Hartford Acc. and Indem. Co. v. Rogers

• Decision Date: 11 July 1980
• Docket Number: No. 10563,10563
• Parties: HARTFORD ACCIDENT AND INDEMNITY COMPANY, Appellant, v. James E. ROGERS, Respondent.
• Court: Nevada Supreme Court

Page 1025

613 P.2d 1025

96 Nev. 576

HARTFORD ACCIDENT AND INDEMNITY COMPANY, Appellant, v. James E. ROGERS, Respondent.

No. 10563.

Supreme Court of Nevada.

July 11, 1980.

[96 Nev. 577] Wanderer & Wanderer, Douglas A. Watkins, Las Vegas, for appellant.

Dickerson, Miles & Pico and Bert O. Mitchell, Las Vegas, for respondent.

OPINION

MANOUKIAN, Justice:

In this appeal from a summary judgment in favor of defendant-respondent, we are required to decide whether the trial court erred in ruling that appellant's claims were barred by the statute of limitations. We hold that it did not, and affirm.

On September 21, 1968, Susan Saari and her brother, William Saari, Jr. had pulled off of Interstate 15, south of Las Vegas, on their way to Los Angeles. While the vehicle was on the side of the road, it was struck by a second vehicle. The driver of the second vehicle had been driving under the influence and was uninsured. William Jr. and his sister, Susan, who was seriously injured, resided in New York at the time. Subsequently, Susan and her brother signed a contingency fee agreement under which respondent Rogers, a licensed attorney in this state, was to represent them in connection with the accident in exchange for one-third of the amount recovered.

On September 27, the Las Vegas office of Hartford Accident and Indemnity, appellant herein, received notice of the accident, took a statement from William, Jr., and opened a file. An initial memorandum in that file indicated that Susan was being represented by respondent Rogers of Las Vegas. On October 4, William Saari, Sr. (Mr. Saari) retained attorney Frank J. Hand of New York to represent him and Susan in prosecuting their claims. Susan was released from the hospital on October 9. Attorney Hand filed an uninsured motorist claim with appellant Hartford at its New York office on October 11th. On December 2, Rogers sent a letter to appellant at its Las Vegas office advising them that he was representing Susan and that he was making a demand for the policy limit of $10,000. This information was also phoned to appellant at its Las Vegas office on January 7, 1969.

On December 16, 1968, Hartford's Las Vegas office sent a check to respondent in the amount of $1,837.25 which represented Susan's hospital bills through October 10. This check was made payable to Susan and respondent Rogers. It was endorsed and deposited in respondent's trust account without the benefit of Susan's signature. Thereafter, respondent made no payments to the hospital, but did request a bill reduction of fifty percent by the hospital.

In 1969, respondent Rogers was informed by Mr. Saari that his services were no longer required. Rogers indicated that he would take no further action but that he did expect to be paid for his services rendered to date. He said that he would return the check for $1,837.25, along with another check he had received for $240, upon his receipt of $2,000 as full payment for his services. By May 9, 1969, respondent, having heard nothing further, returned the $240 check to Hartford.

An internal report dated September 10, 1969 indicated that Hartford was aware that the checks issued by its Las Vegas office had not been applied by Rogers to satisfy the medical bills. Therefore, when Hartford and the Saaris arrived at a settlement for $9,750.00, Hartford deducted the $1,837.25, which Rogers held, and paid only $7,912.75 in January of 1970. Attorney Hand first asked Rogers to return the check in exchange for a fee of $787.50. When Rogers refused, Hand demanded payment from Hartford for the full amount.

Saari's subsequent suit against Hartford ended successfully for the Saaris on March 17, 1975. A New York supreme court ruled that Hartford could not assert prior payment as the check had been paid after Hartford became aware that different attorneys had filed claims and should have made an inquiry. The present action was filed by Hartford against Rogers on August 10, 1976. Respondent's motion for summary judgment, based on the statutes of limitation, was granted and this appeal followed.

Appellant's initial complaint filed on August 10, 1976 was based on conversion. That complaint was dismissed without prejudice. The statute of limitation for conversion is three years and runs from the time of taking. NRS 11.190(3)(c). The complaint was properly dismissed as the check was appropriated, if at all, by respondent on or about December 19, 1968 and no later than January 26, 1970 when attorney Hand demanded the check from respondent.

Appellant's amended complaint alleged, inter alia, fraud, breach of agency, breach of trust by a fiduciary under NRS 11.290, and violation of ethical standards. The district court determined that the statute of limitations barred these claims, that NRS 11.290 applies only to banks and trust companies, and that our attorney disciplinary rules do not create a private cause of action. In dismissing the amended complaint, the court determined that appellant was aware of all facts which may have constituted a fraud more than three years prior to the filing of the first complaint.

Appellant acknowledges that it was aware of all pertinent facts in this case by April 13, 1970. On that date, an interoffice memo was drafted by Hartford which set forth all of the relevant facts. Nevertheless, appellant argues that the statute of limitations begins to run only when damage is suffered. This damage, appellant states, occurred upon the March 17, 1975 judgment by the New York court as appellant believed until then that it could claim an offset against the Saaris. We disagree.

If indeed Rogers' acts constituted a fraud at the time the check was presented by appellant, see City of Coon Rapids v. Suburban Engineering, Inc., 283 Minn. 151, 167 N.W.2d 493, 496 (1969), then appellant sustained damage upon its parting with its money. Remus Films, Ltd. v. William Morris Agency, 244 Cal.App.2d 763, 53 Cal.Rptr. 526, 529 (Ct.App.1966). Cf. City of Abilene v. Bynum, 367 S.W.2d 942 (Tex.Civ.App.1963) (initial action by city lawful and no cause of action by plaintiff until subsequent damage). It does not matter here that appellant was not totally certain of its damages. Quinn v. Press, 135 Tex. 60, 140 S.W.2d 438, 440-41 (1940); American Indemnity Co. v. Ernst & Ernst, 106 S.W.2d 763, 765-66 (Tex.Civ.App.1937). See Webb v. Lewis, 133 Ga.App. 18, 209 S.E.2d 712 (1974). Nevada law clearly provides that the statute runs from the date of discovery of facts constituting the fraud and must be brought within three years. Howard v. Howard, 69 Nev. 12, 21-22, 239 P.2d 584, 588-89 (1952); NRS 11.190(3)(d). See Winn v. McCulloch...