Basic Food Industries, Inc. v. Travis, Warren, Nayer and Burgoyne

• Decision Date: 24 April 1975
• Docket Number: No. 1,Docket No. 18900,1
• Citation: 231 N.W.2d 466,60 Mich.App. 492
• Parties: BASIC FOOD INDUSTRIES, INC., a Delaware Corporation, Plaintiff-Appellee, v. TRAVIS, WARREN, NAYER & BURGOYNE, a Michigan co-partnership, and David L. Kaufman, jointly and severally, Defendants-Appellants
• Court: Court of Appeal of Michigan — District of US

Page 466

231 N.W.2d 466

60 Mich.App. 492

BASIC FOOD INDUSTRIES, INC., a Delaware Corporation, Plaintiff-Appellee, v. TRAVIS, WARREN, NAYER & BURGOYNE, a Michigan co-partnership, and David L. Kaufman, jointly and severally,

Defendants-Appellants.

Docket No. 18900.

Court of Appeals of Michigan, Division No. 1.

April 24, 1975.

Released for Publication July 24, 1975.

Miller, Klimist, Cohen, Martens & Sugerman, P.C., Detroit, by Bruce A. Miller, Plunkett, Cooney, Rutt, Watters, Stanczyk & Pedersen, by Charles T. McGorisk, Detroit, for defendant-appellant.

Leo Papp, Detroit, for plaintiff-appellee.

Before BRONSON, P.J., and McGREGOR and CARLAND, ^* JJ.

McGREGOR, Judge.

On October 6, 1972, plaintiff commenced this action against defendants, alleging attorney malpractice with respect to work performed during 1970. Defendants responded by moving for accelerated judgment, asserting that the claim was barred by the statute of limitations. The trial court denied this motion, ruling that the statute of limitations was inapplicable in this action; defendants filed a motion for rehearing of the denial which was also denied. Defendants bring this appeal on the denials upon leave granted by this Court.

Defendant attorneys were retained by plaintiff for the purpose of filing suit in plaintiff's behalf in another case in Wayne County Circuit Court. Early in August, 1970, defendants tendered a bill to the plaintiff for their fee in that matter; there was disagreement over this bill and, on August 16, 1970, the president of the plaintiff corporation offered to compromise the bill. At some time between August 19, 1970 and September 16, 1970, plaintiff's president stated, 'After we got the bill from Mr. Kaufman, I told him to do no further work'. On September 30, 1970, defendant attorneys filed a petition for withdrawal, of which a copy was sent by certified mail to Mr. Applestein, president of plaintiff corporation. The order of withdrawal was signed in Wayne County Circuit Court on October 9, 1970.

This Court is presented with the question of whether the trial court erred, in this attorney malpractice action, in ruling that the statute of limitations runs from the date of the court's order allowing the withdrawal of defendant attorneys, or from an earlier date, to wit: when the client discharges the attorney.

Defendants contend that the 'last treatment' rule, as embodied in M.C.L.A. § 600.5838; M.S.A. § 27A.5838, applies to this action; they contend that, because they concluded their representation of plaintiff prior to October 6, 1970, the 2-year statute of limitations is applicable, since the suit was not filed by plaintiff until October 6, 1972. The date of the order of withdrawal, signed by the trial court on October 9, 1970, is not the date on which the statute should toll. No professional services were rendered by the defendant attorneys to the plaintiff during the 2-year period immediately preceding the filing of the complaint in this action.

Defendants argue that there is a viable and sufficient distinction between 'serving' and 'having a duty to serve'. M.C.L.A. § 600.5838; M.S.A. § 27A.5838 does not contemplate a 'duty to serve', but, rather, contemplates the active conduct of 'serving'. Defendants' services to the plaintiff included 'research', 'counselling the commencement of litigation', and 'pursuing litigation' and were all rendered well before the presentation of their bill on August 19, 1970--at the latest, some time prior to their petition for withdrawal, on September 30, 1970.

Plaintiff maintains that the 2-year malpractice statute of limitations does not apply here, contending that the regular statute of limitations on negligence actions is applicable, which provides for a 3-year limitation on tort actions not specified otherwise.

The problem is which date should control for the purpose of the tolling of the statute of limitations: the date when a client relieves his attorney of his professional obligation, or the date when the court officially issues an order for such relief. This Court can find no authority for assistance in resolving this question.

M.C.L.A. § 600.2912; M.S.A. § 27A.2912 provides for a civil action for malpractice against persons holding themselves out to be members of a state licensed profession. M.C.L.A. § 600.5805(3); M.S.A. § 27A.5805(3) provides that the statute of limitations in such an action is 2 years. M.C.L.A. § 600.5838; M.S.A. § 27A.5838 governs when that action begins to run, by specifying that:

'A claim based on the malpractice of a person who is, or holds himself out to be, a member of a state licensed profession accrues at the time that person Discontinues treating or otherwise serving the plaintiff in a professional or pseudo-professional capacity as to the matters out of which the claim for malpractice arose.' (Emphasis added.)

The Michigan Supreme Court has held:

'(A)n action based on malpractice by a state licensed person must be brought within two years of the time when such person discontinues treating or otherwise serving the plaintiff, or within two years of the time when the plaintiff discovers, or in the exercise of reasonable diligence should have discovered, the asserted malpractice, whichever is later.' Dyke v. Richard, 390 Mich. 739, 747, 213 N.W.2d 185, 188 (1973). See also De Haan v. Winter, 258 Mich. 293, 241 N.W. 923 (1932).

M.C.L.A. § 600.5855; M.S.A. § 27A.5855 provides:

'If a person who is or may be liable for any claim fraudulently conceals the existence of the claim or the identity of any person who is liable for the claim from the knowledge of the person entitled to sue on the claim, the action may be commenced at any time within 2 years after the person who is entitled to bring the action discovers, or should have discovered, the existence of the claim or the identity of the person who is liable for the claim, although the action would otherwise be barred by the period of limitations.'

The crux of our deliberations must be the definition of the phrase...