# Limitations Analysis — *Quarry Ridge Supply v. Fathom Data Services* **Bottom line:** The professional-negligence claim's adjusted deadline falls somewhere between **April 19, 2025** (untimely) and **May 10, 2025** (timely). The complaint was filed May 2, 2025 — inside that window. Everything turns on a single fact Fathom does not have: **the date Quarry Ridge actually received (or was told the contents of) the December 20, 2022 forensic report.** The contract claim is timely and the fraud claim is timely on this record, so a limitations motion cannot dispose of the case even at best. Do not move now; take targeted discovery on the delivery date first. --- ## 1. The September 14, 2022 email does not start discovery Under Rule 2, discovery requires facts connecting an **actual injury** to Fathom. The email negates both elements on its face: - **No actual injury known.** "We do not yet know whether records are actually gone." A totals mismatch is a symptom; the controller expressly disclaims knowledge of loss. - **No factual connection to Fathom.** The email offers two competing causes — "our import setup or Fathom's mapping" — and picks neither. Attributing the problem to Quarry Ridge's own configuration is at least as likely on the face of the document. This is Rule 2's "mere unsupported suspicion of a problem." It does not start the two-year clock. Fathom should not lead with this exhibit as an accrual date; asserting September 14, 2022 as discovery invites the court to reject the whole timeline as overreaching. **But preserve the constructive-discovery fallback.** The email does show Quarry Ridge was on inquiry notice as of September 14, 2022. Rule 1 covers what "through reasonable diligence should have been discovered." If discovery reveals that the forensic accountant was engaged in September or October 2022 and delivered interim findings, an oral briefing, or a draft in November or early December 2022, constructive discovery could land **before January 2, 2023** — which, as shown below, is the dispositive line. That is Fathom's second-best theory and it depends on the same document set. --- ## 2. Earliest and latest supported discovery dates | | Date | Evidentiary basis | Weakness | |---|---|---|---| | **Earliest** | **December 20, 2022** | Report date; Rule 3 makes a reliable report attributing loss to the defendant an ordinary trigger | Rule 3 keys the trigger to **receipt**, not the date on the cover. The produced copy has **no transmittal email, no download log, no received stamp.** Fathom cannot prove receipt on the report's own date. | | **Latest** | **January 10, 2023** | Board minutes: the board "reviewed the forensic report attributing the overwrite to Fathom and authorized a claim" | This is an admission of knowledge **no later than** January 10, 2023. It establishes an outer limit, not the actual date. | The report satisfies every element of discovery: actual injury (11,400 overwritten invoice lines), factual connection (Fathom's migration map "caused the loss"), and more than the required quantification ($2.4M). Rule 2 confirms that the absence of a final damages number or legal theory would not have mattered. So discovery occurred **on receipt of the report, somewhere in the 22-day window of December 20, 2022 through January 10, 2023.** --- ## 3. The two-year deadline at both ends - Discovery December 20, 2022 → **December 20, 2024** - Discovery January 10, 2023 → **January 10, 2025** --- ## 4. Effect of the 120-day tolling agreement The agreement suspends any period "still unexpired on November 1, 2024" for 120 calendar days and does not revive expired claims (Rule 6, Exhibit 4). **Both candidate deadlines were unexpired on November 1, 2024** (December 20, 2024 and January 10, 2025 both postdate November 1, 2024). So the tolling agreement operates at *both* ends of the range, and the non-revival clause is inoperative as to negligence. Fathom gets no benefit from Rule 6's second sentence. Under Rule 7, add 120 days to the original deadline: - **December 20, 2024 + 120 days = April 19, 2025.** Complaint filed May 2, 2025 → **13 days late.** - **January 10, 2025 + 120 days = May 10, 2025.** Complaint filed May 2, 2025 → **8 days early, timely.