Preblich v. Zorea

• Citation: 996 P.2d 730
• Decision Date: 10 March 2000
• Docket Number: No. S-8635.,S-8635.
• Parties: Evalyn PREBLICH, Appellant, v. Moshe ZOREA, Appellee.
• Court: Supreme Court of Alaska (US)

996 P.2d 730

Evalyn PREBLICH, Appellant, v. Moshe ZOREA, Appellee.

No. S-8635.

Supreme Court of Alaska.

March 10, 2000.

Evalyn Preblich, pro se, Anchorage.

Moshe Zorea, pro se, Anchorage.

Before MATTHEWS, Chief Justice, EASTAUGH, FABE, BRYNER, and CARPENETI, Justices.

OPINION

CARPENETI, Justice.

I. INTRODUCTION

Evalyn Preblich appeals from the summary dismissal of her attorney malpractice action against Moshe Zorea. The superior court granted summary judgment because the statute of limitations had run. Because we conclude that Preblich had sufficient information to alert her that she had a cause of action more than six years before she filed suit, we affirm.

II. FACTS & PROCEEDINGS¹

Preblich retained Zorea in October 1987 to represent her in a bankruptcy proceeding. After a 1988 conversion of Preblich's case from Chapter 11 to Chapter 7 of the Bankruptcy Code, Preblich and Zorea attended a meeting with Preblich's creditors. At this meeting, Preblich learned that her bankruptcy trustee was entitled to her escrow accounts and to administer her properties. Upon learning this, Preblich experienced "total surprise and dismay...."

Following the meeting, Preblich discussed her financial situation with Zorea. When Preblich expressed concern about how she would pay her bills, Preblich recalled that Zorea stated that she should look into receiving energy assistance from the state and "consider signing up for welfare."

By 1989 Preblich became increasingly dissatisfied with Zorea's representation. She stated that for a period of over two months, she left "continuous messages" for Zorea to call her, and that he never returned her calls. In August 1989 Preblich wrote a letter to the bankruptcy court in which she tried to inform the judge of her "distinct impression" that she "no longer had a lawyer...."

During the latter months of 1989, Preblich received a number of papers from the bankruptcy court. Preblich recalled that when she asked Zorea about these papers, he replied that they did "not make any difference" to her, or that they were "not important" to her bankruptcy action. Preblich, however, felt that the papers did have "significant meaning," and she consulted with other attorneys between August and September of 1989. These other attorneys told Preblich that she "should take some kind of immediate action."

On September 12, 1989 the bankruptcy court entered an order that denied Preblich a debtor's discharge. In 1989 the trustee in bankruptcy moved for summary judgment that Preblich was not entitled to a debtor's discharge. Preblich met with Zorea about a week later. When Preblich asked Zorea if he was still her lawyer, Zorea responded that he was still her attorney of record. Preblich stated that Zorea did not discuss the consequences of the denial of discharge with her, and that he said that "[i]t was too late to do anything about the bankruptcy...." On October 3, 1989 the bankruptcy court entered a final judgment that denied Preblich's discharge.²

On October 23 Preblich again met with Zorea and received the impression that he was through with her case. After the meeting, Preblich tried to find someone else to represent her.

On December 12, 1989 Preblich discovered that a hearing regarding the foreclosure of her home was scheduled for the next day. Zorea did not attend the hearing, nor had he informed Preblich that it was taking place. Preblich did attend and managed to delay the foreclosure. On December 27 Preblich attended a different hearing that involved other tracts of her real property. Once again, Zorea failed to attend the hearing. Preblich, however, did attend the hearing and submitted documents to the court that she prepared with the assistance of new counsel. This lawyer became Preblich's attorney of record in January 1990, remaining as her attorney until June 1990. Preblich found it "apparent" that Zorea "had absolutely no qualms or problems with this substitution, as he had not been available or ... of any help to [her] for months."

In June 1990 Preblich, acting pro se, filed a grievance against Zorea with the Alaska Bar Association. Zorea admitted to misconduct and stipulated to a public reprimand from the Bar Association in December 1995. On March 28, 1996 Preblich filed this lawsuit for professional malpractice.

