Pope County v. Friday, Eldredge & Clark, 92-1060

• Decision Date: 03 May 1993
• Docket Number: No. 92-1060,92-1060
• Citation: Pope County v. Friday, Eldredge & Clark, 852 S.W.2d 114, 313 Ark. 83 (Ark. 1993)
• Parties: POPE COUNTY, Arkansas, et al., Appellants, v. FRIDAY, ELDREDGE & CLARK, a Partnership and Professional Association, Appellee.
• Court: Arkansas Supreme Court

Page 114

852 S.W.2d 114

313 Ark. 83

POPE COUNTY, Arkansas, et al., Appellants, v. FRIDAY, ELDREDGE & CLARK, a Partnership and Professional Association, Appellee.

No. 92-1060.

Supreme Court of Arkansas.

May 3, 1993.

Dale W. Finley, Russellville, for appellants.

Stephen A. Matthews, Pine Bluff, for appellee.

GLAZE, Justice.

In 1988, the appellee law firm was retained by the appellants as bond counsel for the purpose of assisting them in obtaining a valid bond issue for renovation and expansion of the county courthouse. On September 8, 1988, the quorum court adopted Emergency Ordinance No. 88-0-51 which was drafted by one of appellee's partners. On November 8, 1988, the bond issue was submitted to and approved by the voters, and on February 21, 1989, the appellee rendered its opinion to the trustee and the underwriter stating the new bonds had been validly issued and were binding on Pope County. Land was purchased and improvements were constructed.

A taxpayers' suit was subsequently filed, challenging the issuance of the bonds for the courthouse improvements, but on March 9, 1990, the chancellor upheld the bond issue and dismissed the plaintiffs' complaint. On appeal this court in a split-decision reversed the chancellor, finding that the bond ordinance was improperly presented to the voters and that it failed to obtain the voters' consent to transfer and use surplus funds from another or earlier public project for the courthouse improvements. This court further held that language in the ordinance did not authorize the expenditure of bond funds for construction of a parking lot. Keeton v. Barber, 305 Ark. 147, 806 S.W.2d 363 (1991). The Keeton decision was delivered on April 1, 1991. On remand the appellants were ordered to refund to the taxpayers approximately $300,000.00 and to pay their attorney fees and costs.

On January 21, 1992, the appellants filed their complaint alleging appellee was negligent in its performance as bond counsel. On June 10, 1992, the trial court granted the appellee's motion for summary judgment and dismissed the appellants' complaint with prejudice. In granting the summary judgment, the court found that the applicable statute of limitations for legal malpractice actions is three years. The trial court ruled the statute commenced when appellee's negligent act, if any, occurred which was when appellee prepared the bond ordinance, or at the latest, when the voters approved the bond issue on November 8, 1988. Under the trial court's findings, appellants had until November 8, 1991, to file their action against appellee. Thus, because the appellants delayed filing their suit until January 21, 1992, the trial court held their action was procedurally barred. The trial court rejected appellants' argument that the statute of limitations had been tolled under the facts and circumstances of the case.

Appellants' primary argument is that the trial court erred in ruling the three-year-limitation period had not been tolled. In short, appellants for purposes of argument agree that, at the latest, the appellee's negligent act occurred and the limitation period started when the voters approved the courthouse bond issue on November 8, 1988. ¹ They contend, however, that that period was tolled on March 9, 1990, when the chancellor in the Keeton case upheld the validity of the bond issue for the Pope County Courthouse improvements. At that juncture, sixteen months had run on the three-year period. It was at that stage, appellants argue, that the trial court's favorable bond decision effectively suspended the running of the statute of limitations for more than one year, namely, until this court on April 1, 1991 reversed the chancellor's ruling. Because of the one-year suspended period, appellants urge that they still had twenty months within which to file their malpractice action against appellee, and they did so on January 21, 1992.

In support of their tolling argument above, appellants rely on Stroud v. Ryan, 297 Ark. 472, 763 S.W.2d 76 (1989). We agree the Stroud decision is controlling. There, attorney Ryan failed to respond to a writ of garnishment which was served on his client, and Ryan's failure resulted in a default judgment against his client Stroud on November 3, 1982. Ryan successfully requested that the default judgment be set aside, and an order to this effect was entered on December 4, 1984. On February 19, 1986, the court of appeals reversed the lower court's order setting aside the default judgment. On December 18, 1986, Stroud sued Ryan alleging Ryan's negligence caused the default judgment, and Ryan defended, claiming the three-year limitation had run from the date of his negligent act. The trial court held Stroud's action was barred by the statute of limitations, but this court reversed. In sum, we held the limitation period had been tolled between the time the trial court erroneously set aside the...