** Note two traps. First, the agreement's **February 28, 2025 expiration is irrelevant** to the deadline; Rule 7 adds the suspended days to the original deadline, which can (and here does) produce an adjusted deadline months after the agreement lapsed. Do not argue that filing had to occur by February 28, 2025. Second, under Rule 7, **filing on the adjusted deadline is timely** — there is no one-day cushion to be harvested. --- ## 5. The pivot date: January 2, 2023 Work backward from the filing date. May 2, 2025 minus 120 tolled days = **January 2, 2025**. For the complaint to be timely, the original two-year deadline must be January 2, 2025 or later, which requires discovery on or after **January 2, 2023**. | Report received | Original deadline | +120 days | May 2, 2025 filing | |---|---|---|---| | Dec 20, 2022 | Dec 20, 2024 | Apr 19, 2025 | Untimely (13 days) | | Dec 31, 2022 | Dec 31, 2024 | Apr 30, 2025 | Untimely (2 days) | | **Jan 1, 2023** | **Jan 1, 2025** | **May 1, 2025** | **Untimely by 1 day** | | **Jan 2, 2023** | **Jan 2, 2025** | **May 2, 2025** | **Timely (filed on adjusted deadline)** | | Jan 10, 2023 | Jan 10, 2025 | May 10, 2025 | Timely | **The claim flips from untimely to timely at a delivery date of January 2, 2023.** Receipt on or before January 1, 2023 defeats the negligence claim; receipt on or after January 2, 2023 saves it. This is why opposing counsel's "after the holidays" characterization is dangerous rather than vague. "After the holidays" in ordinary usage means on or after January 2, 2023 — precisely the timely side of the line. Fathom must assume Quarry Ridge will produce a transmittal email dated January 3–9, 2023 and that the negligence claim will survive. --- ## 6. Contract claim — timely, and not worth attacking Rule 4: four years from breach, **regardless of later discovery.** Alleged breach August 15, 2021 → deadline **August 15, 2025.** Filed May 2, 2025 — timely by more than three months. Tolling is unnecessary (and would extend the deadline to December 13, 2025 in any event). No limitations defense exists here. **Strategic consequence:** even a total win on negligence leaves Quarry Ridge a live contract claim arising from the same migration and, likely, seeking the same $2.4 million. A limitations motion is therefore **not case-dispositive** and its value is limited to (a) eliminating any tort-only damages, fee-shifting, or standard-of-care expert exposure, and (b) narrowing the case. Price the motion accordingly. --- ## 7. Fraud claim — timely on the present record Rule 5: three years from discovery of facts constituting the fraud. To be untimely, discovery must predate **May 2, 2022.** Nothing in the record does: - The earliest document is the September 14, 2022 email — after the cutoff, and in any event Rule 5 requires "facts indicating **falsity** rather than mere error." The email treats the mismatch as a possible setup or mapping error and is consistent with Fathom's "temporary" characterization. - Even taking September 14, 2022 as fraud discovery: deadline September 14, 2025 → timely. - Taking December 20, 2022 (the first date Quarry Ridge held facts showing the loss was *permanent* and therefore that the "temporary" assurances were arguably false): deadline December 20, 2025 → timely. Under any supported date the fraud claim is timely, and no fraud period expired before November 1, 2024, so the non-revival clause never engages. **Attack the fraud claim on the merits and on pleading particularity — a contrary assurance later shown to be wrong is error, not proven falsity, and Exhibit 5 pleads no scienter facts — not on limitations.** --- ## 8. The missing fact and the evidence to demand **The one fact Fathom must obtain before deciding: the exact date Quarry Ridge received the December 20, 2022 forensic report, or otherwise learned its findings.** Nothing else in the analysis is genuinely contested. Demand, in this order: **From the forensic accountant (third-party subpoena — the most reliable source, and one Quarry Ridge does not control):** 1. Transmittal email, cover letter, or portal notification with date stamp, and any delivery/read receipt. 2. Portal access and download logs; file metadata (creation, last-modified, first-access timestamps) for the delivered PDF. 3. The engagement letter and all **invoices and time entries** — billing narratives routinely date "delivered report," "presented findings to management," "call with controller." 