Johnson v. Barrett

• Decision Date: 27 July 1999
• Docket Number: No. 98-594.,98-594.
• Citation: 983 P.2d 925,1999 MT 176
• Parties: Robert L. JOHNSON, Plaintiff and Appellant, v. Stephen M. BARRETT, Defendant and Respondent.
• Court: Montana Supreme Court

983 P.2d 925

1999 MT 176

Robert L. JOHNSON, Plaintiff and Appellant, v. Stephen M. BARRETT, Defendant and Respondent.

No. 98-594.

Supreme Court of Montana.

July 27, 1999.

Submitted on Briefs April 8, 1999.

Decided July 27, 1999.

Rehearing Denied August 31, 1999.

Brad A. Schreiber; Quinn, Eiesland, Day & Barker, Belle Fourche, South Dakota, For Appellant.

Keith Strong, John A. Kützman; Dorsey & Whitney, Great Falls, Montana, For Respondent.

Justice KARLA M. GRAY delivered the Opinion of the Court.

¶ 1 Robert L. Johnson (Johnson) appeals from the order of the Tenth Judicial District Court, Fergus County, granting the motion for summary judgment made by Stephen M. Barrett (Barrett). We affirm.

¶ 2 The sole issue on appeal is whether the District Court erred in granting Barrett's motion for summary judgment.

BACKGROUND

¶ 3 In May of 1989, a vehicle-pedestrian accident resulted in the death of Ruth Eatinger (Eatinger). Eatinger's estate and survivors hired Johnson, a licensed attorney, to probate the estate and pursue wrongful death and survival claims against the driver of the vehicle that struck Eatinger. The heirs subsequently hired a different attorney to represent them and sued Johnson for conversion of settlement proceeds in the tort actions. One of Johnson's defenses was that he had asserted an attorney's lien against the settlement proceeds. After a trial in August of 1993, the jury rendered a verdict for the survivors and awarded them compensatory and punitive damages. Johnson appealed.

¶ 4 One of the issues Johnson raised on appeal related to a jury instruction not given by the trial court. Noting that the focal point of his defense was an attorney's retaining lien, he contended that the trial court erred in instructing the jury on attorneys' charging liens, rather than attorneys' retaining liens, notwithstanding the fact that his counsel had offered only an instruction on attorneys' charging liens. We concluded that Johnson's failure to object to the instruction given barred his right to assert error in that regard. In addition, observing that Johnson's counsel stated he thought the language in the instruction on charging liens was broad enough to cover Johnson's defense, we refused to allow Johnson to benefit from an alleged error he created. We affirmed the trial court's judgment. Eatinger v. Johnson (1994), 269 Mont. 99, 106, 887 P.2d 231, 236.

¶ 5 On December 19, 1996, Johnson filed a complaint for legal malpractice against Barrett, who had represented him in the Eatinger conversion action, alleging Barrett was negligent in not submitting an instruction on attorneys' retaining liens and that his negligence resulted in the adverse jury verdict. Barrett filed an answer denying Johnson's allegations and asserting several affirmative defenses, including that Johnson's action was barred by the applicable statute of limitations.

¶ 6 Barrett subsequently filed a combined motion for summary judgment based on the statute of limitations and for Rule 11, M.R.Civ.P., sanctions against Johnson for including frivolous allegations for an improper purpose in his complaint. With regard to the statute of limitations, Barrett contended that Johnson knew of the facts which formed the basis for his legal malpractice claim as early as August 26, 1993, the date the jury rendered its verdict, but not later than December 9, 1993, when—after Barrett had provided the jury instructions submitted on Johnson's behalf at trial—he advised Barrett by letter for the second time to put Barrett's malpractice insurer on notice. Johnson argued that, while he knew no attorney's retaining lien instruction had been given, he did not know of Barrett's act of omission regarding the attorney's retaining lien instruction until he received a transcript of the instruction settlement conference on or after December 22, 1993. The parties fully briefed the motions and presented oral arguments.

¶ 7 The District Court granted Barrett's motion for summary judgment, concluding that Johnson was aware of the facts essential to his cause of action against Barrett as early as August 26, 1993, but no later than December 9, 1993, and that his complaint—filed December 19, 1996—was not filed within the three-year statute of limitations for legal malpractice actions. Johnson appeals.

SUMMARY JUDGMENT AND STANDARD OF REVIEW

¶ 8 A district court reviews a summary judgment motion under Rule 56(c), M.R.Civ.P., which requires that judgment be rendered "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." The party moving for summary judgment has the initial burden of establishing the absence of genuine issues of material fact. If that burden is met, the burden shifts to the nonmoving party to raise a genuine issue of material fact by more than mere denial or speculation. Stutzman v. Safeco Ins. Co. of America (1997), 284 Mont. 372, 376, 945 P.2d 32, 34 (citation omitted). All reasonable inferences which may be drawn from the offered proof must be drawn in favor of the party opposing summary judgment. See Schmidt v. Washington Contractors Group (1998), 290 Mont. 276, 280, 964 P.2d 34, 37

(citation omitted). Once a district court determines that no genuine factual issues exist, it then must determine whether the moving party is entitled to judgment as a matter of law. Stutzman, 284 Mont. at 376,

945 P.2d at 34 (citation omitted).

¶ 9 This Court's standard in reviewing a district court's summary judgment ruling is de novo. We use the same Rule 56, M.R.Civ. P., criteria applied by the district court. Stutzman, 284 Mont. at 376, 945 P.2d at 34 (citations omitted).

DISCUSSION

¶ 10 Did the District Court err in granting Barrett's motion for summary judgment?

¶ 11 The statute of limitations applicable to legal malpractice actions is set forth in § 27-2-206, MCA:

An action against an attorney licensed to practice law in Montana ... 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....

(Emphasis added.) When a statute of limitations issue relates to actual discovery, the test is knowledge of the facts essential to the legal malpractice claim, rather than discovery of legal theories. Loney v. Dye (1997), 281 Mont. 240, 242, 934 P.2d 169, 170 (citation omitted). When the statute of limitations issue involves the time at which the plaintiff, through the use of reasonable diligence, should have discovered the facts, "[t]he test is whether the plaintiff has information of circumstances sufficient to put a reasonable person on inquiry, or has the opportunity to obtain knowledge from sources open to his or her investigation." Peschel v. Jones (1988), 232 Mont. 516, 525, 760 P.2d 51, 56 (citations omitted). ¶ 12 In the present case, and drawing all reasonable inferences in favor of Johnson as the nonmoving party, the District Court determined that Johnson was aware of the facts underlying his legal malpractice claim no later than December 9, 1993, and that the three-year statute of limitations began to run at that time. Johnson asserts error.

¶ 13 Johnson contends that he was not aware of—that is, did not discover—the facts underlying his claim against Barrett until he received the transcript of the instruction settlement conference on or after December 22, 1993. It was only then, according to Johnson, that he knew Barrett had not offered an instruction on attorneys' retaining liens and, as a result, became aware of the facts underlying his legal malpractice claim. The problem with this contention is that, carried to its logical conclusion, Johnson could have delayed ordering...