IN THE COURT OF APPEALS OF THE STATE OF IDAHO
Docket No. 37494
ROBERT J. McCORMACK, )
) 2011 Opinion No. 39
Plaintiff-Appellant, )
) Filed: July 1, 2011
v. )
) Stephen W. Kenyon, Clerk
CHRISTOPHER E. CALDWELL and )
WHITEHEAD, AMBERSON & )
CALDWELL, PLLC, )
)
Defendants-Respondents. )
)
Appeal from the District Court of the Second Judicial District, State of Idaho, Nez
Perce County. Hon. Carl B. Kerrick, District Judge.
Summary judgment for defendants, affirmed.
Robert J. McCormack, Boise, pro se appellant.
Whitehead, Amberson & Caldwell, P.L.L.C.; Richard G. Whitehead,
Coeur d’Alene, for respondents.
________________________________________________
LANSING, Judge
Robert J. McCormack appeals from the district court’s summary judgment in favor of
defendants, Christopher E. Caldwell and the law firm of Whitehead, Amberson & Caldwell,
P.L.L.C. The court dismissed McCormack’s claims upon concluding that they are barred by the
statute of limitation. We affirm.
I.
BACKGROUND
This action arises from the defendants’ legal representation of McCormack on a worker’s
compensation claim. McCormack was injured at work in April of 2001 and began receiving
monthly total temporary disability (TTD) benefits from his employer’s worker’s compensation
insurer. McCormack contends that after he received the August 22, 2001, payment, he was
informed by the insurance company that his benefits would be discontinued. Believing that he
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had a claim against the insurance company, McCormack engaged Caldwell, a member of the law
firm of Whitehead, Amberson & Caldwell, P.L.L.C. to represent him. McCormack’s TTD
benefits checks resumed during the period from September 2001 through February 2002
(apparently as a result of Caldwell’s efforts). However, at the defendants’ direction, they were
sent by the insurance company to the law firm instead of directly to McCormack. McCormack
alleges that he was unaware that these benefits had been reinstated and were being sent to the
law firm. Stamps and writing on the checks indicate they were endorsed with McCormack’s
name and cashed at MoneyTree, a check-cashing business. McCormack contends, however, that
the defendants, or someone in the defendants’ employment, must have forged his signature and
cashed the checks and that he never received them.
McCormack’s worker’s compensation case ultimately went to hearing before the Idaho
Industrial Commission. Caldwell retained multiple expert witnesses, including a vocational
rehabilitation counselor, to testify in McCormack’s case at the hearing. In July 2006, the
Industrial Commission entered an order awarding benefits to McCormack--TTD benefits through
May 30, 2002, and permanent partial disability benefits. Caldwell forwarded a copy of the order
to McCormack along with a letter dated August 2, 2006, which estimated the total dollar value of
the award as well as the amount of attorney fees McCormack owed Caldwell. Because
McCormack would not allow Caldwell to deduct attorney fees from McCormack’s award,
Caldwell petitioned the Industrial Commission for an order allowing attorney fees. This issue
was eventually resolved in February of 2007. It appears that McCormack did not receive
payment of the award from this process until March of 2008.
On June 8, 2009, McCormack filed the complaint in this case in which he alleged that the
defendants “mishandled” the TTD checks sent to them from September 2001 through February
2002. McCormack argued that this conduct violated various Idaho Rules of Professional
Conduct, specifically those involving fraud, misrepresentation, and failure to promptly notify a
client of, and deliver, funds received on the client’s behalf. Other than citing Idaho Rules of
Professional Conduct, McCormack’s complaint did not characterize this claim as professional
malpractice or fraud. It simply alleged that the insurance company, unbeknownst to him, had
issued checks that were sent to the law firm, that he never received those checks, that the checks
were cashed by someone at the law firm, and that he suffered harm as a result of these facts.
McCormack also alleged that Caldwell was liable to him for deficiencies in his employment of
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the vocational rehabilitation counselor who testified at McCormack’s worker’s compensation
hearing. The complaint alleged that Caldwell failed to retain the counselor in a timely manner
with the consequence that the counselor did not have enough time to prepare for the hearing and
for that reason, the counselor’s opinion was not given sufficient weight by the Industrial
Commission. McCormack’s complaint also asserted that the statute of limitation for his claims
was two years and alleged that he had not discovered his injuries or the alleged misconduct until
March of 2008, presumably the date upon which he received his final payment of the award from
the Industrial Commission.
