Schoenrock v. Tappe

Decision Date19 February 1987
Docket NumberNo. 15484,15484
Citation419 N.W.2d 197
PartiesArlo J. SCHOENROCK, Plaintiff and Appellant, v. Lee A. TAPPE, Defendant and Appellee. . Considered on Briefs
CourtSouth Dakota Supreme Court

Randolph F. Stiles, Hanson, Stiles, Anderson & Swank, Mitchell, for plaintiff and appellant.

Carleton R. Hoy of Davenport, Evans, Hurwitz & Smith, Sioux Falls, for defendant and appellee.

MILLER, Justice (on reassignment).

This is a legal malpractice action which was dismissed by the trial court on the ground that the action was barred by the statute of limitations, SDCL 15-2-14.2. We affirm, reiterating that the statute of limitations is an occurrence rule, extending the continuous treatment doctrine to legal malpractice actions, but determining that under the facts presented here the statute of limitations bars the action as a matter of law.

FACTS

Appellant Arlo J. Schoenrock (Schoenrock) commenced this lawsuit claiming in his first cause of action that Attorney Lee Tappe (Tappe) was negligent in rendering a title opinion to him. In his second cause of action, Schoenrock alleged that Tappe failed to correct defects in the title after promising that he would do so.

Because consideration of the time frame is critical to this decision, the salient events will be set forth below in chronological order.

1. In October, 1980, Schoenrock entered into a contract to purchase three quarters of land from Raymond and Viola Sturgeon. He had previously leased this land from Sturgeons.

2. On February 20, 1981, Tappe rendered to Schoenrock a title opinion as designated attorney for the U.S. Farmers Home Administration (FmHA). The title opinion is on a standard FmHA Preliminary Title Opinion form showing Schoenrocks as loan applicants and applicants for the title examination.

This title opinion failed to mention that the property was subject to a certain wildlife easement to the United States Department of the Interior, U.S. Fish & Wildlife Service (Wildlife Service). The wildlife easement had been given by a prior owner in 1964 and contained various perpetual restrictions on the use of the land in order to provide for certain waterfowl production areas. It, among other things, specifically prohibits the drainage of lakes, ponds, sloughs, and similar conditions of the land. (Schoenrock was generally familiar with the provisions of such easements as some existed on other lands he had previously acquired.)

3. In March, 1981, Schoenrock had the land ditched and drained, contra to the restrictions on the easement.

4. In March (or possibly April) 1981, Schoenrock went to Tappe's office to retrieve the abstracts on the property. At that time, Schoenrock noted the wildlife easement entered on the abstract and asked Tappe about it. Schoenrock claims that Tappe told him it was nothing to be concerned about and that if Schoenrock had a problem with the easement that Tappe would take care of it. Tappe has no recollection of this conversation. Tappe's first recollection of a conversation dealing with the easement is in November 1984, which conversation will be referred to later in this chronology.

5. In April, 1981, Schoenrock received a certified letter from Wildlife Service informing him of the wildlife easement on the subject property. He did not contact Tappe.

6. In February, 1983, Schoenrock met with representatives of Wildlife Service and the United States Attorney to discuss problems caused by his ditching and draining the land contrary to the easement. Schoenrock did not contact Tappe, but rather consulted another attorney with whom he "usually" dealt.

7. In the summer of 1983, according to his complaint, Schoenrock was again contacted by the Wildlife Service and advised that he still had a problem and that he should take corrective action or face litigation by the federal government. Schoenrock did not contact Tappe.

8. On February 20, 1984, three years had passed since Tappe issued the title opinion.

9. In March or April of 1984, three years had passed since Schoenrock retrieved the abstracts from Tappe and had the claimed conversation that Tappe would take care of any problems arising from the existence of the easement.

10. In November, 1984, for the first time since March or April 1981, Schoenrock contacted Tappe about the easement problem. (There is no mention of this contact in Schoenrock's complaint.) This is Tappe's earliest recall of any discussion concerning the omission of the easement from the title opinion. In any event, Tappe unsuccessfully attempted to assist Schoenrock by making various contacts with Wildlife Service and the South Dakota congressional delegation.

11. In the fall of 1984, after being unsuccessful in negotiating with Wildlife Service, Schoenrock filled the drainage ditches and generally returned the land to its previous condition.

