claims that NMC's complaint was still untimely because, it contends, NMC should have discovered any negligence no later than September 16, 2019, when all of the Steingart brothers were aware of Jones’ allegations regarding Sloan. We, however, have been unable to locate this tolling agreement in the record provided to us on appeal. NMC's citations to the record do not correspond to any tolling agreement in the appendices. And Watermark's quotation from the agreement is not supported by a citation to the record. Neither party asserts that this tolling agreement was designated as evidence in support of or in opposition to summary judgment. To the contrary, Watermark asserts that the tolling agreement is “confidential for purposes” of summary judgment. Appellee's Br. p. 42 n.9. We cannot consider matters not designated to the trial court. Gunderson, 90 N.E.3d at 1175. It is also the appellant's duty to provide an adequate record for review. Longest ex rel. Longest v. Sledge, 992 N.E.2d 221, 231 (Ind. Ct. App. 2013), trans. denied. And the parties’ references to the agreement in their briefs are not evidence. Hudson v. Hudson, 176 N.E.3d 464, 477 (Ind. Ct. App. 2021). Accordingly, we cannot consider this tolling agreement in our analysis.

4.   The “cookie account” was an accrued-expense account Sloan used to place miscellaneous adjustments off the profit-and-loss statement, masking the company's true profits and losses. Appellant's App. Vol. II p. 138.

5.   NMC argues that Watermark's issuance of a “clean” report of Ameribridge's financials on December 13, 2019, reassured NMC that nothing was amiss and, therefore, prevented the discovery of Sloan's misconduct. But by October 27, 2020, any reassurance Watermark's 2019 report might have provided had already been dispelled. Indeed, by that date Sloan's misconduct had already been uncovered, and Sloan was fired for his misconduct. This also put NMC on notice of a possible negligence claim against Watermark. See Bambi's Roofing, 859 N.E.2d at 356.

Tavitas, Chief Judge.

Weissmann, J., and Foley, J., concur