Long v. Buckley

• Decision Date: 02 April 1981
• Docket Number: CA-CIV,No. 1,1
• Citation: 629 P.2d 557,129 Ariz. 141
• Parties: Gilbert D. LONG and Doris J. Long, husband and wife, Plaintiffs-Appellants, v. Guy M. BUCKLEY and Ruth Buckley, his wife; Darrell F. Smith and Margie Smith, his wife; L. Alton Riggs, Jr., and Treva Riggs, his wife; Westlyn C. Riggs and Marlene Riggs, his wife; Donald O. Fuller and Kay Fuller, his wife; and John Doe, Defendants-Appellees. 4750.
• Court: Arizona Court of Appeals

Page 557

629 P.2d 557

129 Ariz. 141

Gilbert D. LONG and Doris J. Long, husband and wife, Plaintiffs-Appellants, v. Guy M. BUCKLEY and Ruth Buckley, his wife; Darrell F. Smith and Margie Smith, his wife; L. Alton Riggs, Jr., and Treva Riggs, his wife; Westlyn C. Riggs and Marlene Riggs, his wife; Donald O. Fuller and Kay Fuller, his wife; and John Doe, Defendants-Appellees.

No. 1 CA-CIV 4750.

Court of Appeals of Arizona, Division 1, Department A.

April 2, 1981.

Sargeant, Elliott & Newman by William P. Sargeant, III, Phoenix, for plaintiffs-appellants.

Weyl, Guyer, MacBan & Olson, by K. C. Weyl, Phoenix, for defendants-appellees.

OPINION

WREN, Chief Judge.

In this appeal we are asked to review a summary judgment determination that the statute of limitations begins to run on a claim for damages against a lawyer for malpractice of law at the time of the negligent act rather than at the time of its discovery. We have determined that the time of discovery is the critical point and therefore reverse.

The facts are briefly stated. On June 21, 1973, appellant, Gilbert D. Long, was injured and his automobile damaged as a result of a collision with another vehicle being driven by Carl M. Luna, an employee of Westside Toyota. On July 17, 1973, appellants Long and his wife, Doris J. Long, retained appellee Guy M. Buckley, a lawyer, to represent them in their claim against Luna and Westside Toyota. The remainder of the appellees were law partners of Buckley and their spouses.

When no lawsuit was filed by Buckley against Luna and Westside Toyota within the two year period of limitations following the accident, appellants, on September 1, 1978, filed a complaint against appellees for malpractice and breach of contract. Appellees moved for summary judgment on the ground that the two year statute of limitations for a malpractice claim against appellees had expired on both causes of action. The motion was granted by the trial court. This appeal by the Longs followed.

Our role, in reviewing the grant of summary judgment, is to determine whether there is any genuine issue of material fact underlying the adjudication, and, if not, whether the substantive law was correctly applied. Appellants acknowledge that their complaint was brought after the two year statute of limitations for tort under A.R.S. § 12-542. ¹ However, they rely upon two theories to avoid the consequences of its restrictions. They first assert that the time period did not commence until appellants were informed by appellees on February 24, 1977 that the limitations statute on their cases against Luna and Westside Toyota had expired. Second, appellants assert that they had a claim against appellees on a written contract which had a six year period of limitations under A.R.S. § 12-548, ² and that the complaint against Buckley was therefore timely filed as to the contract claim.

TORT CLAIM

The trial court, in granting summary judgment, concluded that the statute was not tolled by appellants' failure to discover the facts giving rise to their claim against appellees, and that their complaint was therefore untimely filed. In Arizona, legal malpractice actions are subject to the two year statute of limitations for tort claims. Wheeler v. Priebe, 17 Ariz.App. 59, 495 P.2d 499 (1972); Yazzie v. Olney, Levy, Kaplan & Tenner, 593 F.2d 100 (9th Cir., 1979).