12. On November 25, 1985, Schoenrock's attorney signed the summons and complaint initiating this action. It is not clear from the record when the action was actually commenced, since the record is silent as to when the pleadings were served on Tappe. There is no certificate of service or admission of service in the file. Although the summons and complaint are dated in November, 1985, they were not filed with the clerk of courts of Charles Mix County until January 21, 1986. The first document actually filed in the case was an Order Disqualifying All Circuit Judges entered by Presiding Judge Hertz on January 2, 1986, which was filed on January 3, 1986. Tappe's answer and motion to dismiss is dated April 18, 1986, and was filed on May 20, 1986.

DECISION

Pursuant to a motion for summary judgment, the trial court found that the action was barred by the statute of limitations 1 and dismissed the action. This appeal followed.

THE STATUTE OF LIMITATIONS AS AN OCCURRENCE RULE

The statute of limitations is found at SDCL 15-2-14.2 and reads as follows:

An action against a licensed attorney, his agent or employee, for malpractice, error, mistake or omission, whether based upon contract or tort, can be commenced only within three years after the alleged malpractice, error, mistake or omission shall have occurred. This section shall be prospective in application.

Schoenrock contends that summary judgment was improper because, as a matter of law, the statute of limitations did not begin to run until he sustained some injury, which he claims did not occur until he finally reconverted his land to its original condition. 2

In effect, Schoenrock urges us to interpret South Dakota's statute of limitations as embodying the "date of damage" rule to determine when the statute begins to run for attorney malpractice actions. However, in South Dakota, neither the legislature nor this court's decisions apply this rule.

The general rule is that in the absence of an attorney's fraudulent concealment of his negligent advice, the statute of limitations on a claim of attorney malpractice begins to run at the time of the alleged negligence and not from the time when the negligence is discovered or the consequential damages are imposed. See Annot. 18 A.L.R.3d 978, 986-87 (1968).

Hoffman v. Johnson, 374 N.W.2d 117, 122 (S.D.1985); see generally Annot., When Statute of Limitations Begins to Run Upon Action Against Attorney for Malpractice, 32 A.L.R.4th 260 (1984); R. Mallen and B. Levitt, Legal Malpractice §§ 389, 390, 393 (1981); D. Meiselman, Attorney Malpractice: Law & Procedure §§ 5.4, 5.6, 5.7 (1980) (discussing the injury, discovery and occurrence rules).

Although our Hoffman decision actually applied another statute of limitations which was in effect before the enactment of SDCL 15-2-14.2, the court observed that the clearly expressed legislative intent of both SDCL 15-2-14.1 (medical malpractice) and SDCL 15-2-14.2 was to have the statute run from the date the alleged malpractice occurred. Hoffman, supra, citing Holy Cross Parish v. Huether, 308 N.W.2d 575 (S.D.1981); Alberts v. Giebink, 299 N.W.2d 454 (S.D.1980). Under the "occurrence rule" as expressed by our statute, a cause of action for negligently examining a title accrues at the time the attorney provides the client with the erroneous information, in effect, when the omission occurs. Attorney Malpractice, supra, § 5:12 at 90 n. 14. Thus, in this case, South Dakota's "occurrence rule" statute of limitations would normally run from the time that Tappe rendered the erroneous title opinion, which was in February, 1981, and the action would normally have been barred after February, 1984.

THE CONTINUING REPRESENTATION RULE

The running of our "occurrence rule" statute of limitations would normally be an easy matter to calculate from the date of an erroneous title opinion. Schoenrock, however, also presents us with the issue of whether the "continuing treatment doctrine" should be applied to prevent the statute of limitations from running in a legal malpractice action.

In applying the continuing treatment doctrine to medical professionals, we have held that a medical professional's continuing treatment of a patient, which serves as the basis for a malpractice action, prevents a statute of limitation from running until the treatment ceases. Wells v. Billars, 391 N.W.2d 668 (S.D.1986); see also Alberts v. Giebink, supra. Other courts, which have applied the continuous treatment doctrine to medical malpractice actions, have also extended it to legal malpractice actions. Siegel v. Kranis, 29 A.D.2d 477, 288 N.Y.S.2d 831 (1968); see, generally, Legal Malpractice, supra, § 391. See also Amfac Distribution Corp. v. Miller, 138 Ariz. 155, 673 P.2d 795 (App.1983), approved as supplemented, 138 Ariz. 152, 673 P.2d 792 (applying the discovery rule); Wall v. Lewis, 393 N.W.2d 758 (N.D.1986) (applying the discovery rule); McCormick v. Romans, 214 Va. 144, 198 S.E.2d 651 (1973).

We now hold that the "continuing treatment doctrine" applies not only to medical malpractice actions but is also extended to legal...

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