Brady v. New Albertson's, Inc.

• Decision Date: 07 August 2014
• Docket Number: No. 61767.,61767.
• Citation: 130 Nev. Adv. Op. 68,333 P.3d 229
• Court: Nevada Supreme Court
• Parties: BRADY, VORWERCK, RYDER & CASPINO, Appellant, v. NEW ALBERTSON'S, INC., Respondent.

333 P.3d 229

130 Nev. Adv. Op. 68

BRADY, VORWERCK, RYDER & CASPINO, Appellant,

v.NEW ALBERTSON'S, INC., Respondent.

No. 61767.

Supreme Court of Nevada.

Aug. 7, 2014.

Certified question under NRAP 5 concerning whether the statute of limitations in NRS 11.207, as revised by the Nevada Legislature in 1997, is tolled against an action for attorney malpractice, pending the outcome of the underlying suit in which the malpractice allegedly occurred.¹ United States District Court of the District of Nevada; Gloria M. Navarro, Judge.

Question answered.

Lemons, Grundy & Eisenberg and Robert L. Eisenberg, Reno; Lipson, Neilson, Cole, Seltzer & Garin, P.C., and Joseph Garin and Kaleb D. Anderson, Las Vegas, for Appellant.

Prince & Keating, LLP, and Dennis M. Prince and Eric N. Tran, Las Vegas, for Respondent.

BEFORE THE COURT EN BANC.

OPINION

By the Court, SAITTA, J.:

Before it was amended in 1997, NRS 11.207(1) stated that an attorney malpractice action for damages may not “be commenced more than 4 years after the plaintiff sustains damage and discovers or through the use of reasonable diligence should have discovered the material facts which constitute the cause of action.” NRS 11.207(1) (1981), amended by 1997 Nev. Stat., ch. 184, § 2, at 478. To the pre–1997 version of NRS 11.207(1), Nevada caselaw applied the litigation malpractice tolling rule, which delays the commencement of a malpractice claim's statute of limitations until the end of the litigation in which the malpractice occurred. See, e.g., Clark v. Robison, 113 Nev. 949, 951, 944 P.2d 788, 789–90 (1997). Since being amended in 1997,²NRS 11.207(1) has imposed on attorney malpractice actions a four-year limitations period that begins “after the plaintiff sustains damage,” and a two-year statute of limitations that starts “after the plaintiff discovers or through the use of reasonable diligence should have discovered the material facts which constitute the cause of action, whichever occurs earlier.” As to NRS 11.207(1), the United States District Court for the District of Nevada has certified the following question to this court: “Whether the statute of limitations in NRS 11.207, as revised by the Nevada [L]egislature in 1997, is tolled against a cause of action for attorney malpracticepending the outcome of the underlying lawsuit in which the malpractice allegedly occurred.”

With respect to the two-year statute of limitations under NRS 11.207(1), we answer this question in the affirmative.³ After 1997, the amended statute retained the discovery rule language to which the litigation malpractice tolling rule has been applied in Nevada caselaw. See Clark, 113 Nev. at 951, 944 P.2d at 789–90 (applying the litigation malpractice tolling rule to the entirety of NRS 11.207, including the discovery rule language). And Nevada caselaw, while not explicitly addressing whether the tolling rule survived the statutory amendments, has continued to implicitly recognize the rule as good law under the amended statute. See Moon v. McDonald, Carano & Wilson L.L.P., 129 Nev. ––––, ––––, 306 P.3d 406, 407, 409 (2013) (indicating that the litigation malpractice tolling rule applies to the current version of NRS 11.207(1)); Hewitt v. Allen, 118 Nev. 216, 221, 43 P.3d 345, 347–48 (2002) (stating, albeit without citing to NRS 11.207(1), that the litigation malpractice tolling rule delays the accrual of a malpractice action “until the plaintiff knows, or should know, all the facts relevant to the foregoing elements and damage has been sustained” and that damages do not accrue “until the underlying legal action has been resolved”). Moreover, we maintain the rule because it permits the final resolution of the damages incurred during the litigation, including any changes on the appeal, thereby preventing judicial resources from being spent on a claim for damages that may be reduced or cured during litigation. See Hewitt, 118 Nev. at 221, 43 P.3d at 348 (providing, in the context of an appeal from the litigation in which the malpractice occurred, that the litigation malpractice tolling rule accounts for the possibility that the damages may disappear upon resolution of the appeal).

