Binstock v. Tschider

• Decision Date: 04 September 1985
• Docket Number: No. 10895,10895
• Citation: 374 N.W.2d 81
• Parties: Anton BINSTOCK and Mildred Binstock, Plaintiffs and Appellants, v. Morris A. TSCHIDER, Defendant and Appellee, Sean Smith; the law firm of Tschider and Smith, P.A.; Thomas Disselhorst; Gerald Jukkala; and the law firm of Hjellum, Weiss, Nerison, Jukkala & Wright, Defendants. Civ.
• Court: North Dakota Supreme Court

Page 81

374 N.W.2d 81

Anton BINSTOCK and Mildred Binstock, Plaintiffs and Appellants, v. Morris A. TSCHIDER, Defendant and Appellee Sean Smith; the law firm of Tschider and Smith, P.A. Thomas Disselhorst; Gerald Jukkala; and the law firm of Hjellum, Weiss, Nerison, Jukkala & Wright, Defendants.

Civ. No. 10895.

Supreme Court of North Dakota.

Sept. 4, 1985.

Wold, Jacobs & Johnson, Minneapolis, Minn., for plaintiffs and appellants; argued by Keith D. Johnson, Minneapolis, Minn. Appearance by Peter B. Wold, Minneapolis, Minn.

Zuger & Bucklin, Bismarck, for defendant and appellee; argued by James S. Hill, Bismarck.

GIERKE, Justice.

Anton and Mildred Binstock [hereinafter singly and collectively referred to as Binstock] appeal from a district court summary judgment dismissing their action against Morris A. Tschider. We affirm.

In 1975, Binstock offered for sale through a realtor a 480-acre tract of land and a 151-acre tract of land. Dr. Ralph Kilzer ultimately purchased the 480-acre tract and secured an option until January 1982 to purchase the 151-acre tract. ¹ Tschider, an attorney, drafted all of the documents incidental to the transaction. ² Among those documents, which were executed in January 1976, were two earnest money contracts, a contract for deed, and an option agreement.

In September 1976, Binstock received in the mail from Tschider the completed sale documents. Binstock asserts that, when he then realized for the first time that the terms of the sale of the 480-acre tract included an option on the 151-acre tract, he informed Tschider and Kilzer that he did not agree to grant an option, after which he believed Kilzer would not exercise the option.

In December 1981, Kilzer exercised the option to purchase the 151-acre tract. When Binstock refused to grant possession, Tschider's law firm commenced an action on behalf of Kilzer for specific performance of the option and recovery of damages for lost rents resulting from Binstock's refusal of possession. Binstock asserted that he signed blank documents and that there was no option on the 151-acre tract. Tschider denied that any blank documents were signed and asserted that Binstock executed a fully-drafted option agreement. Tschider testified as a witness in the trial of the action, which resulted in a judgment granting Kilzer specific performance of the option agreement and damages for the reasonable rental value of the property for 1982. While no appeal was taken from that judgment, we affirmed the trial court's denial of Binstock's motion for a new trial in Kilzer v. Binstock, 339 N.W.2d 569 (N.D.1983).

After our decision was rendered in Kilzer v. Binstock, supra, Binstock commenced the present action against the defendant attorneys and law firms. With respect to Tschider, the complaint alleges, among other things, that: (1) Tschider was negligent in drafting the documents in the Kilzer-Binstock land transaction; (2) Tschider was negligent in commencing the action on behalf of Kilzer against Binstock; (3) Tschider was negligent in testifying at the trial of Kilzer's action against Binstock; and (4) the "conduct and activities of the Defendants ... were effected in willful disregard of and indifference to the rights of the Plaintiffs, showing oppression, fraud and malice." ³

Tschider filed a motion for summary judgment of dismissal on the grounds that Binstock's claims against him were barred by the doctrine of collateral estoppel because the issues raised in this action were decided in Kilzer v. Binstock, supra, and that action on Binstock's claims regarding the alleged negligent drafting of the documents involved in the Kilzer-Binstock land transaction in 1975 and 1976 was barred by the statute of limitations set forth in Sec. 28-01-18, N.D.C.C. Binstock opposed the motion on the grounds that: (1) the issues of whether or not an attorney-client relationship existed between Tschider and Binstock and whether or not Tschider negligently represented Binstock were not actually litigated and decided in the prior action; and (2) Binstock's cause of action regarding Tschider's negligent drafting of the earnest money contract and option agreement was not barred by Sec. 28-01-18, N.D.C.C., because the earliest date that Binstock was injured was when the option was exercised in December 1981. Binstock argued that the injury was the actual loss of the 151-acre tract through exercise of the option; that the exact date of injury was a question of fact; and that, in any event, the statute of limitations was tolled under either the "continuous representation rule" or the "concealment rule." The trial court granted the motion for summary judgment ⁴ and a judgment dismissing the action against Tschider was entered pursuant to the trial court's certification under Rule 54(b), N.D.R.Civ.P. Binstock has appealed from the judgment and asserted that the cause of action raises genuine issues of material fact rendering summary judgment inappropriate.

