Va. Sharkey v. Prescott

• Decision Date: 16 May 2011
• Docket Number: No. 2009–316–Appeal.,2009–316–Appeal.
• Citation: 19 A.3d 62
• Parties: Virginia SHARKEYv.George M. PRESCOTT et al.
• Court: Rhode Island Supreme Court

19 A.3d 62

Virginia SHARKEY

v.George M. PRESCOTT et al.

No. 2009–316–Appeal.

Supreme Court of Rhode Island.

May 16, 2011.

Neil P. Philbin, Esq., Peace Dale, for Plaintiff.Melina J. Mannix, Esq., Warwick, for Defendant.Present: SUTTELL, C.J., GOLDBERG, FLAHERTY, ROBINSON, and INDEGLIA, JJ.

OPINION

Justice INDEGLIA, for the Court.

The plaintiff, Virginia Sharkey (plaintiff or Sharkey), appeals from a Superior Court judgment granting the motion of the defendant, George M. Prescott (defendant or Prescott), for summary judgment and dismissing the plaintiff's action alleging legal malpractice. The plaintiff argues that a grant of summary judgment in favor of the defendant was inappropriate because genuine issues of material fact exist about whether the statute of limitations barred the plaintiff's complaint. This case came before the Supreme Court for oral argument on January 31, 2011, pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not summarily be decided. Subsequent to our consideration of the parties' submitted memoranda and oral arguments, we are satisfied that cause has not been shown, and we proceed to decide the appeal at this time. For the reasons set forth below, we affirm the judgment in part and reverse it in part.

IFacts and Travel

The plaintiff and her husband, Walter Sharkey, retained defendant to provide legal services in 1999 for the preparation of an estate plan.¹ Prescott accordingly established a trust indenture, known as “The Sharkey Family Trust,” which the Sharkeys executed on July 9, 1999.² That same day, as relevant to this appeal, the Sharkeys signed quitclaim deeds prepared by defendant, which conveyed two lots of land (Lots 42 and 43) that the couple owned in Narragansett to themselves as trustees.³ In addition to Lots 42 and 43, the other trust assets included a brokerage account and the Sharkeys' marital home in Woonsocket. The terms of the trust provided that upon the death of either plaintiff or her husband, the trust estate was to be divided into two trusts: the “Marital Trust” and the “Residuary Trust.” The marital trust was to contain the residence and a fraction of the remainder of the estate with the balance funding the residuary trust.

According to defendant, plaintiff visited his law office in July 2001 and “asked why both lots 42 and 43 had been transferred to the trust.” In a letter dated July 19, 2001, which defendant said that he sent to plaintiff to memorialize their conversation about why the properties were placed in the trust, defendant concluded, “I see no reason for your complaint that I did something wrong in preparing and executi[ng] your estate plan.” However, according to plaintiff, she did not receive this letter.⁴ Indeed, plaintiff stated in her affidavit that she “did not complain to * * * Prescott in July 2001 that he had done anything wrong in preparing the estate plan” because she “did not know in 2001 that * * * Prescott had done anything wrong in preparing the estate plan.”

On October 8, 2003, plaintiff met with a zoning official of the Town of Narragansett in preparation for the sale of Lot 43. The plaintiff maintained that, at this meeting, she learned that “because Lots 42 and 43 had been deeded into [the trust], the Town of Narragansett would consider both lots to have ‘merged.’ ” Consequently, she was told that “Lot 43 could not be sold separately from Lot 42” However, plaintiff said that the receipt of this information did not make her “aware that Lot 43 could have been kept out of [the trust] and in [her] separate ownership until” she was counseled to that effect by another attorney in December 2003. Therefore, she asserted that only then did she become “aware for the first time that * * * Prescott might have been negligent when he included in our estate plan the conveyance of both Lots 42 and 43 to [the trust].”

Additionally, according to plaintiff, after consulting a Citizens Bank representative in July 2006, she “became aware for the first time that * * * Prescott made a second mistake by setting up [the trust] so that” she was not able to get access to the principal of the brokerage account that was in the residuary trust. The plaintiff maintained that she and her husband informed defendant when discussing their estate plan that their priority was to provide for the surviving spouse. Because this directive was, in plaintiff's view, not adequately achieved, she “decided to sue * * * Prescott for legal malpractice.”

