Stalk v. Mushkin

• Decision Date: 29 January 2009
• Docket Number: No. 48201.,48201.
• Citation: 199 P.3d 838
• Parties: Michelle STALK and Urban Construction Company, LLC, A Nevada Limited Liability Company, Appellants, v. Michael MUSHKIN, Respondent.
• Court: Nevada Supreme Court

199 P.3d 838

Michelle STALK and Urban Construction Company, LLC, A Nevada Limited Liability Company, Appellants, v. Michael MUSHKIN, Respondent.

No. 48201.

Supreme Court of Nevada.

January 29, 2009.

Kenneth L. Hall, Las Vegas, for Appellants.

Patti, Sgro & Lewis and Mark C. Hafer, Las Vegas, for Respondent.

BEFORE HARDESTY, C.J., PARRAGUIRRE and DOUGLAS, JJ.

OPINION

By the Court, HARDESTY, C.J.:

In this appeal, we consider which statutes of limitation apply to claims for intentional interference with prospective business advantage, intentional interference with contractual relations, and breach of fiduciary duty arising from an attorney-client relationship. We determine that claims for intentional interference with prospective business advantage and contractual relations are claims for injuring personal property and are subject to the three-year statute of limitations in NRS 11.190(3)(c). A claim for breach of fiduciary duty arising from an attorney-client relationship is a legal malpractice claim and is therefore subject to the statute of limitations contained in NRS 11.207(1). Based on these determinations, we affirm the district court's summary judgment on the claims for intentional interference with prospective business advantage and contractual relations, and we reverse the district court's summary judgment on the claim for breach of fiduciary duty arising from the attorney-client relationship.

FACTS AND PROCEDURAL HISTORY

This case involves numerous legal and business relationships between respondent Michael Mushkin; appellants Michelle Stalk and her company, Urban Construction Company, LLC; and Allan Bird and his corporation, Real Property Services Corporation (RPSC). Bird and RPSC are not parties to this appeal. Mushkin, an attorney, served as legal counsel to Stalk, Bird, and their respective entities. Mushkin also had a business relationship with Bird, during which he presented Bird with investment opportunities. Stalk and Urban Construction also had a 30-year business relationship with Bird and RPSC developing various parcels of real property.

Beginning in May 2001, Mushkin served as defense counsel for Stalk and Urban Construction in various mechanic's lien matters. While the mechanic's lien claims were being litigated, Mushkin began representing RPSC in an employment wrongful termination action. On behalf of RPSC, Mushkin filed a motion to dismiss or for summary judgment, arguing that the employee who brought the action actually had been employed by Urban Construction and that Stalk had made the decision to terminate that employee. Mushkin asserted that Stalk and Urban Construction were therefore "indispensable parties" to the employee's suit for wrongful discharge. Although the motion was denied, in January 2002, the employee amended her complaint to name Urban Construction as a defendant. Subsequently, in May 2003, Stalk attended a settlement conference in the wrongful termination case. According to Stalk, it was at this conference that she learned that Urban Construction had been added as a defendant because of Mushkin's summary judgment motion. Stalk ultimately settled with the employee for $2,000.

In the meantime, Urban Construction and RPSC were parties to several contracts for the performance of construction services, and they had started the preliminary stages of development on two other projects. However, Bird later terminated Urban Construction as general contractor for RPSC by letter dated June 7, 2001. Stalk and Urban Construction alleged that shortly before Bird terminated the general construction agreements it had with Urban Construction, Mushkin solicited a personal friend to bid on the construction projects that RPSC had contracted with Urban Construction to complete. According to Stalk and Urban Construction, Mushkin's actions caused Bird to terminate its contracts with Urban Construction.

Stalk and Urban Construction ultimately filed the underlying suit against Mushkin on August 26, 2004, asserting claims for negligence, intentional interference with prospective business advantage, intentional interference with contractual relations, and breach of fiduciary duty. The claims for intentional interference with prospective business advantage and contractual relations were predicated on Mushkin's alleged interference with the contracts Urban Construction had with RPSC, and the breach of fiduciary duty claim was based on Mushkin's actions in the employment action, specifically, alerting the employee that Stalk and Urban Construction were indispensible defendants.

Finding that Stalk and Urban Construction sought damages for injuries caused by Mushkin's negligence or wrongful acts, the district court granted summary judgment on the negligence cause of action for failure to state a claim and granted summary judgment on the three remaining claims on the ground that they were time-barred by the two-year statute of limitations under NRS 11.190(4)(e). Stalk and Urban Construction now appeal from the summary judgment as to the claims for intentional interference with prospective business advantage, intentional interference with contractual relations, and breach of fiduciary duty.