4. All **drafts, interim memoranda, and preliminary findings**, plus calendar entries and notes of any oral briefing. This is the constructive-discovery / earlier-actual-notice path: an oral briefing or draft on, say, December 12, 2022 could itself be the discovery event under Rules 1–3. 5. A custodian declaration or short deposition authenticating the delivery date. **From Quarry Ridge:** 6. Interrogatory: state the exact date and manner of receipt of the report and identify each person who received it. 7. Request for admission: "Quarry Ridge received the forensic report on or before January 1, 2023." 8. RFP: all internal communications about the report, the mismatch, or Fathom from September 1, 2022 through January 31, 2023 — including the controller's and CFO's email, the board packet and its distribution date, and any earlier draft circulated. 9. The date the forensic accountant was engaged and the date outside counsel was retained (dates are not privileged). 10. Insurance notices, reserve or loss memoranda, internal accounting write-offs of the $2.4 million, and any demand letter to Fathom — all of which are commonly dated within the critical window. 11. Deposition of the controller (author of Exhibit 1) and the board secretary who prepared Exhibit 3. **From Fathom's own files:** the pre-agreement tolling correspondence, in which Quarry Ridge's counsel may have already dated the report's receipt. --- ## 9. Recommended course: targeted discovery now, motion only if the date lands before January 2, 2023 **Do not move for judgment now.** Under Rule 8, Fathom bears the initial burden of establishing **apparent** untimeliness. It cannot carry that burden today: - The only document supporting the early end of the range is a report bearing a date, with **no proof of receipt** — and Rule 3 keys the trigger to receipt. - The best-authenticated knowledge document, Exhibit 3, supports **January 10, 2023**, the timely end of the range. - Quarry Ridge's own representation ("after the holidays") points to the timely side of the January 2 line. Filing now would fail on Fathom's own burden, would never shift the burden to Quarry Ridge under Rule 8, and would prompt Quarry Ridge to cure the record gap on its terms while Fathom loses the element of surprise on a 13-day margin. **Concrete plan:** 1. **Preserve the defense.** Plead limitations affirmatively as to negligence and fraud in the answer; the contract claim needs no such plea. 2. **Serve the third-party subpoena on the forensic accountant immediately**, before Quarry Ridge's counsel coordinates the narrative. Serve the interrogatory, RFA, and RFPs simultaneously. 3. **Do not stipulate to any discovery date, and do not accept a "for purposes of this motion, assume December 20" framing** — that concession is worthless without receipt proof and will look like overreach. 4. **Decision rule after discovery:** - **Receipt (or oral briefing/draft delivery) on or before January 1, 2023** → move for partial summary judgment on the negligence claim, showing the adjusted deadline of April 19–May 1, 2025 and a May 2, 2025 filing. The burden then shifts to Quarry Ridge under Rule 8 to prove later discovery or additional tolling. - **Receipt on or after January 2, 2023** → the negligence claim is timely. Abandon the limitations motion, redirect to (a) causation and the competing "our import setup" cause admitted in Exhibit 1, (b) dismissal of the fraud claim for failure to plead falsity and scienter under Rule 5's error/falsity distinction, and (c) contractual limitation-of-liability and damages defenses against the $2.4 million figure. - **Delivery date genuinely unascertainable** → still no motion. An unprovable receipt date is a failure of *Fathom's* initial burden, not Quarry Ridge's. Consider instead a narrow motion or trial issue on constructive discovery from the September 14, 2022 inquiry notice plus the engagement timeline — a weaker theory that should be reserved rather than spent early. 5. **Throughout, discount the value of winning.** Because the contract claim runs to August 15, 2025 and captures the same $2.4 million, the limitations motion narrows rather than ends the case. Budget it as a claim-reduction motion, and confirm before filing that eliminating the tort claim actually removes exposure — chiefly any tort-only damages, fee or punitive exposure, and the professional-standard-of-care expert battle.