Higa v. Mirikitani

• Decision Date: 11 December 1973
• Docket Number: No. 5363,5363
• Citation: 517 P.2d 1,55 Haw. 167
• Parties: Mitsuru HIGAPlaintiff-Appellant, v. Percy K. MIRIKITANIDefendant-Appellee, and David E. Namaka, Defendant.
• Court: Hawaii Supreme Court

Page 1

517 P.2d 1

55 Haw. 167

Mitsuru HIGAPlaintiff-Appellant, v. Percy K. MIRIKITANIDefendant-Appellee and David E. Namaka, Defendant.

No. 5363.

Supreme Court of Hawai'i.

Dec.11, 1973.

Rehearing Denied Dec. 27, 1973.

Syllabus by the Court

1. A claim of injury to a client's close in action resulting from an attorney's malpractice is actionable under theories which are an amalgam of both tort and contract, and regardless of the nomenclature used by the plaintiff in a legal malpractice suit, all such actions should be governed by the same statute of limitations.

2. The applicable statute of limitations in legal malpractice cases is HRS § 657-1(1), which prescribes a six-year limitations period for '(a)ctions for the recovery of any debt founded upon any contract, obligation, or liability.'

Paul Maki, Honolulu, for plaintiff-appel-lant.

Arthur S. K. Fong, Honolulu, for defendant-appellee.

Before RICHARDSON, C. J., and MARUMOTO, ABE, LEVINSON and KOBAYASHI, JJ.

LEVINSON, Justice.

On January 1, 1964, the plaintiff-appellant sustained bodily injuries in an automobile accident allegedly caused by the negligence of Yoshiro Kuroki, the driver of the car in which the plaintiff was a passenger. Kuroki was killed in the collision, and within approximately one month thereafter, or in March 1964, as the defendant-appellee claims, the plaintiff secured the legal services of the defendant, an attorney licensed to practice law in this state, with the mutual understanding that the defendant would undertake the prosecution of the plaintiff's claim against Kuroki's estate. Although cognizant from the outset that the alleged tortfeasor was dead, the defendant failed to initiate legal action against the estate until December 10, 1965, more than eighteen months after May 2, 1964, the date of the first publication of notice to creditors by Kuroki's administrator pursuant to RLH 1955, § 317-23 (now HRS § 531-23).

The estate filed an answer to the plaintiff's complaint on January 3, 1966, followed by an amended answer on January 17. Both pleadings alleged as a defense that the plaintiff's claim was barred because not submitted within four months of the date of the first publication of notice to creditors, as required by RLH 1955, § 246-5 (as amended, now HRS § 663-6) & § 317-23 (now HRS § 531-23). Although thus made aware that the estate was asserting the statute of limitations as a defense, the defendant allegedly represented to the plaintiff on numerous occasions 'up to and including May or June, 1967' that the claim was proceeding normally and eventually would be tried on the merits. Dissatisfied with the treatment of his case, however, the plaintiff employed a different attorney in May or June of 1967, who advised that the defense of the statute of limitations interposed by the estate was meritorious. As a result, the plaintiff was forced to compromise his claim (allegedly worth $50,000) for $2,500.

More than three years later, on August 11, 1970, the plaintiff filed the present action alleging that the defendant's failure to make a timely assertion of the claim constituted professional malpractice in violation of his duty of care to the plaintiff and also in breach of the implied contract between them. In a decision and order dated July 28, 1972, the trial court granted the defendant's motion for summary judgment on the ground that the claim was barred by the two-year statute of limitations for 'damage to persons or property,' HRS § 657-7. ¹ The judgment, also dated July 28, 1972, was entered on August 7, 1972.

From the judgment dismissing his complaint the plaintiff now appeals to this court, urging as error the following points: (1) the trial court erred in applying HRS § 657-7 to the facts of this case and should have applied either the six-year statute of limitations for actions of a contractual nature contained in HRS § 657-1(1), ² or the four-year statute for personal actions 'not specifically covered' elsewhere, provided in HRS § 657-12 ³ (now deleted by SLH 1972 ch. 105, § 1(q), and made a part of the six-year statute of limitations in HRS § 657-1 by SLH 1972 ch. 105, § 1(a)), (2) the trial court erred in dismissing the complaint in the face of a genuine question of fact on the issue of whether the defendant fraudulently concealed the existence of a claim against him, thereby tolling the statute of limitations until the plaintiff discovered that he had a claim entitling him to relief, and extending the period within which he could sue to six years thereafter as provided by HRS § 657-20 ⁴ (now amended by SLH 1972 ch. 105, § 1(l), and (3) the trial court, if it had applied the proper statute of limitations, should have granted the plaintiff's motion for summary judgment on the issue of the defendant's liability.