The defendants moved to dismiss McCormack’s complaint as time-barred, characterizing
McCormack’s claims as allegations of professional malpractice subject to the two-year statute of
limitation of Idaho Code § 5-219(4). McCormack did not dispute that this was the correct statute
of limitation, but argued for application of the I.C. § 5-219(4) provision that in the event that the
wrongdoer fraudulently concealed the damage from the injured party, a claim will be deemed to
accrue when the injured party knows or has been put on inquiry notice of the basis for the claim
complained of.
The district court granted the defendants’ summary judgment motion. The court applied
I.C. § 5-219(4) and held that McCormack should have been aware of the defendants’ alleged
misconduct no later than the date of the Industrial Commission’s decision in late July 2006. The
court therefore determined that the statute of limitation expired in July 2008, nearly a year before
McCormack filed his complaint.
On appeal, McCormack does not challenge the dismissal of his cause of action for
Caldwell’s alleged malpractice in failing to retain the vocational rehabilitation counselor within a
sufficient time for the counselor to prepare for the Industrial Commission hearing. He claims
error only in the dismissal of his cause of action for the defendants’ alleged “mishandling” of the
TTD checks.
II.
DISCUSSION
A. Standard of Review
Summary judgment may be entered only if “the pleadings, depositions, and admissions
on file, together with the affidavits, if any, show that there is no genuine issue as to any material
fact and that the moving party is entitled to judgment as a matter of law.” Idaho Rule of Civil
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Procedure 56(c). See also Avila v. Wahlquist, 126 Idaho 745, 747, 890 P.2d 331, 333 (1995);
Idaho Bldg. Contractors Ass’n v. City of Coeur d’Alene, 126 Idaho 740, 742, 890 P.2d 326, 328
(1995). On review, this Court liberally construes the evidence in favor of the party opposing the
motion and draws all reasonable inferences and conclusions in that party’s favor. Farm Credit
Bank of Spokane v. Stevenson, 125 Idaho 270, 272, 869 P.2d 1365, 1367 (1994). If reasonable
persons could reach different findings or draw conflicting inferences from the evidence, the
motion should be denied. Id. However, if the evidence reveals no disputed issues of material
fact, only a question of law remains over which this Court exercises free review. Roell v. Boise
City, 130 Idaho 199, 200-01, 938 P.2d 1237, 1238-39 (1997).
B. Procedural and Evidentiary Issues
McCormack first argues that the defendants incorrectly cited Idaho Rule of Civil
Procedure 12(b)(6) for its dismissal motion because the motion was not made on a “failure to
state a claim” basis but on a “statute of limitation” basis. This contention is of no consequence.
Although labeled as a Rule 12(b)(6) motion, the defendants’ dismissal motion was properly
treated by the trial court as one for summary judgment because matters outside the pleadings
were considered. See Gibson v. Bennett, 141 Idaho 270, 273, 108 P.3d 417, 420 (Ct. App. 2005);
Lake v. Newcomb, 140 Idaho 190, 192, 90 P.3d 1272, 1274 (Ct. App. 2004).
McCormack also takes issue with the district court’s reliance on a particular affidavit to
support the summary judgment decision because the affidavit was “hearsay” and not subject to
cross-examination by McCormack. With the motion treated as one for summary judgment
governed by I.R.C.P. 56, the district court properly considered the defendants’ supporting
affidavits. Contrary to McCormack’s arguments, the affidavits were not inadmissible as hearsay,
for I.R.C.P. 56(c) expressly authorizes the use of affidavits to support or oppose summary
judgment motions. See, e.g., Gray v. Tri-Way Constr. Servs., Inc., 147 Idaho 378, 383, 210 P.3d
63, 68 (2009).
C. Statute of Limitation for McCormack’s Cause of Action Alleging “Mishandled”
Checks
The premise of the defendants’ summary judgment motion was that McCormack’s claims
were barred by the two-year limitation period proscribed by I.C. § 5-219(4) for professional
malpractice actions. In the proceedings below, McCormack did not urge application of any other
statute of limitation. On appeal, however, McCormack argues for application of the three-year
statute of limitation for fraud actions, I.C. § 5-218(4), and the defendants continue to advocate
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application of I.C. § 5-219. We conclude that neither party is correct, and neither party cited to
the district court nor to this Court the correct statute of limitation for McCormack’s claim that his
checks were stolen, which is in substance a conversion claim. When a trial court makes a correct
disposition of a claim, but on an erroneous theory, a reviewing court will affirm on the correct
theory. Dawson v. Cheyovich Family Trust, 149 Idaho 375, 382, 234 P.3d 699, 706 (2010); cf.