In Yazzie the facts underlying the lawsuit for malpractice were similar to those here. The defendant law firm had failed to file on behalf of its clients (plaintiffs) all possible wrongful death and personal injury actions arising out of an automobile accident, within the two year period for tort claims. The firm defended the malpractice suits later brought against it by its former clients, by filing a motion for summary judgment, arguing that any claims against the firm had accrued on the date the statute had run on their wrongful death and personal injury claims, and were now barred by the same two year statute of limitations. Plaintiffs responded to this contention by urging that the time restriction was tolled by their reasonable failure to discover the facts constituting their causes of action for legal malpractice, until the only suit filed by the firm on their behalf because of the accident was dismissed and they learned about the dismissal. The Ninth Circuit Court of Appeals held that a reasonable failure to discover the acts of malpractice prevented the limitations statute from running. In doing so the court made the following interpretation of A.R.S. § 12-542: ³

In Nielson v. Arizona Title Insurance & Trust Co., 15 Ariz.App. 29, 30, 485 P.2d 853, 854 (1971), the Arizona Court of Appeals stated as the "rule in Arizona":

(U)nder the statute providing that negligence actions shall be commenced and prosecuted within two years after the cause of action accrues, the legislature intended that a cause of action accrues when the plaintiff knew or should have known of defendant's conduct, and the statute of limitations begins to run at that time. A.R.S. Sec. 12-542; Meyer v. Good Samaritan Hospital, 14 Ariz.App. 248, 482 P.2d 497 (1971)

Thus, under Arizona law, the question of when appellants knew or should have known of appellees' negligence is critical to determining whether the statute of limitations has run. 593 F.2d at 103. ⁴

As in Yazzie, since the trial court here erroneously concluded that the discovery rule did not apply to a legal malpractice case, it did not reach the question of whether there was a material factual dispute as to when the appellants knew or should have known of the alleged malpractice by appellees. Moreover, the record before us reflects that there were genuine issues of material fact on the issue of time of discovery. For instance, appellees' defenses include an allegation that they withdrew from appellants' case prior to the running of the statute. Moreover, the discovery issue itself involves questions of reasonableness and knowledge, matters which this court is particularly wary of deciding as a matter of law. We therefore conclude that the trial court erred in granting summary judgment on the tort claim.

CONTRACT CLAIM

Because the issue may well confront the trial court again on remand, we next consider appellants' claim that even if their tort claim is barred by the statute of limitations, the complaint against the appellees also stated a claim upon a written contract, subject to the six year period of limitations under A.R.S. § 12-548. Since the instant lawsuit was filed within six years of the contractual agreement, appellants contend that their contract claim for malpractice is not timebarred. For the following reasons we disagree.

At the time appellees first undertook to represent appellants, a Retainer Agreement ⁵ was executed by Buckley and each of the would be plaintiffs. As contended by appellants, the law is well settled in Arizona that a breach of contract action may be maintained although the action upon which the alleged breach is founded may also amount to negligence. Kain v. Arizona Copper Company, Ltd., 14 Ariz. 566, 133 P. 412 (1913); Beane v. Tucson Medical Center, 13 Ariz.App. 436, 477 P.2d 555 (1970). Moreover, since the undertaking of the lawyer is usually pursuant to a contract of employment, legal malpractice usually consists of both a tort and a breach of contract. Neel v. Magana, Olney, Levy, Cathcart & Gelfand, supra.

It is one thing, however, to say that a cause of action may be maintained in contract against a lawyer for an act of malpractice, and quite another to urge that the writing executed in this case gave rise to a six year period of limitations. By its terms the retainer agreement concerned itself solely with the payment of fees for appellees' legal services, and contained no mention of the specific services which were to be performed.

Again we turn to Yazzie for an almost identical situation and a statement of Arizona law on the subject. In Yazzie the plaintiffs made the same contention of a six year limitation period on a written contract between each plaintiff and the defendant law firm. Each contract provided, in relevant part, that the plaintiff "do(es) hereby retain the law firm ... to represent me and my children in an action for damages against the parties responsible for (my injuries or the death of my husband)." ⁶ In responding to this issue Yazzie found the Arizona decision of Beane v. Tucson Medical Center, supra to be controlling, and held that the statute of limitations for breach of a written contract did not apply to plaintiffs' claim of malpractice.

In Beane the plaintiff was admitted to the hospital for orthopedic surgery. Upon entering the hospital he signed a document entitled "Conditions of Admission to Tucson Medical Center". Following an infection, a complaint was filed against the hospital alleging both contract and tort cause of action. Acknowledging that the tort claim was time barred, plaintiffs asserted that their claim for breach of a contractual obligation to provide adequate post-operative care and treatment should fall within the six year written contract limitation for filing a...