Opinion
No. 60567-4-I.
August 4, 2008.
Appeal from a judgment of the Superior Court for Snohomish County, No. 07-2-02601-9, Anita L. Farris, J., entered August 10, 2007.
Affirmed by unpublished per curiam opinion.
Jonathan McClain and his parents, Charles and Arlene McClain, appeal the summary judgment dismissal of their legal malpractice claims against Allan Hall, who had previously defended Jonathan in a lawsuit. We conclude that summary judgment was proper because Jonathan's claims were barred by the applicable statute of limitations and Jonathan's parents lacked standing to bring such an action against their adult son's attorney. Accordingly, we affirm.
This action had its genesis in a $63,650 loan Jonathan received from a lending institution. The loan was not paid when due.
Singer Asset Finance Company LLC (Singer), as assignee of the loan, sued Jonathan for fraud and misrepresentation, breach of contract, conversion, unjust enrichment, and injunctive relief. Singer filed a motion for partial summary judgment together with a calendar note. The calendar note mistakenly indicated that the motion was set on the court commissioner's civil calendar rather than on the judge's civil calendar. The partial summary judgment motion was granted by the judge hearing the civil motions on June 19, 2001. No appeal was ever filed.
In December 2001, Hall agreed to represent Jonathan in an attempt to set aside the partial summary judgment. Hall was retained with a payment of $1,000 in cash. Another retainer agreement was signed by Jonathan on March 28, 2002. Jonathan agreed to pay a retainer of $5,000 to secure Hall's involvement in the matter. The terms of the payment were "$5,000 in cash or property (property of Mr. Hall's approval only) on or before March 31, 2002." Hall was paid $3,000 total in cash and received certain jewelry as collateral for the remaining amount due and owing.
On September 16, 2002, Hall on behalf of Jonathan filed a motion seeking relief from the partial summary judgment order entered against Jonathan. The motion was denied. Jonathan unsuccessfully appealed to this court. In affirming the denial of Jonathan's motion for relief from partial summary judgment, this court rejected the arguments raised on appeal that the judgment entered against Jonathan was void for lack of subject matter jurisdiction and that his due process rights were violated when he was not given notice that the motion had been transferred from the commissioner's calendar. As to the latter issue, this court specifically held:
Singer Asset Finance Company, L.L.C. v. McClain, noted at 118 Wn. App. 1032 (2003).
We agree that if McClain had appeared before the commissioner because of the erroneous calendar note, the default judgment against him would be voidable based on the calendaring mistake. Such a motion should have been brought within one year under CR 60(b)(1). McClain had a scheduled hearing before the court, of which he was personally served notice, and he failed to appear. McClain has presented no evidence that the mistake is what prevented him from appearing before the court at all. He cannot now, more than a year later, try to void the judgment because of a typographical error. He received due process when he received personal service of the hearing. He chose not to appear.
A flurry of letters between Hall and the McClains then ensued. On September 8, 2003, Hall mailed a letter to Jonathan and Charles stating that he would provide them with a copy of the adverse ruling. In that letter, Hall also advised Jonathan to appeal to the Washington Supreme Court and to contact him. Jonathan did neither.
On October 23, 2003, Hall sent another letter to Jonathan and Charles indicating, among other things,
Because I did not receive a response from you to my September 8, 2003 letter which asked you to let me know if you wanted to appeal the ruling, we did not appeal this case. The deadline for appeal ran on October 20, 2003.
In a letter dated November 7, 2003, Jonathan complained in some detail about the way the case was handled. Specifically, Jonathan wrote:
I feel that at least three rules of professional conduct have been violated by your actions. The specific rules are: 1.4, 1.3, and quite possibly 1.1. I also feel that this conduct is in violation of your own retainer agreement.
I am therefore requesting that all funds paid to you be returned along with the property being held as collateral for the remainder of the bill. I request that this be done within ten days of the receipt of this letter. At that time, I will decide if further action is warranted. Thank you for your attention to this matter.
Hall responded in a letter dated November 11, 2003. Hall reminded Jonathan about the discussions they had after Hall learned Charles had forged a superior court judge's signature on a document used to secure Jonathan's loan. Hall noted that Jonathan had elected not to use that fact as a possible basis for setting aside the partial summary judgment and that Hall had been forced to try to resolve the case without bringing up that issue. Hall withdrew from representation of Jonathan on January 23, 2004.
On March 30, 2006, Jonathan and his parents (the McClains) served this legal malpractice action on Hall. This suit was not filed in the superior court until February 20, 2007.
Hall moved for summary dismissal of the McClains' claims of legal malpractice. The McClains opposed the motions and simultaneously sought to amend their complaint to add a breach of contract claim and a claim under the Consumer Protection Act. In separate orders, the court summarily dismissed the claims of Jonathan and his parents. Finding that the motion to amend should have been set on the court commissioner's civil calendar rather than the judge's civil calendar, the court chose not to rule on that motion. This appeal followed.