FACTS AND PROCEDURAL HISTORY

The federal court's certification order concerns purported litigation malpractice. This alleged malpractice occurred in the context of an attorney-client relationship between the appellant law firm Brady, Vorwerck, Ryder & Caspino (BVRC), its former and now deceased attorney W. Dennis Richardson, and their client Albertson's, Inc., which later became New Albertson's, Inc. ⁴

The facts, underlying litigation, and malpractice

New Albertson's and Farm Road Retail, LLC, entered into an agreement concerning the maintenance of a common area that they shared between them. The agreement provided that Farm Road would “indemnity [New] Albertson's from certain negative legal outcomes resulting from any breach of the [agreement] by Farm Road.” ⁵ A woman fell on a flight of stairs at the New Albertson's location to which the agreement applied. That woman and her husband (the claimants) filed suit against New Albertson's and Farm Road in a Nevada district court to recover the damages that she incurred when she fell. New Albertson's hired BVRC for legal representation, and it assigned its attorney, Richardson, to the case.

New Albertson's denied all liability in an answer to the complaint. It also filed a cross-claim “against Farm Road based on Farm Road's initial refusal to indemnify [New] Albertson's for the ... [c]omplaint and refusal to accept [New] Albertson's Tender of Defense.”

The claimants served New Albertson's with requests for admission. Richardson, the BVRC lawyer, “belatedly served the responses on behalf of [New] Albertson's.” Considering that New Albertson's responses were “untimely and allegedly deficient,” the claimants “filed a [m]otion to [c]ompel.” A discovery commissioner determined that New Albertson's responses were “ ‘frivolous and an insult to the court.’ ” The district court agreed, and it ordered New Albertson's to “re-file the responses,” which Richardson did.

After New Albertson's “re-file[d] the responses,” the claimants filed a motion for partial summary judgment “on the issue of liability, alleging that the ... [re-filed] [r]esponses filed by Richardson knowingly violated the [district] court's order.” The district court granted the motion, the result of which “established [New] Albertson's liability for the [claimants'] damages.” It appears that the district court deemed New Albertson's responses to the requests for admission as admitted because of BVRC and Richardson's discovery violations.

Subsequently, the claimants and New Albertson's entered into a settlement agreement on January 5, 2008. Following that settlement agreement, New Albertson's cross-claim against Farm Road remained. The district court granted summary judgment in favor of Farm Road with respect to that cross-claim. In so doing, the district court concluded in part that New Albertson's claims against Farm Road, including an indemnification claim, were “ ‘not viable ... because [New] Albertson[’]s settlement was the direct result of discovery abuses committed by [New] Albertson[s].' ”

New Albertson's appealed the district court's summary judgment determination to this court. But before this court could reach the appeal's merits, New Albertson's and Farm Road entered into a settlement agreement during a mandatory settlement conference in April 2009. As a result, this court issued an order that dismissed New Albertson's appeal in May 2009.

The attorney malpractice action before the federal district court

On January 22, 2010—over two years after New Albertson's settlement with the claimants, but less than two years after New Albertson's settlement with Farm Road and the dismissal of New Albertson's appeal—New Albertson's filed an attorney malpractice suit against BVRC and Richardson in a Nevada district court. At some point, the suit was removed to the United States District Court for the District of Nevada.

After answering the complaint, BVRC filed a motion for summary judgment, wherein it argued that the malpractice action was untimely filed after the expiration of NRS 11.207( l )'s two-year statute of limitations for attorney malpractice actions. BVRC asserted that, at the latest, NRS 11.207's two-year limitation period commenced on January 5, 2008, the date of New Albertson's settlement with the claimants. Accordingly, it contended that New Albertson's attorney malpractice action was untimely because it was filed over two years after that settlement.

The federal district court denied BVRC's motion upon concluding that NRS 11.207( l )'s two-year time limitation did not begin until May 27, 2009, the date that this court dismissed New Albertson's appeal that concerned its cross-claim. It concluded that New Albertson's action against BVRC was therefore timely.

Subsequently, BVRC filed a motion to certify a question to this court regarding NRS 11.207(1). BVRC argued that although this court stated in the past that NRS 11.207(1)'s limitations period does not commence for a malpractice action until the conclusion of the litigation in which the malpractice occurred, this tolling rule, often called the litigation malpractice tolling rule, existed before the 1997 amendments to NRS 11.207(1). BVRC maintained that the 1997 amendments rendered the litigation malpractice tolling rule obsolete. The federal district court granted the motion and issued an order that certified the question that we now answer.

DISCUSSION

BVRC contends that the litigation malpractice tolling rule no longer applies to NRS 11.207(1). It suggests that the rule was developed before the Legislature amended NRS 11.207(1) in 1997 and, thus, has no application to the current version of the statute. According to BVRC, the two-year statute of limitations in NRS 11.207(1) begins to run when a claimant has knowledge of any amount of...