Sharkey filed a complaint in Providence County Superior Court on October 3, 2006. She alleged that “defendant's conduct in advising the plaintiff and her husband to deed Lots 42 and 43 into the living trust was a breach of the defendant's duty to use reasonable care, skill, and diligence on behalf of the plaintiff.” The plaintiff claimed that she was damaged as a result in the amount of $400,000, the approximate fair-market value of Lot 43. Sharkey also alleged that “defendant's conduct in drafting the Trust Indenture so as to deny [her] access to the principal in the Residuary Trust was a breach of the defendant's duty to use reasonable care, skill, and diligence.” The plaintiff said that she “sustained substantial financial loss” as a consequence of defendant's alleged breach of duty. Additionally, she requested equitable modification of the trust to afford her “maximum access to and control over principal from the Residuary Trust, while limiting that access and control only to the extent necessary to assure minimum tax liability.” Finally, she petitioned the court for “[e]quitable cancellation of the deed that conveyed Lot 43 into [the trust].”

On May 22, 2009, defendant moved for summary judgment under Rule 56(b) of the Superior Court Rules of Civil Procedure on the basis that plaintiff's claims of legal malpractice against him were time-barred. The defendant argued that the action was brought outside of the applicable statute of limitations for legal-malpractice claims codified at G.L.1956 § 9–1–14.3 because plaintiff's action was commenced more than three years since the incidents giving rise to it occurred. The plaintiff argued in opposition to the motion that her complaint was not time-barred because under the “discovery rule” codified at § 9–1–14.3(2), the incidents of malpractice were not discoverable in the exercise of reasonable diligence at the time that they occurred and were discovered by plaintiff within the three years prior to the filing of her complaint. The motion was heard before a justice of the Superior Court on July 21, 2009.

After hearing the arguments of the parties and reviewing the pleadings, deposition testimony, and affidavits, the trial justice concluded that “plaintiff has failed to come forward with admissible evidence to demonstrate the applicability of the discovery doctrine.” Therefore, the trial justice granted defendant's motion for summary judgment because plaintiff's action was barred under the statute of limitations for legal-malpractice actions. A judgment was entered on July 24, 2009, in favor of defendant. The plaintiff filed a timely notice of appeal.

IIIssues on Appeal

On appeal, plaintiff argues that the trial justice erred when she concluded that the discovery rule did not apply and granted defendant's motion for summary judgment on all plaintiff's claims. Specifically, Sharkey contends that “[a] plain reading of [her] affidavit and the attached exhibits reveals ample evidence to demonstrate outstanding issues of material fact that render summary judgment inappropriate.” Therefore, the issues before this Court are whether the trial justice properly granted defendant's motion for summary judgment on plaintiff's claims that defendant committed legal malpractice when he advised the Sharkeys to deed both their Narragansett properties to the trust and when he drafted the trust so as to prevent the surviving spouse from accessing the principal of the residuary trust.

IIIStandard of Review

“It is well settled that this Court reviews a hearing justice's grant of summary judgment de novo.” Parker v. Byrne, 996 A.2d 627, 632 (R.I.2010) (citing Credit Union Central Falls v. Groff, 966 A.2d 1262, 1267 (R.I.2009)). “We will affirm such a decision only if ‘after reviewing the admissible evidence in the light most favorable to the nonmoving party, we conclude that no genuine issue of material fact exists and that the moving party is entitled to judgment as a matter of law.’ ” Prout v. City of Providence, 996 A.2d 1139, 1141 (R.I.2010) (quoting Lucier v. Impact Recreation, Ltd., 864 A.2d 635, 638 (R.I.2005)). Conversely, “if the record evinces a genuine issue of material fact, summary judgment is improper and we will accordingly reverse.” Canavan v. Lovett, Schefrin and Harnett, 862 A.2d 778, 783 (R.I.2004) (citing Belanger v. Silva, 114 R.I. 266, 267–68, 331 A.2d 403, 405 (1975)).

IVDiscussion

Upon our de novo review, this Court must determine whether defendant was entitled to summary judgment because plaintiff's allegations were time-barred or whether the discovery-rule exception to the three-year statute of limitations is applicable. Section 9–1–14.3 sets forth the three-year statute of limitations governing legal-malpractice actions.⁵ However, this section also codifies the exception for “those injuries due to acts of legal malpractice which could not in the exercise of reasonable diligence be discoverable at the time of the occurrence of the incident which gave rise to the action, suit shall be commenced within three (3) years of the time that the act or acts of legal malpractice should, in the exercise of reasonable diligence, have been discovered.” Section 9–1–14.3(2). The discovery-rule exception serves “to protect individuals suffering from latent or undiscoverable injuries who then seek legal redress after the statute of limitations has expired for a particular claim.” Canavan, 862 A.2d at 783 (citing Ashey...