1-402.
Liability for professional negligence; restrictions.
No person, proprietorship, partnership or registered firm authorized to practice as a certified public accountant pursuant to article 3 of chapter 1 of the Kansas Statutes Annotated, or any employee, agent, partner, officer, shareholder or member thereof, shall be liable to any person or entity for civil damages resulting from acts, omissions, decisions or other conduct amounting to negligence in the rendition of professional accounting services unless:
(a) The plaintiff directly engaged such person, proprietorship or registered firm to perform the professional accounting services; or
(b) (1) the defendant knew at the time of the engagement or the defendant and the client mutually agreed after the time of the engagement that the professional accounting services rendered the client would be made available to the plaintiff, who was identified in writing to the defendant; and (2) the defendant knew that the plaintiff intended to rely upon the professional accounting services rendered the client in connection with specified transactions described in writing.
History:
L. 1987, ch. 1, § 1; L. 1995, ch. 152, § 11; July 1.
Notes of Decisions
Cited in
10
cases (
1 in the last 5 years), 1990–2023 · leading case:
Gillespie v. Seymour, 796 P.2d 1060 (Kan. Ct. App. 1990).
Gillespie v. Seymour, 796 P.2d 1060 (Kan. Ct. App. 1990).
· cites it 10× “The court concluded K.S.A. 1989 Supp. 1-402 and the common law embodied in the Kansas cases requires dismissal of the Beneficiaries’ claims against the Accountants.”
First State Bank v. Daniel & Assocs., PC, 519 F. Supp. 2d 1157 (D. Kan. 2007).
· cites it 8× “Standing In Daniel & Associates’ initial motion for summary judgment, it argued that it was entitled to summary judgment on the grounds that the bank lacked standing to bring this third party accounting malpractice claim because of the liability restrictions for accountants set…”
Gillespie v. Seymour, 876 P.2d 193 (Kan. Ct. App. 1994).
· cites it 2× “We point out that in Gillespie, this court held that all other claims which could have been based on Burdge’s action, or inaction, are barred by K.S.A. 1-402. That statute limits a certified public accountant’s (CPA) liability for negligence.”
Kohala Agric. v. Deloitte & Touche, 949 P.2d 141 (Haw. App. 1997).
“In addition to the three doctrines applied by courts, several variations of these doctrines have been codified in six states to define the boundaries of an accountant's professional liability.”
First State Bank v. Daniel & Assocs., PC, 478 F. Supp. 2d 1279 (D. Kan. 2007).
· cites it 3× “§ 1-402. This statute, however, unambiguously applies only to a person, proprietorship, partnership, or registered firm “authorized to practice as a certified public accountant pursuant to article 3 of chapter 1 of the Kansas Statutes Annotated.”
Monarch Normandy Square Partners v. Normandy Square Assocs. Ltd. P'ship, 817 F. Supp. 899 (D. Kan. 1993).
“Even if HMF owed the plaintiffs a duty, plaintiffs’ negligence claim would be barred by K.S.A. 1-402, which provides: No person, proprietorship, partnership, professional corporation or association authorized to practice as a certified public accountant pursuant to article 3 of…”
TBG, INC. v. Bendis, 841 F. Supp. 1538 (D. Kan. 1993).
· cites it 2× “The Kansas legislature codified similar requirements in Kan.Stat.Ann. § 1-402 (1987). An action for negligent accounting services is prohibited unless the accountant: 1) knew that the reports produced by the accountant would be made available to the plaintiff (who was identified…”
Sparks v. CBIZ Acct., Tax & Advisory of Kansas City, Inc., 142 P.3d 749 (Kan. Ct. App. 2006).
· cites it 3× “CBIZ contends: (1) the close corporation exception recognized in Richards applies only when an existing minority shareholder files suit against a majority shareholder for breach of a fiduciary duty, and (2) the plaintiff did not directly engage CBIZ to perform professional…”
Coates v. Reichert, No. 2:22-cv-02411 (D. Kan. Apr. 25, 2023).
· cites it 4× “for civil damages resulting from acts, omissions, decisions or other conduct amounting to negligence in the rendition of professional accounting services unless: (a) [t]he plaintiff directly engaged such person .”
K.S.A. § 1-402(b)(1): 1 case
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