Posey v. Ford Motor Credit Co., 141 Idaho 477, 480, 111 P.3d 162, 165 (Ct. App. 2005)
(holding that even though both parties argued common law contract principles below and on
appeal, and neither party mentioned the Uniform Commercial Code (UCC) provisions, on appeal
the Court would apply the correct governing law, the provisions of the UCC).
The appropriate statute of limitation is determined by the substance of the claim, not the
form of the action, and “[t]he first analytical step is to classify [the] cause of action so the
applicable statute of limitations can be used to determine whether the claim is time barred.”
Nerco Minerals Co. v. Morrison Knudsen Corp., 140 Idaho 144, 148, 90 P.3d 894, 898 (2004).
Thus, in Common Sch. Dist. No. 18 v. Twin Falls Bank & Trust Co., 52 Idaho 200, 202, 12 P.2d
774, 775 (1932), the Court held that because the substance of petitioner’s claim was for the tort
of conversion, the applicable statute of limitation would be that governing conversion actions
even though the plaintiff classified its claim as a contract claim. How a plaintiff characterizes a
claim, the Court said, “is immaterial so far as an application of the appropriate statute of
limitations is concerned, since the substance of the action governs the latter consideration and
not the form.” The Court further said whether the complaint sounded in tort or in contract, it was
subject to the three-year statute of limitation, now codified as I.C. § 5-218(3), for “an action for
taking, detaining or injuring any goods or chattels . . . .” Common Sch. Dist. No. 18, 52 Idaho at
202-03, 12 P.2d at 775-76.
In this case, the substance of McCormack’s claim is that his worker’s compensation
benefit checks were stolen and forged. This is a conversion claim. Therefore, the applicable
statute of limitation is I.C. § 28-3-118(7), which establishes the limitation period for actions for
conversion of instruments. 1 It states that “an action . . . for conversion of an instrument, for
1
A check is a type of “instrument.” I.C. § 28-3-104(1), (2), (6). See also Idah-Best, Inc. v.
First Sec. Bank of Idaho, N.A., Hailey Branch, 99 Idaho 517, 522, 584 P.2d 1242, 1247 (1978);
Kulczyk v. Kehle, 108 Idaho 640, 641-42, 701 P.2d 260, 261-62 (Ct. App. 1985).
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money had and received, or like action based on conversion . . . must be commenced within three
(3) years after the cause of action accrues.” 2 Although this statute does not define when a cause
of action for conversion of a negotiable instrument accrues, a cause of action generally accrues
“when a party may maintain a lawsuit against another.” Western Corp. v. Vanek, 144 Idaho 150,
151, 158 P.3d 313, 314 (Ct. App. 2006). In a conversion action this ordinarily means when the
item is wrongfully taken. Freiberger v. American Triticale, Inc., 120 Idaho 239, 241, 815 P.2d
437, 439 (1991); Havird v. Lung, 19 Idaho 790, 794, 115 P. 930, 931 (1911). Consequently,
McCormack’s cause of action for conversion of each check accrued when it was stolen and
forged. As the last such check was cashed at MoneyTree on or about February 22, 2002, the
statute of limitation for McCormack’s conversion claim for the last check expired in February
2005, more than four years before he filed this action.
McCormack argues that the applicable statute of limitation should not be deemed to run
until he could have discovered the theft, which he argues was sometime in 2008. However,
McCormack does not point us to, and we have not found, any Idaho authority allowing discovery
exceptions for the running of a statute of limitation other than those authorized by I.C. §§ 5-
218(4) and 5-219(4), which are inapplicable here. In deference to the authority of the Idaho
Legislature to graft discovery exceptions onto statutes of limitation when it elects to do so, the
Idaho Supreme Court has declined to recognize additional discovery exceptions. Knudsen v.
