Rice v. Ragsdale

• Court: Arkansas Court of Appeals
• Writing for the Court: Waymond M. Brown
• Citation: Rice v. Ragsdale, 104 Ark. App. 364, 292 S.W.3d 856 (Ark. App. 2009)
• Decision Date: 11 February 2009
• Docket Number: No. CA 08-186.,CA 08-186.
• Parties: Dorothy Jean RICE, Winston Lee Rice, Jr., Dianne Anderson, and Gay Roberts, Appellants, v. Duncan RAGSDALE and Gerald Coleman, Appellees.

292 S.W.3d 856

104 Ark. App. 364

Dorothy Jean RICE, Winston Lee Rice, Jr., Dianne Anderson, and Gay Roberts, Appellants, v. Duncan RAGSDALE and Gerald Coleman, Appellees.

No. CA 08-186.

Court of Appeals of Arkansas.

February 11, 2009.

Blair & Stroud, by: H. David Blair and Michelle C. Huff, Batesville, for appellants.

Wright, Lindsey & Jennings, LLP, by: Edwin L. Lowther, Jr. and Gary D. Marts, Jr., Little Rock, for appellee Gerald Coleman.

Duncan E. Ragsdale, Jr., pro se appellee.

WAYMOND M. BROWN, Judge.

This appeal is from a judgment on the pleadings entered in a legal-malpractice case that appellants Dorothy Rice, Winston Rice, Jr., Dianne Anderson, and Gay Roberts filed against appellees, attorneys Duncan Ragsdale and Gerald Coleman, who represented them in a previous medical-malpractice case following the June 29, 2000 death of Winston Rice, Sr. We affirm the judgment for appellees.

On January 16, 2002, appellees mistakenly filed the medical-malpractice action without first causing a personal representative to be appointed or joining all of the wrongful-death beneficiaries. The statute of limitations on the medical claims ran on June 29, 2002, and on May 10, 2004, a defendant filed an answer challenging appellants' capacity to sue. The defendants then filed motions for summary judgment, which the trial court granted on September 30, 2004. On June 23, 2005, the supreme court affirmed the summary judgment. Rice v. Tanner, 363 Ark. 79, 210 S.W.3d 860 (2005).

Appellants sued appellees for legal malpractice in this action on May 3, 2006, asserting claims for negligence and under Ark.Code Ann. § 16-22-306 (Repl.1999), which states that, if a lawsuit is dismissed on account of the negligence of an attorney, the attorney shall be liable for all damages his client may have sustained by the dismissal or any other neglect of duty by the attorney. Appellees moved to dismiss on the basis of the three-year statute of limitations, Ark.Code Ann. § 16-56-105 (Repl.2005). Appellants filed an amended complaint adding a claim for breach of fiduciary duty and alleging that appellees' fraudulent concealment had tolled the limitations period. Appellees then filed motions for judgment on the pleadings on the basis of the statute of limitations.

On November 5, 2007, the circuit court granted the motion for judgment on the pleadings, making the following findings:

4. The Court finds that the claim of negligence asserted in Count I of the complaint is governed by the three-year statute of limitations, which statute ran no later than June 29, 2005, three years after the last day upon which the underlying action could have been timely commenced. The Court therefore finds, based upon the allegations of Plaintiff's First Amended Complaint, that Defendants are entitled as a matter of law to a judgment on the claim of negligence asserted in Count I of Plaintiffs' First Amended Complaint.

....

6. The Court finds that Plaintiffs' cause of action under Ark.Code Ann. § 16-22-306 is governed by the three-year, rather than the five-year, statute of limitations and that the statute of limitations as to Defendants' statutory liability under Ark.Code Ann. § 16-22-306 ran no later than June 29, 2005, three years after the last day the medical malpractice action could have been properly instituted.

8. The Court finds that Plaintiffs' claim based upon the allegation of breach of fiduciary duty is governed by the same statute of limitations as that of a claim based upon Defendants' alleged negligence and that the statute of limitations on both claims expired on the 29th day of June, 2005, or three years from the last date on which the underlying medical action could have been commenced.

....

10. The Court finds that under the facts alleged in Count IV of Plaintiffs' First Amended Complaint, Plaintiffs had an independent duty to investigate the accuracy of Defendants' assurance, and that their failure to do so bars their claim that the three-year statute of limitations was tolled by Defendants' alleged fraudulent concealment.

11. The Court further finds that on the face of Plaintiffs' First Amended Complaint, all claims against Defendants, arising out of Defendants' handling of the underlying medical malpractice case, ran on June 29, 2005. Because Plaintiffs' First Amended Complaint was filed herein on May 3, 2006, it is time-barred. Accordingly Defendants' motion for judgment on the pleadings is granted as to all claims asserted in Plaintiffs' First Amended Complaint and this case should be and hereby is ordered dismissed with prejudice.

Appellants filed a timely appeal on November 28, 2007.