STANDARD OF REVIEW
We review an order on summary judgment de novo, performing the same inquiry as the trial court. We consider the facts and reasonable inferences from the facts in the light most favorable to the nonmoving party. Summary judgment is appropriate where "the pleadings, affidavits, and depositions establish that there is no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law." "A motion for summary judgment based on a statute of limitations should be granted only if the record demonstrates that there is no genuine issue of material fact as to when the statutory period commenced." The burden is on the moving party to establish its right to judgment as a matter of law, but the opposing party may not rely on mere speculation and unsupported assertions.
Folsom v. Burger King, 135 Wn.2d 658, 663, 958 P.2d 301 (1998).
Reid v. Pierce County, 136 Wn.2d 195, 201, 961 P.2d 333 (1998).
Jones v. Allstate Ins. Co., 146 Wn.2d 291, 300-01, 45 P.3d 1068 (2002) (citing Lybbert v. Grant County, 141 Wn.2d 29, 34, 1 P.3d 1124 (2000)); CR 56(c).
Zaleck v. Everett Clinic, 60 Wn. App. 107, 110, 802 P.2d 826 (1991).
Higgins v. Stafford, 123 Wn.2d 160, 169, 866 P.2d 31 (1994); Grimwood v. Univ. of Puget Sound, Inc., 110 Wn.2d 355, 359-61, 753 P.2d 517 (1988).
DISCUSSION
Statute of Limitations
The McClains contend that the superior court erred when it granted Hall's motions for summary judgment. We disagree.
An action is generally commenced by the service of a summons and complaint or the filing of the complaint. But an action "shall not be deemed commenced for the purpose of tolling any statute of limitations except as provided in RCW 4.16.170."
RCW 4.16.170, the tentative commencement statute, provides:
For the purpose of tolling any statute of limitations an action shall be deemed commenced when the complaint is filed or summons is served whichever occurs first. If service has not been had on the defendant prior to the filing of the complaint, the plaintiff shall cause one or more of the defendants to be served personally, or commence service by publication within ninety days from the date of filing the complaint. If the action is commenced by service on one or more of the defendants or by publication, the plaintiff shall file the summons and complaint within ninety days from the date of service. If following service, the complaint is not so filed, or following filing, service is not so made, the action shall be deemed to not have been commenced for purposes of tolling the statute of limitations.
Thus, under RCW 4.16.170, either service or filing tentatively tolls the statute of limitations. If the second step — either service after filing or filing after service — does not occur within 90 days, the action is deemed not to have been commenced for purposes of tolling the statute of limitations.
The McClains' contention that the six-year statute of limitation applies to their claim for legal malpractice is without merit. In Washington, the statute of limitations for actions involving legal malpractice requires that they be commenced within three years. The cause of action accrues when the plaintiff has the right to seek legal relief. The discovery rule applies to legal malpractice actions. The cause of action accrues when the client discovers or, in the exercise of reasonable diligence, should have discovered the facts which give rise to the cause of action. In other words, the statute of limitations begins to run when "the plaintiff knew or should have known all of the essential elements of the cause of action, i.e., duty, breach, causation and damages."
RCW 4.16.080(3); Huff v. Roach, 125 Wn. App. 724, 729, 106 P.3d 268 (2005); Davis v. Davis Wright Tremaine, L.L.P., 103 Wn. App. 638, 655, 14 P.3d 146 (2000).
Janicki Logging Constr. Co., Inc. v. Schwabe, Williamson Wyatt, P.C., 109 Wn. App. 655, 659, 37 P.3d 309 (2001).
Davis, 103 Wn. App. at 648.
Peters v. Simmons, 87 Wn.2d 400, 406, 552 P.2d 1053 (1976); Davis, 103 Wn. App. at 655.
Gevaart v. Metco Constr., Inc., 111 Wn.2d 499, 501-02, 760 P.2d 348 (1988).
Once the facts are known, the statute of limitations begins to run. It is not essential that the plaintiff understand the legal significance of the facts.
[K]nowledge of the 'facts' comprising a cause of action for attorney malpractice is to be distinguished from knowledge that such conduct constitutes malpractice. . . . [T]he discovery rule does not require that the plaintiff know of the negligent character of the conduct alleged as the cause of his or her injury.
Richardson v. Denend, 59 Wn. App. 92, 97 n. 6, 795 P.2d 1192 (1990).
The McClains contend there is a genuine issue of disputed fact concerning the accrual date of their legal malpractice action that precludes summary judgment in this case. The McClains assert that Hall made seemingly inconsistent statements about whether he still possessed the jewelry used as collateral under the terms of the retainer agreement. Because of these "material misrepresentations of fact," the McClains argue, they were never able to accurately gauge the amount of the damages caused by Hall's alleged acts of legal malpractice. The McClains have not cited, nor has our research revealed, any statute or case which supports their argument. In any event, the statute of limitations is tolled only until an injury occurs and not until damages are actually realized.
Many of the McLains' other issues are also not supported by meaningful analysis or citation to relevant authority. We need not consider those issues. See Postema v. Pollution Control Hearings Bd., 142 Wn.2d 68, 123-24, 11 P.3d 726 (2000).
Huff, 125 Wn. App. at 730.
