E-Fab, Inc. v. Accountants, Inc. Services, 153 Cal. App. 4th 1308 (2007)

E-Fab designs and manufactures precision components and tools. When in 1996 E-Fab needed a temporary accountant, it contacted defendant Accountants, Inc. Services. Accountants represented to E-Fab that it had screened Vickie Hunt and had confirmed and verified her qualifications, credentials and accomplishments. From 1996 to 2003, Hunt embezzled approximately $1 million from E-Fab. After discovering the embezzlement, E-Fab contacted law enforcement, which informed E-Fab that Hunt had prior criminal convictions for theft and welfare fraud, that she had been incarcerated and had falsified her academic credentials — facts the agency had failed to uncover during its “screening process.” E-Fab filed suit against Accountants within two years of learning of Hunt’s criminal record from the police and, over the objection of Accountants, successfully invoked the “discovery rule,” contending it was unable to have made earlier discovery despite reasonable diligence: “Vickie Hunt appeared to be a competent and honest employee,” said E-Fab.