Motions for judgments on the pleadings are not favored by courts. LandsnPulaski, LLC v. Ark. Dep't of Corrections, 372 Ark. 40, 269 S.W.3d 793 (2007). Such a judgment should be entered only if the pleadings show on their face that there is no defense to the suit. Id. When considering the motion, the court views the facts alleged in the complaint as true and in the light most favorable to the party seeking relief. Id.

In their first point, appellants ask us to hold that the trial court erred in ruling that the expiration of the limitations period for the medical-malpractice case marked the commencement of the statutory period as to their negligence claims against appellees. In making this request, they urge us to overrule supreme court precedent dating back to 1877. We must, however, follow the precedent set by the supreme court, and are powerless to overrule its decisions. Brewer v. State, 68 Ark.App. 216, 6 S.W.3d 124 (1999). Further, under the doctrine of stare decisis, the appellate courts are bound to follow prior case law. Chamberlin v. State Farm Mut. Auto. Ins. Co., 343 Ark. 392, 36 S.W.3d 281 (2001). The policy of stare decisis is designed to lend predictability and stability to the law. Id. It is well settled that precedent governs until it gives a result that is so patently wrong or manifestly unjust that a break becomes unavoidable. Id. The test is whether adherence to the rule would result in great injury or injustice. Id. This is not such a case.

The limitations period for legal malpractice actions, set forth in Arkansas Code Annotated § 16-56-105(3) (Repl. 2005), is three years. Delanno, Inc. v. Peace, 366 Ark. 542, 237 S.W.3d 81 (2006). The same statute applies to claims for negligence, fraud, and breach of fiduciary duty. Chalmers v. Toyota Motor Sales, USA, Inc., 326 Ark. 895, 935 S.W.2d 258 (1996); Alexander v. Flake, 322 Ark. 239, 910 S.W.2d 190 (1995). Absent concealment, the statute of limitations begins to run upon the occurrence of the wrong, Delanno, Inc. v. Peace, supra, and not when it is discovered. Stoltz v. Friday, 325 Ark. 399, 926 S.W.2d 438 (1996). This rule applies even when there is an interval between the allegedly tortious act and the damage suffered by the plaintiff. See, e.g., Moix-McNutt v. Brown, 348 Ark. 518, 74 S.W.3d 612 (2002). The "occurrence rule" has remained the law since 1877, even though the supreme court has been invited to change it on numerous occasions. Stoltz v. Friday, supra. The supreme court has refused to adopt an alternative to the traditional "occurrence rule" in the following cases: Moix-McNutt v. Brown, supra; Ragar v. Brown, 332 Ark. 214, 964 S.W.2d 372 (1998); Stoltz v. Friday, supra; Morris v. McLemore, 313 Ark. 53, 852 S.W.2d 135 (1993); Chapman v. Alexander, 307 Ark. 87, 817 S.W.2d 425 (1991); and Riggs v. Thomas, 283 Ark. 148, 671 S.W.2d 756 (1984).

Appellants ask us to reject the "occurrence rule," and adopt an alternative rule known as the "injury rule" or "damage rule," because their cause of action was not yet complete when the alleged malpractice occurred. They contend that, until they sustained actual, not simply nominal, damages, all of the elements of their cause of action were not present. They argue that the earliest event that completed their cause of action was when their capacity to sue was put in issue in the wrongful-death action, May 10, 2004, which was within three years of the filing of the complaint in this action. They are incorrect, because when the statute of limitations on their medical-malpractice claims ran on June 29, 2002, they lost a valuable property right. See Bunt v. Bunt, 294 Ark. 507, 744 S.W.2d 718 (1988).

There are at least three common approaches taken to determine when a cause of action for legal malpractice accrues. One current trend is the "termination of employment" rule, whereby the statute of limitations does not begin to run until the attorney-client relationship has ended; another is the "damage rule" or "injury rule" (which also has a variation termed the "discovery rule"), under which the statute begins to run from the time injury results from the negligent act. Chapman v. Alexander, supra. Under the "occurrence rule," the malpractice action (like ordinary tort and contract actions) accrues when the last element essential to the cause of action occurs, unless the attorney actively conceals the wrongdoing; the rationale is to prevent attorneys from having to defend stale claims, to preserve evidence, and to treat all plaintiffs equally. Id. Our supreme court has acknowledged the appeal of the other approaches, but concluded that our courts' traditional rule, established in White v. Reagan, 32 Ark. 281 (1877), has a countervailing fairness about it:

First, everyone is treated in the same manner. Second, an abstractor, accountant, architect, attorney, escrow agent, financial advisor, insurance agent, medical doctor, stockbroker, or other such person will not be forced to defend some alleged act of malpractice which occurred many years ago. The problem with the delay is that his or her records or witnesses may no longer be available. For example, in the oral argument of this case, it was developed that under the "discovery rule" an attorney could be forced to defend the validity of a mortgage 25 to 30 years after the...