Peters v. Simmons

• Decision Date: 05 August 1976
• Docket Number: No. 43941,43941
• Citation: 87 Wn.2d 400,552 P.2d 1053
• Parties: D. E. PETERS and Phyllis Peters, his wife, Appellants, v. J. Lael SIMMONS, Respondent.
• Court: Washington Supreme Court

Page 400

87 Wn.2d 400

552 P.2d 1053

D. E. PETERS and Phyllis Peters, his wife, Appellants, v. J. Lael SIMMONS, Respondent.

No. 43941.

Supreme Court of Washington, En Banc.

Aug. 5, 1976.

Casey, Pruzan, Kovarik & Shulkin, David G. Shenton, Seattle, for appellants.

Phil McIntosh, Seattle, for respondent.

WRIGHT, Associate Justice.

This is an appeal by plaintiffs from an order of the King County Superior Court dismissing their action for alleged malpractice against defendant, an attorney, on the basis that it was barred by the statute of limitations.

The issues dispositive of this appeal are: (1) Has this court acquired jurisdiction to entertain the instant appeal? (2) Does the statute of limitations for legal malpractice commence to run when the client discovers or, in the exercise of reasonable diligence, should have discovered that he or she had suffered an injury.

On May 19, 1969, plaintiffs sold their business, the Mercer Island Taxi Company, to Bellevue Enterprises, Inc. The purchase agreement drafted for them by defendant, an attorney, failed to include a guaranty clause or signature line for the signature of John Fisk, president of Bellevue Enterprises, Inc., as guarantor of the purchaser's obligation. Subsequently, Bellevue Enterprises, Inc., failed to make the required payments under the purchase agreement and defaulted.

On January 14, 1971, defendant filed an action entitled 'Peters v. Bellevue Enterprises, Inc. and John Fisk' as a result of the default on the purchase agreement. On November 11, 1972, defendant withdrew as plaintiffs' counsel and consented to the substitution of other counsel. The cause of action was dismissed. Plaintiffs' substituted counsel, who represents them on this appeal, then commenced another action entitled 'Peters v. Fisk.' On June 19, 1974, the court dismissed this action. The court found that, during the May 19, 1969, meeting, at which the purchase agreement was executed by the plaintiffs and by Fisk, defendant failed to inform either Fisk or the purchaser's attorney that Fisk's signature as a guarantor was required on the purchase agreement.

On July 17, 1974, plaintiffs filed the instant action against defendant for damages in the sum of $32,366.74, plus interest. The complaint for damages alleged that defendant had negligently drafted the purchase agreement. Defendant raised in his answer the affirmative defense that plaintiffs' action was barred by the 3-year statute of limitations, RCW 4.16.080, ¹ because the negligent act upon which the complaint was based occurred on May 19, 1969. Defendant's motion for summary judgment of dismissal was granted on December 18, 1974, on the ground that the plaintiffs' action was barred by the statute of limitations.

Plaintiffs timely filed an appeal in the Court of Appeals from the order granting summary judgment of dismissal. On March 11, 1975, the superior court entered an amended order granting defendant's motion for summary judgment of dismissal. No appeal was taken from this order. The order was amended to reflect the fact that the superior court had taken into consideration plaintiffs' and defendant's briefs regarding the motion for summary judgment of dismissal and an affidavit of Delmer E. Peters. The affidavit verified the facts recited in the first three pages of plaintiffs' brief.

With respect to the first issue, defendant contends that (1) this court lacks jurisdiction to entertain the appeal because no notice of appeal was filed from the order of March 11, 1975, which is the judgment appealed from; and (2) the appeal properly should be dismissed as premature because it was filed before entry of final judgment.

CAROA 33 provides, in part:

(1) In civil actions appealable to the court of appeals in order for the court of appeals to obtain jurisdiction of the cause, a written notice of appeal, together with a copy of the same, must be filed with, . . . the clerk of the superior court within thirty days after entry of the order, judgment, or decree from which the appeal is taken.

CAROA 2(f) defines the term 'judgment' to mean 'any judgment, order or decree from which an appeal lies.' RCW 4.56.010 sheds additional light on the meaning of the term 'judgment.' It provides that a 'judgment is the final determination of the rights of the parties in the action.'

The term 'judgment' is to be distinglished from the term 'order.' Nestegard v. Investment Exchange Corp., 5 Wash.App. 618, 623, 489 P.2d 1142 (1971). Although the court rules do not define the latter term, RCW 4.56.020 defines the term to mean:

Every direction of a court or judge, made or entered in writing, not included in a judgment, is denominated an order.

The judgment from which the appeal was taken, which was entered on December 18, 1974, is entitled 'Order Granting Defendant's Motion for Summary Judgment of Dismissal.' The amended order from which no appeal was taken, which was entered on March 11, 1975, is entitled 'Amended Order Granting Defendant's Order for Summary Judgment of Dismissal.' The only purpose served by the amended order was to provide a statement of record that the trial court had considered, prior to entry of the original judgment, an affidavit, and the briefs supporting or opposing the motion for summary judgment of dismissal. The amended order was not a final judgment, but merely a subsidiary order because it did not constitute a Determination of the rights of the parties in the action. See Nestegard v. Investment Exchange Corp., supra at 623--25, 489 P.2d 1142. The appeal was not prematurely filed because the rights of the parties were finally determined by the order granting defendant's motion for summary judgment entered on December 18, 1974.

With respect to the primary issue, the plaintiffs contend that the court should adopt the rule that the 3-year statute of limitations, RCW 4.16.080(3), does not begin to run until the facts have been discovered, or, in the exercise of reasonable diligence, should have been discovered. During oral argument, defendant agreed with the court that the failure of an attorney to perform properly legal services contracted for may constitute a breach of contract. The defendant also agreed that the failure to act as a reasonably prudent, diligent attorney in light of the standards of his or her profession may give rise to an action for negligence. The crux of defendant's argument, then, is simply that the statute of limitations begins to run on the date of the alleged act of malpractice.

This issue was last considered in Busk v. Flanders, 2 Wash.App. 526, 468 P.2d 695 (1970). The Busk case adhered to prior Washington law which had adopted the traditional view that a malpractice suit is based on a breach of contract and that the statute of limitations begins to run from the time of the breach and not from the date of its discovery. Schirmer v. Nethercutt, 157 Wash. 172, 179--80, 288 P.265 (1930); Cornell v....