I. THE APPLICABLE STATUTE OF LIMITATIONS

The trial court concluded that the relevant limitations period in actions of this nature was two years, as set out in HRS § 657-7. Virtually all cases having occasion to construe that section have done so in the context of claims for damages resulting from physical injury to persons or physical injury to tangible interests in property. ⁵ For example, in Yoshizaki v. Hilo Hospital, 50 Haw. 1, 427 P.2d 845 (1967), overruled on reh. on other grounds, 50 Haw. 150, 433 P.2d 220 (1967), we held that section applicable to a malpractice claim for bodily injury arising out of negligent medical treatment.

On the other hand, this claim, as well as virtually all ciaims for legal malpractice, concerns a non-physical injury to an intangible interest of the plaintiff-herein the forfeiture through an attorney's alleged neglect of a client's chose in action. ⁶ See Neel v. Magana, Olney, Levy, Cathcart & Gelfand, 6 Cal.3d 176, 182, 98 Cal.Rptr. 837, 840, 491 P.2d 421, 424 (1971). As such, however, a claim for legal malpractice is not unlike other actions where the interests protected are intangible in nature and where the tort limitations period for 'damages to person' in HRS § 657-7 seemingly apply. E. g., actions for invasion of privacy or malicious prosecution. Unlike these torts, however, the act of legal malpractice generally arises out of a contractual relationship between the parties, and hence, in pleading at least, may often be made to appear as a breach of contract. Accordingly, in determining the timeliness of a complaint for legal malpractice, troublesome issues arise in choosing between the tort and contract statutes for the relevant limitations period.

There is a great deal of commentary on the question of whether a claim for an attorney's malpractice sounds in tort or in contract for the purpose of selecting the applicable statute of limitations. ⁷ While many states have statutes specifically providing limitations periods for such claims ⁸ the courts of most states have been left at large to reach their own conclusions on the issue. In New York, for example, prior to the enactment of an express statute of limitations for legal malpractice in 1963, courts had evolved a standard which applied the limitations period for contracts to malpractice actions where there was alleged an agreement between attorney and client to reach a specific result, and the shorter statute for torts where there was no such allegation. See, e. g., Glens Falls Insurance Co. v. Reynolds, 3 A.D.2d 686, 159 N.Y.S.2d 95 (1957). In the absence of a legal malpractice statute, most jurisdictions permit a plaintiff the choice between the contract or tort limitations periods depending on how the complaint is framed. See Note, Attorney Malpractice, 63 Colum. 1292, 1309 (1963). These jurisdictions seem to recognize that in most cases the difference between a contractual breach of the oral agreement between an attorney and his client, in which the attorney expressly or impliedly promises to exercise his best efforts on the client's behalf, and a tortious breach by an attorney of his duty of due care in handling a client's affairs turns on the phraseology employed in the complaint.

This court should avoid applications of the law which lead to different substantive results based upon distinctions having their source solely in the niceties of pleading and not in the underlying realities. We agree with the reasoning of Justice Tobriner, writing for a unanimous California Supreme Court in Neel v. Magana, Olvey, Levy, Cathcart & Gelfand, supra, that regardless of the nomenclature used by the plaintiff in a legal malpractice suit, all such actions should be governed by the same statute of limitations. This follows from the proposition that, in reality, a claim of injury resulting from the professional incompetence of an attorney is actionable under theories which are an amalgam of both tort and contract. See generally Prosser, The Borderland of Tort and Contract, in Selected Topics on the Law of Torts 380, 423 (1954).

In Neel, the California Supreme Court held that claims for intangible injury resulting from legal malpractice are governed by section 339(1) of the California Code of Civil Procedure, which establishes a two-year limitations period for actions based 'upon a contract, obligation or liability not founded upon an instrument in writing.' 6 Cal.3d at 182, 491 P.2d at 424, 98 Cal.Rptr. at 840 (emphasis by the court). The court based its conclusion on a long line of California cases holding that the words 'obligation' and 'liability' encompassed an area greater than that of express or implied contractual undertakings. See Note, Client's Strategy for Damages against the Malpracticing Attorney, 15 Hast.L.Rev. 590, 596-97 (1964). In view of the fundamentally consensual quality of the attorney-client relationship, and also the usually intangible nature of any injury resulting therefrom, the application of a contractual statute of limitations for legal malpractice is logically appealing. ⁹ See Hillhouse v. McDowell, 219 Tenn. 362, 410 S.W.2d 162 (1966). This is true especially where, as...