Agee, 128 Idaho 776, 778-79, 918 P.2d 1221, 1223-24 (1996); Theriault v. A.H. Robins Co., Inc.,
108 Idaho 303, 308, 698 P.2d 365, 370 (1985).
Specifically with respect to conversion actions, the Idaho Supreme Court long ago held
that there is no discovery exception. Havird, 19 Idaho at 794, 115 P. at 931. In Havird, the
plaintiff believed for many years that his horse was simply lost when in fact a landowner who
found the horse on his land kept, used, and then sold the horse. Although the plaintiff did not
2
Idaho Code § 28-3-420(1) provides in part: “[a]n action for conversion of an instrument
may not be brought by . . . (ii) a payee or indorsee who did not receive delivery of the instrument
either directly or through delivery to an agent or co-payee.” For purposes of this analysis we
assume that the law firm received the checks as McCormack’s agent and, therefore, delivery of
the checks to the law firm constituted delivery to McCormack “through delivery to an agent” for
purposes of I.C. § 28-3-420. Otherwise, McCormack may have had no cause of action for
conversion of the checks at all, but would have retained his claim against the drawer of the
checks, the worker’s compensation insurer. See I.C. § 28-3-420 and Official Comment 1 thereto.
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discover this until many years later, the Idaho Supreme Court said that such nondiscovery was
immaterial to application of the statute of limitation. The Court held that the limitation period
for the owner’s conversion claim began to run when the horse was taken, “even though the thing
taken is secreted or concealed so as to elude discovery.” Id. Likewise, in Common Sch. Dist.
No. 18, the Court held that there was no discovery exception to the statute of limitation for a
conversion action brought against a bank for conversion of funds. The Court said, “The fact of
discovery becomes controlling only when the action is based upon the ground of fraud or
mistake, and does not have any application to a mere tortious taking which does not involve
fraud in its commonly accepted significance.” Common Sch. Dist. No. 18, 52 Idaho at 205, 12
P.2d at 776.
As in Common Sch. Dist. No. 18, “This is not an action for fraud[3] or mistake within the
common acceptance of those terms. It is an action for misappropriation, whatever be its
form . . . .” Id. at 206, 12 P.2d at 776-77. There being no discovery exception for conversion
actions, McCormack’s cause of action for the conversion of each check accrued when the
conversion occurred. Therefore, the action is barred by the I.C. § 28-3-118(7) three-year
limitation period for actions for conversion of instruments. 4
D. Are the Respondents Entitled to Attorney Fees on Appeal?
Respondents request attorney fees on appeal pursuant to Idaho Code § 12-121 and Idaho
Appellate Rule 41, asserting that McCormack’s appeal is groundless and frivolous and caused
the respondents to suffer unjustified financial burdens.
3
Under Idaho law, the elements of an action for fraud are: (1) a statement or
representation of fact, (2) the statement or representation was false, (3) the statement or
representation was material, (4) the speaker knew of its falsity, (5) the speaker intended that
there be reliance on the statement or representation, (6) the plaintiff was ignorant of the
statement’s or representation’s falsity, (7) the plaintiff relied on the statement or representation,
(8) such reliance was justifiable, and (9) there was a resultant injury. Taylor v. McNichols, 149
Idaho 826, 845-46, 243 P.3d 642, 661-62 (2010); Glaze v. Deffenbaugh, 144 Idaho 829, 833, 172
P.3d 1104, 1108 (2007).
4
McCormack lists as additional “Issues Presented on Appeal” various statements such as
“attorney estopped from asserting statute of limitation and failure to disclose” and “Idaho and
U.S. constitutional right violated” which are not further developed or supported by argument or
authority in McCormack’s appellant’s brief. These various assertions will not be further
addressed as we do not consider claims on appeal unsupported by either argument or authority.
Powell v. Sellers, 130 Idaho 122, 128, 937 P.2d 434, 440 (Ct. App. 1997).
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An award of attorney fees may be granted under I.C. § 12-121 to the prevailing party, and
such an award is appropriate when the court is left with the abiding belief that the appeal has
been brought or defended frivolously, unreasonably, or without foundation. Rendon v. Paskett,
126 Idaho 944, 945, 894 P.2d 775, 776 (Ct. App. 1995). We conclude that this standard is not
satisfied here. Although we affirm the dismissal of McCormack’s action, we have rejected the
respondents’ argument as to the applicable statute of limitation, and we cannot say that
McCormack’s arguments were frivolous. We therefore decline to award attorney fees.
III.
CONCLUSION
The district court’s summary judgment dismissing this action is affirmed. Costs, but not
attorney fees, to respondents.
Judge GUTIERREZ and Judge MELANSON CONCUR.
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