DISCUSSION

This matter presents two issues of first impression, as we have not previously announced the statutes of limitation applicable to claims for intentional interference with prospective business advantage and contractual relations or for breach of fiduciary duty in the context of an attorney-client relationship. We take this opportunity to do so.

Standard of review

This court reviews a district court order granting a motion for summary judgment de novo. Sustainable Growth v. Jumpers, LLC, 122 Nev. 53, ___, 128 P.3d 452, 458 (2006). "Summary judgment is . . . appropriate [only] when no genuine issues of material fact [exist] and the moving party is entitled to judgment as a matter of law." Clark v. Robison, 113 Nev. 949, 950, 944 P.2d 788, 789 (1997). Thus, "[s]ummary judgment is proper when a cause of action is barred by the statute of limitations." Id. at 950-51, 944 P.2d at 789. We also review issues of statutory interpretation de novo. Torrealba v Kesmetis, 124 Nev. ___, ___, 178 P.3d 716, 721 (2008).

Claims for intentional interference with prospective business advantage and intentional interference with contractual relations are claims for injury to personal property and are therefore subject to the three-year statute of limitations in NRS 11.190(3)(c)

Stalk and Urban Construction argue on appeal that NRS 11.190(2)(c)'s four-year statute of limitations applies to both of their intentional interference claims because those claims are grounded on damage to intangible or inchoate interests in obtaining future benefits. In response, Mushkin maintains that the district court properly applied NRS 11.190(4)(e)'s two-year statute of limitations. He alternatively argues that NRS 11.190(3)(c)'s three-year limitation period applies because a contract right is personal property. Under either statute, Mushkin asserts that summary judgment was appropriate because more than three years elapsed before Stalk and Urban Construction filed their complaint.

Here, the district court concluded that NRS 11.190(4)(e) applied to Stalk and Urban Construction's claims for intentional interference with a prospective business advantage and with contractual relations. NRS 11.190(4)(e) provides a two-year statute of limitations for "action[s] to recover damages for injuries to a person . . . caused by the wrongful act or neglect of another." Although Mushkin asserts that this provision provides the statute of limitations for all wrongful act torts generally, we have previously addressed and rejected this argument.¹

To determine the statute of limitations applicable to claims for intentional interference with prospective business advantage and contractual relations, we must first determine the true nature of those claims. See Hartford Ins. v. Statewide Appliances, 87 Nev. 195, 197, 484 P.2d 569, 571 (1971) (explaining that the object of the action, rather than the legal theory under which recovery is sought, governs when determining the type of action for statute of limitations purposes). Claims for intentional interference with a prospective business advantage and contractual relations seek compensation for damage to business interests. See Zimmerman v. Bank of America National T. & S. Ass'n, 191 Cal. App.2d 55, 12 Cal.Rptr. 319, 321 (1961) ("The actionable wrong lies in the inducement to break the contract or to sever the relationship, not in the kind of contract or relationship so disrupted, whether it is written or oral, enforceable or not enforceable."). Business interests include intangible assets and inchoate rights, as well as other rights incidental to business ownership. See Teller v. Teller, 99 Hawai`i 101, 53 P.3d 240, 248 (2002) (indicating that goodwill and trade secrets are intangible assets in which business owners have property rights). See also Clark v. Figge, 181 N.W.2d 211, 215 (Iowa 1970) (citing Liggett Co. v. Baldridge, 278 U.S. 105, 111, 49 S.Ct. 57, 73 L.Ed. 204 (1928), overruled on other grounds by North Dakota Pharmacy Bd. v. Snyder's Stores, 414 U.S. 156, 167, 94 S.Ct. 407, 38 L.Ed.2d 379 (1973)). Such interests are personal property.

Generally, claims for interference with prospective business advantage and with contractual relations are recognized as actions in tort, not in contract, and will be governed by the statute of limitations relating to torts. Maurice T. Brunner, Annotation, What Statute of Limitations Governs Action for Interference with Contract or Other Economic Relations, 58 A.L.R.3d 1027, § 2[a] (1974). However, in some jurisdictions, including Nevada, where separate statutes govern injuries to persons and injuries to property, there is a split of authority as to which statute of limitations applies to claims for intentional interference with prospective business...