Burgett v. Flaherty, 82-456

• Decision Date: 19 May 1983
• Docket Number: No. 82-456,82-456
• Citation: 204 Mont. 169,663 P.2d 332,40 St.Rep. 748
• Parties: Lyle BURGETT, Plaintiff and Appellant, v. Patrick FLAHERTY, Defendant and Respondent.
• Court: Montana Supreme Court

Page 332

663 P.2d 332

204 Mont. 169

Lyle BURGETT, Plaintiff and Appellant, v. Patrick FLAHERTY, Defendant and Respondent.

No. 82-456.

Supreme Court of Montana.

Submitted on Briefs Feb. 17, 1983.

Decided May 19, 1983.

Brad L. Belke, Butte, for plaintiff and appellant.

Cresap S. McCracken, Great Falls, for defendant and respondent.

MORRISON, Justice.

The First Judicial District Court entered summary judgment in favor of Patrick Flaherty in a legal malpractice action brought by Lyle Burgett. Burgett appeals.

Burgett contends the District Court erred in concluding his claim for relief was barred by the statute of limitations and the doctrine of collateral estoppel.

The collateral estoppel issue need not be reached as the factual allegation to which it applied, malpractice based on entry of an "illegal" dissolution decree, is properly barred by Section 27-2-206, MCA. However, because the record reveals a triable issue of fact as to when Burgett knew about the allegedly unauthorized detention of his guns by Flaherty or their loss as a result of Flaherty's alleged negligence, we vacate the summary judgment order and remand this cause for a determination of the accrual date of Burgett's claim(s) for relief.

The allegations out of which this cause of action arose regard Flaherty's representation of Burgett in a dissolution proceeding. Burgett employed Flaherty after he was served with dissolution papers on August 15, 1978. At that time Burgett was in Warm Springs State Hospital awaiting mental evaluation for a pending criminal proceeding. On August 23, 1978 Flaherty appeared on Burgett's behalf before the Fifth Judicial District Court in a show cause hearing. According to court minutes, Flaherty told the court Burgett did not contest the dissolution but would contest property and child support issues. After hearing testimony from Deanne Burgett, the District Court granted dissolution of the marriage.

On October 11, 1978, the district court judge signed and filed a decree of dissolution back dated to August 23, 1978; jurisdiction over property and child support issues was retained by the court.

On January 3, 1979, the parties and their respective counsel, Flaherty and Russell A. LaVigne, met regarding property and child support matters. The meeting produced a property and child support agreement which was entered into by the parties on January 26, 1979. The agreement provided, in part, that five guns owned by Burgett would be placed in Flaherty's custody to be held "in trust" for a period of one year. The agreement further provided for appraisal of their properties in Whitehall and Butte and the eventual purchase of Burgett's equity therein by Deanne. On September 21, 1979, the District Court approved the agreement between the parties. Six months later the parties stipulated to sale of the Whitehall property. This was the last document whereon Flaherty's name appeared as counsel for Burgett. In subsequent proceedings to modify the dissolution decree, Brad Belke, counsel of record herein, represented Burgett.

The instant complaint, wherein Burgett claims damages for Flaherty's alleged failure to exercise due diligence and reasonable skill on behalf of his client during the rendition of his services in the dissolution matter, was filed on January 18, 1982. The malpractice action was premised on three acts, errors or omissions committed by Flaherty, including (1) that Flaherty stipulated to an "illegal" divorce decree on August 23, 1978, in violation of Section 40-4-105(3), MCA, and Burgett's express instructions to delay the dissolution proceeding pending his release from Warm Springs; (2) that Flaherty failed to return the five guns placed in his possession under the 1979 property settlement agreement, even though two court orders had been entered directing him to do so; and (3) that Flaherty attempted to purchase Burgett's property, then valued in excess of $20,000.00, from him for $500.00 and his outstanding bill.

Flaherty answered, denying allegations of professional negligence, and asserted, inter alia, the affirmative defenses of statute of limitations, based on Sections 27-2-206, 207, 211, MCA, and collateral estoppel. The District Court granted summary judgment in favor of Flaherty after reviewing the pleadings, affidavits, answers to interrogatories, and admissions on record. The court concluded that Section 27-2-206, MCA, barred Burgett's asserted malpractice claim, Section 27-2-207, MCA, barred the claim for conversion of the guns, and Section 27-2-211, MCA, barred the punitive damage aspect of the malpractice claim. Additionally, the District Court concluded that Burgett's "notion of damages flowing from an illegal divorce in August, 1978" previously had been presented to but rejected by the district court judge who presided over the dissolution proceeding.

Section 27-2-206, MCA, provides, in pertinent part, that:

"An action against an attorney ... based upon the person's alleged professional negligent act or for error or omission in the person's practice must be commenced within 3 years after the plaintiff discovers or through the use of reasonable diligence should have discovered the act, error, or omission, whichever occurs last, but in no case may the action be commenced after 10 years from the date of the act, error, or omission."

Burgett argues that there is a genuine issue of fact as to when he discovered Flaherty's alleged acts of malpractice, therefore, it was improper to enter summary judgment based on Section 27-2-206, MCA. Burgett maintains that discovery of Flaherty's alleged acts, errors or omissions constituting malpractice, did not occur until November, 1980, less than three years before the complaint was filed. Evidently that was when Burgett met with his present attorney and reviewed the circumstances of his case.

As a matter of law, what is critical in determining when a legal malpractice action accrues is knowledge of the facts essential to the cause of action, not knowledge of the legal theories upon which an action may be brought. McGee v. Weinberg (Cal.App.1979) 97 Cal.App.3d 798, 159 Cal.Rptr. 86.

California's statute of limitations for legal malpractice is not identical to Section 27-2-206, MCA, but for the purpose of the discovery argument advanced by Burgett, its interpretation by the California Court of Appeals is persuasive.

"The question here is whether appellant's alleged ignorance of her supposed rights against her former attorney is sufficient to toll the statute of limitations.

"The statute of...