The McClains' action against Hall was tentatively commenced March 30, 2006, with the service of the summons and complaint upon Hall. We conclude the three-year statute of limitations began to run, at the latest, on January 24, 2004, when Hall withdrew from representing Jonathan. Even though the complaint was filed more than three years after that date, the McClains contend that the trial court should not have dismissed Jonathan's claims as time-barred. The McClains contend that the statute of limitations does not bar Jonathan's claims of legal malpractice because he declared bankruptcy on June 28, 2005. Relying on 11 U.S.C. § 362 and 11 U.S.C. § 108(a) of the Bankruptcy Act, the McClains argue that the statute of limitations had not yet run at the time the complaint was filed. We disagree.
Jonathan's bankruptcy was discharged on October 5, 2005. Nothing supports the McClains' assertion that Jonathan's bankruptcy lasted 227 days.
Section 108(a) provides that a trustee may bring an action that is part of the bankrupt estate within two years of the bankruptcy court order for relief, if the original statute of limitations governing the cause of action had not expired when the claimant filed the petition in bankruptcy.
Contrary to the McClains' argument, there is no tolling of a statute of limitations for an action commenced by the debtor individually. The automatic stay provision of 11 U.S.C. § 362 provides that the commencement or continuation of any legal proceeding against the debtor is automatically stayed by the filing of a petition in bankruptcy, until adjudication or dismissal of the petition. On its face, this section is unambiguous. It only tolls statute of limitations for commencing actions against the debtor. Likewise, 11 U.S.C. § 108(a) only tolls the statute of limitations with respect to the trustee, not the debtor. Nothing in the Bankruptcy Act tolls a debtor's cause of action against other parties. Hence, Jonathan's bankruptcy filing did not suspend the running of the statutory limitations period as to his legal malpractice claims against Hall. His claims of legal malpractice were properly dismissed as time-barred.
See Martin-Trigona v. Champion Federal Sav. Loan Ass'n, 892 F.2d 575, 577-78 (7th Cir. 1989); In re Berry Estates, Inc., 812 F.2d 67, 71 (2nd Cir. 1987); Ass'n of St. Croix Condominium Owners v. St. Croix Hotel Corp., 682 F.2d 446, 448 (3rd Cir. 1982).
Engine Rebuilders v. Seven Seas Import-Export Merc., 189 Mont. 236, 615 P.2d 871, 874 (1980).
We reject Hall's argument that, even if Jonathan's bankruptcy had tolled the running of the three-year statute of limitations, the legal malpractice suit was still barred. Using Hall's own calculations, the new expiration date would have been May 3, 2007. Under this scenario, service and filing both occurred within the statutory limitations period. It is well settled that an action remains valid if both service and filing occur before the statute of limitations expires, regardless of whether those steps were accomplished within 90 days of each other. Hansen v. Watson, 16 Wn. App. 891, 892-93, 559 P.2d 1375 (1977); Karl B. Tegland, 3A Washington Practice: Rules Practice CR 3 author's cmts. at 41 (5th ed. 2006).
Standing
The McClains also contend that the summary dismissal of the claims of Jonathan's parents was improper because "the court failed to identify the basis for granting [Hall's] motion." But the record clearly shows that their claims were dismissed because Hall did not owe them any recognized duty of care. Summary judgment on the standing issue was proper in light of Trask v. Butler. In that case, the Washington Supreme Court considered whether an attorney hired by the personal representative of an estate owes a duty of care to an estate beneficiary and developed a six-part balancing test to answer the question. Its test requires as a threshold an intent to benefit the nonclient.
Brief of Appellant at 29.
123 Wn.2d 835, 872 P.2d 1080 (1994).
Hetzel v. Parks, 93 Wn. App. 929, 936, 971 P.2d 115 (1999).
Here, as in Trask, Jonathan's parents are incidental, not intended beneficiaries of the attorney-client relationship between Hall and their adult son. Jonathan hired Hall to protect his own interests. While his parents might understandably have had more than a passing interest in the outcome of the Singer suit, the reason for the representation was to preserve Jonathan's assets. Summary judgment was proper.
The McClains argument that the Trask rationale has been "supersede[d]" by Hetzel is utterly frivolous. This court, in Hetzel, specifically weighed the Trask factors in finding that an attorney, by depositing into his trust account funds belonging to the client of another attorney, owed the other attorney's client a duty of care actionable in a suit for legal malpractice. 93 Wn. App. at 936-41.
Motion to Amend
Lastly, the McClains contend that the trial court erred when it failed to rule on their motion to amend the complaint. In choosing not to rule either way on the motion, the court stated that the motion to amend had been "improperly noted in this courtroom." The McClains in their briefing acknowledge that the motion had been noted in the "wrong" courtroom. Under Snohomish County Local Civil Rule 7(b)(1)(J)(1), motions to amend pleadings are to be noted for hearing on a court commissioner's civil calendar. The court in this case invited the McClains to bring their motion "in the proper forum." We find no reversible error.
June 29, 2007, Report of Proceedings at 44.
Brief of Appellant at 31.
June 29, 2007, Report of Proceedings at 45.
Affirmed.