Day on Torts - New Post: Legal malpractice claim failed based on statute of limitations.

Legal malpractice claim failed based on statute of limitations.

Posted: 28 Jan 2020 06:09 AM PST

Where plaintiffs knew that a Tennessee judgment had to be renewed when it was ten years old, had not spoken with an attorney at the firm who previously represented them, and had not received any bills or communications about a renewal of the judgment, plaintiffs’ legal malpractice claim filed three years after the judgments needed to be renewed was time-barred.

In Rozen v. Wolff Ardis, P.C., No. W2019-00396-COA-R3-CV (Tenn. Ct. App. Dec. 17, 2019), plaintiffs had been represented by defendant law firm in a 2003 case. In that case, plaintiffs were awarded judgments against two defendants who stole jewelry from plaintiffs’ business, but because those defendants were sent to prison, the judgments were not collected on at the time. When one of the two defendants filed for bankruptcy in 2006, defendant law firm represented plaintiffs to ensure that the judgment was not discharged. After that representation in 2006, plaintiffs “received a letter from Wolff Ardis stating that ‘this matter is completed’ and requesting that [plaintiffs] pay for the legal services performed for them.”

After 2006, plaintiff called defendant law firm about the judgments several times, and he spoke with a paralegal and a legal assistant. After one conversation, the legal assistant sent plaintiff an email that “in 2013 we will have to renew” and “[w]e will docket a reminder for this in our system for January of 2013.” The email stated that a calendar reminder was being sent to the lawyer who had previously represented plaintiffs, but that reminder was never received. By the time this legal malpractice suit was filed, the attorney who previously represented plaintiffs no longer worked at the firm.

2013 passed with no communication between plaintiffs and defendant, no work done by defendant law firm to renew the judgments, no bills sent by defendant law firm to plaintiffs, and no action by plaintiffs regarding the matter. Plaintiff first contacted the firm again in 2016 and indicated that he believed the judgments had been renewed. When the firm looked into the matter, it attempted to revive the judgments but was unsuccessful. The firm then emailed plaintiff to tell him that the judgments had not been renewed. This legal malpractice suit followed.

The trial court granted a motion for summary judgment for defendant, finding that the suit was barred by the one-year legal malpractice statute of limitations and that plaintiffs “failed to establish the existence of an attorney-client relationship.” The Court of Appeals affirmed dismissal based on the statute of limitations.

“The statute of limitations for legal malpractice is one year from when a cause of action accrued,” and the discovery rule determines when the cause accrues. (internal citations omitted). Here, there was no question that plaintiffs suffered a legally cognizable injury in 2013, so the issue was when plaintiffs “[knew] or should have known through the exercise of reasonable diligence that the injury occurred because of the defendant’s negligence or wrongful conduct.” (internal citation omitted).

After a bench trial, the trial court made several key credibility and fact findings. The trial court found defendant’s testimony credible and found that plaintiff and defendant had a “heated conversation about unpaid bills” in 2004 during which defendant told plaintiff it would not renew the judgments; that defendant sent plaintiffs a letter in 2008 stating that the legal representation was concluded; and that plaintiff had a conversation with an attorney from defendant firm in 2011 wherein the attorney stated that plaintiff “could contact any attorney he wanted to renew the judgment.” Further, the trial court did not find plaintiff’s testimony credible regarding his belief that “the attorney-client relationship was established by a call to a legal secretary.” The trial court also found that plaintiff had a sticky note on his calendar “reminding [plaintiff] to call Mr. Ardis” regarding renewal of the judgment. After reviewing these findings, the Court of Appeals stated that the “burden is therefore on [plaintiffs] to show that the evidence preponderates against the trial court’s findings.” (internal citation omitted).

Based on the facts as a whole in this case, the Court concluded that plaintiffs “had constructive knowledge of the injury that would result if the judgments were not renewed more than one year before they filed their lawsuit.” The Court reasoned:

By the time the injury occurred in 2013, [plaintiffs] were aware that the judgments would expire in 2013 if no affirmative intervention was taken to renew them. …Based on the reminder note created by [plaintiff], [plaintiffs] were also aware that they intended to retain counsel, either [defendant] or independent counsel, in order to renew the judgments in timely fashion. Indeed, [plaintiff] was so concerned with renewal of the judgments that he frequently contacted [defendant] to inquire about them. …However, [plaintiff] admittedly took no action whatsoever in 2013 or in the years immediately following. And then, although [plaintiffs] were regularly billed when [defendant] did work for them and expected to be billed for the renewal of the judgments, no bill was forthcoming following the expiration of the judgments. Despite this knowledge, once the date for expiration of the judgments passed, [plaintiffs] did not make any effort to investigate whether their judgments had in fact been renewed.

The Court stated that “[t]o become aware of facts that would place a reasonable person on notice of the injury stemming from malpractice, a client does not have to be aware of the malpractice itself, but instead of the facts that could lead him or her to discover that an injury had occurred.” (internal citation omitted). In such a case, “[k]knowledge of those facts can be sufficient to put a client on notice and start the clock for purposes of the statute of limitations.” The Court held that in this case, “the constellation of facts shows that [plaintiffs] should have known of their injury more than a year prior to the date they filed suit.” (internal citation omitted). The trial court’s ruling that the case was barred by the statute of limitations was thus affirmed.

This case was very fact specific and determined largely based on the trial court’s credibility findings. Nonetheless, it has some valuable discussion of when the statute of limitations for a legal malpractice suit begins to run, and lawyers should take note of its findings.