Preblich's complaint makes numerous allegations. Among other things, it alleges that Zorea: (1) fraudulently misrepresented that he had expertise in bankruptcy and breached his contractual duty when he failed to file a Chapter 11 reorganization plan, thus forcing her into Chapter 7 liquidation; (2) failed to adequately represent her in the bankruptcy proceedings, causing the loss of valuable property; (3) failed to inform her of a judicial foreclosure on her property; (4) failed to answer the trustee's opposition to her discharge from bankruptcy; and (5) failed to return her calls or otherwise communicate with her.³ In his answer, Zorea denied these allegations. For the purposes of appeal, these allegations are taken as true.⁴

In January 1998 Zorea moved for summary judgment on the grounds that the action was barred by the statute of limitations. Preblich opposed the motion. The superior court granted it on February 27, 1998.⁵

Preblich then filed a motion for reconsideration, arguing that the statute of limitations was tolled because she had not discovered the wrongful actions until June 1990. Because Preblich was pro se, the court allowed her to submit additional facts in opposition to summary judgment; the court also allowed Zorea to respond. Zorea opposed Preblich's motion and submitted two affidavits prepared and signed by Preblich in 1990. These affidavits are discussed below.

The superior court denied Preblich's motion for reconsideration. In its order, the court stated that Preblich's "allegations, if true, raise serious lawyer malpractice issues." Nevertheless, it found that Preblich's affidavit[s] established that by August or September 1989, Preblich was unhappy with Zorea's representation, felt he had abandoned her, informed the bankruptcy court that Zorea no longer represented her, and began to consult other attorneys. The court found that Preblich had learned by December 1989 that she had nearly lost her home as a result of Zorea's inattention. Based on these facts, the court ruled that "reasonable minds could not differ on whether Preblich had sufficient information to alert her to a malpractice claim against Zorea prior to March 28, 1990."

Following the superior court's denial of her motion for reconsideration, Preblich moved for oral argument and an evidentiary hearing regarding the discovery issue. The court treated the motion as one for reconsideration of the order denying reconsideration, and denied it. The court noted that the new affidavit submitted by Preblich asserted that she did not actually know that she had a malpractice claim until she was within the limitations period; however, it found that the affidavit did not set forth facts material to the court's earlier holding that she should have discovered the claim earlier.

Preblich then filed this appeal.

III. DISCUSSION

A. Standard of Review

Summary judgment is appropriate if the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, show that there is no genuine issue as to any material fact and that any party is entitled to a judgment as a matter of law."⁶ This court reviews a summary judgment de novo.⁷ "Drawing all reasonable inferences in favor of the non-movant, we determine whether the parties genuinely dispute any facts material to a viable legal theory and, if not, whether the undisputed facts entitle the movant to judgment as a matter of law."⁸ The moving party bears the initial burden of proving, through admissible evidence, the absence of genuine factual disputes and its entitlement to judgment as a matter of law.⁹ Once the moving party has established a prima facie case, "the non-movant is `required, in order to prevent entry of summary judgment, to set forth specific facts showing that he could produce admissible evidence reasonably tending to dispute or contradict the movant's evidence, and thus demonstrate that a material issue of fact exists.'"¹⁰

B. The Superior Court Did Not Err in Granting Zorea's Motion for Summary Judgment.

The six-year statute of limitations applies to this professional malpractice action.¹¹ Ordinarily, the statute of limitations begins to run on the date the plaintiff is injured.¹² However, we have consistently held that the discovery rule applies to professional malpractice actions.¹³

Under the discovery rule, the cause of action accrues when the plaintiff has information sufficient to alert a reasonable person to the fact that he has a potential cause of action. At that point, he should begin an inquiry to protect his ... rights and he is "deemed to have notice of all facts which reasonable inquiry would disclose."¹⁴

Accordingly, Preblich was required to bring suit within six years of the time she knew or reasonably should have known of all the elements of her cause of action.

The trial court held that Preblich had failed to bring suit within six years of the time she should have discovered she had an action against Zorea, and thus her suit was time barred.

1. Zorea established a prima facie case for summary judgment.

Zorea submitted two affidavits signed by Preblich to support his motion for summary judgment. In these affidavits, Preblich states that she first became "extremely concerned" and "dismayed" in November 1988 when she was ordered to surrender her bank accounts and management of her property to the bankruptcy trustee. She found it "most disturbing" and was "total[ly] surprise[d]" to find that the trustee was entitled to her escrow accounts and to manage her properties. Significantly, these events occurred over one year before the trial court found the statute of limitations...