Summary judgment under Rule 56, N.D.R.Civ.P., should be granted only if, after taking the view of the evidence most favorable to the party against whom summary judgment is sought, it appears that there are no genuine issues as to material facts or conflicting inferences from the facts. Albers v. NoDak Racing Club, Inc., 256 N.W.2d 355 (N.D.1977). Our task on appeal from summary judgment is to determine:

"Did the information available to the trial court, when viewed in a light most favorable to the opposing party, preclude the existence of a genuine issue as to any material fact and entitle the moving party to summary judgment as a matter of law?" Johnson v. Haugland, 303 N.W.2d 533, 537 (N.D.1981).

Although the movant under Rule 56, N.D.R.Civ.P., has the burden of establishing that no genuine issue of material fact exists, when a motion for summary judgment is made and supported as provided in the rule, the adverse party must raise a genuine issue of material fact precluding summary judgment by setting forth specific facts showing that there is a genuine issue for trial. Albers v. NoDak Racing Club, Inc., supra; Johnson v. Community Development Corporation of Wahpeton, 222 N.W.2d 847 (N.D.1974). As we said in First Nat. Bank of Hettinger v. Clark, 332 N.W.2d 264, 267 (N.D.1983):

"A party resisting a motion for summary judgment has the responsibility of presenting competent admissible evidence by affidavit or other comparable means, NDRCivP 56(e); Spier v. Power Concrete, Inc., 304 N.W.2d 68 (N.D.1981); and, if appropriate, drawing the court's attention to evidence in the record by setting out the page and line in depositions or other comparable document containing testimony or evidence raising a material factual issue, or from which the court may draw an inference creating a material factual issue.

"In summary judgment proceedings the trial court has no legal obligation, judicial duty, or responsibility to search the record for evidence opposing the motion for summary judgment. This principle and legal concept applies equally well, or more so, to appellate proceedings involving an appeal from the granting of a summary judgment for the further reason that the appellate court, except for jurisdictional matters and taking judicial notice, generally considers only those issues raised in the trial court."

In determining when an action for legal malpractice is barred by the passage of time, we recently said in Wall v. Lewis, 366 N.W.2d 471, 473 (N.D.1985):

"The two-year statute of limitations under Section 28-01-18(3), NDCC, is applicable to an action brought against an attorney for professional malpractice. Johnson v. Haugland, 303 N.W.2d 533 (N.D.1981). The statute commences to run when,

'plaintiff knows, or with reasonable diligence should know, (1) of the injury, (2) its cause, and (3) defendant's possible negligence.'

Phillips Fur and Wool Co. v. Bailey, 340 N.W.2d 448, 449 (N.D.1983).

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"A cause of action for legal malpractice does not accrue, and the statute of limitations does not commence to run, until the client has incurred some damage. Luick v. Rademacher, 129 Mich.App. 803, 342 N.W.2d 617 (1983); Ameraccount Club, Inc. v. Hill, 617 S.W.2d 876 (Tenn.1981); Budd v. Nixen, 6 Cal.3d 195, 491 P.2d 433, 98 Cal.Rptr. 849 (1971). The proposition is succinctly stated by the California Supreme Court in Budd, supra:

'... until the client suffers appreciable harm as a consequence of his attorney's negligence, the client cannot establish a cause of action for malpractice....

'The cause of action arises, however, before the client sustains all, or even the greater part, of the damages occasioned by his attorney's negligence.... Any appreciable and actual harm flowing from the attorney's negligent conduct establishes a cause of action upon which the client may sue.' "

The trial court determined that there was no genuine issue of material fact as to whether or not Binstock's claims in regard to the drafting of the instruments for the Kilzer-Binstock land transaction were barred by Sec. 28-01-18(3), N.D.C.C. We agree.

Binstock testified by deposition that he had purchased the land for his son, Terry; that he found that he had signed the option when he received the Kilzer-Binstock land transaction documents in September 1976; that he thereafter told Tschider and Kilzer that he did not agree to the option; that as of September 1976 he knew that the option agreement existed and unless something was done the property could be taken away by exercise of the option; that he did not think the option would be exercised; that no one had given him any assurances that the option would not be exercised; that the existence of the document would cause him "problems"; that, while he and Terry had previously made improvements to the land, they did not make any major improvements to the property after September 1976 because they knew that the option might be exercised; and that as long as the option existed, he...