Levy v. Martin - Case Law

Michigan Supreme Court
Lansing, Michigan 48909
____________________________________________________________________________________________

Chief Justice Justices
Elizabeth A. Weaver Micha el F. Cavana gh

Opinion
Marilyn Kelly
Cliffor d W. Taylor
Maura D. Corrigan
Robert P. Young, Jr.
Stephen J. Markman
____________________________________________________________________________________________________________________________

FILED JANUARY 3, 2001

MARTIN I. LEVY and

MARTIN I. LEVY, D.D.S., P.C.,

Plaintiffs-Appellants,

v No. 115603

MARK L. MARTIN, GERALD HOSKOW,

and HOSKOW & MARTIN, P.C.,

Defendants-Appellees.

________________________________

PER CURIAM

The plaintiffs filed a malpractice action that the

circuit court dismissed on the ground that the limitation

period had expired. The Court of Appeals affirmed. Because

we agree with the plaintiffs that their suit was timely, we

reverse in part the judgments of the circuit court and the

Court of Appeals.

From 1974 until 1996, accountants Mark L. Martin and

Gerald Hoskow1 prepared the annual tax returns of Martin I.

1
Messrs. Martin and Hoskow were principals in an

accounting firm that bore their names. In this opinion, when

we refer to them, we also mean their firm.

Levy, D.D.S.2 As the result of an audit by the Internal

Revenue Service, Dr. Levy was required to pay additional taxes

for 1991 and 1992, as well as penalties and interest.3 He

also incurred legal expenses and additional accounting

expenses.4

In August 1997, Dr. Levy filed in circuit court a

complaint in which he alleged that losses exceeding ninety

thousand dollars had been caused by the malpractice of Messrs.

Martin and Hoskow.5

The 1991 and 1992 tax returns of which Dr. Levy

complained were prepared and submitted in 1992 and 1993,

respectively. Observing that the limitation period for a

malpractice action is two years,6 Messrs. Martin and Hoskow

filed a motion to dismiss in lieu of an answer.7 The circuit

2
Taxes were also prepared for Dr. Levy’s professional

corporation. References to Dr. Levy include the corporation.

3
In his application to this Court, Dr. Levy says he

received a “notice of deficiency” form in December 1995 and

that he settled with the IRS in March 1997, when stipulated

orders were entered in two cases in the United States Tax

Court.

4
This case was dismissed by the circuit court before a

trial or discovery. For present purposes, we thus accept as

true the plaintiffs’ allegations.

That allegation was contained in count I of the

complaint, which was titled “Negligence & Professional

Malpractice.” There also was a count II--
--“Negligent and

Fraudulent Misrepresentation.”

6
MCL 600.5805(4); MSA 27A.5805(4).

7
In their brief in support of the motion, Messrs. Martin

and Hoskow relied on MCR 2.116(C)(7) and (8).

court agreed that the malpractice claim was not timely, and

dismissed the complaint on that basis.8

The Court of Appeals affirmed.9 In a separate opinion,

Judge WHITBECK dissented, expressing the belief that the

malpractice claim had been filed timely.10

Dr. Levy has applied to this Court for leave to appeal.

As indicated, the limitation period for a malpractice

claim is two years.11 The present dispute concerns the date

on which Dr. Levy’s malpractice claim accrued, i.e., the date

on which the two-year period began to run.

To resolve this issue, we turn to MCL 600.5838; MSA

8
Actually, the court dismissed count I on that basis.

The court also granted summary disposition on count II on the

ground that the compliant did not contain specific allegations

of fraud, and thus did not (except insofar as it reiterated

the untimely malpractice claim) state a claim on which relief

can be granted.

9
Unpublished opinion per curiam issued September 17,

1999 (Docket No. 207797).

10
Judge WHITBECK concurred in the affirmance of the

summary disposition of count II.

11
A malpractice claim is barred unless filed within the

two-year period “or within 6 months after the plaintiff

discovers or should have discovered the existence of the

claim, whichever is later.” MCL 600.5838(2); MSA 27A.5838(2).

In light of our disposition of this matter, it is unnecessary

to consider whether the six-month discovery provision is

applicable to this case.

27A.5838.12 That section13 provides that a malpractice claim

“accrues at the time that person discontinues serving the

plaintiff in a professional . . . capacity as to the matters

out of which the claim for malpractice arose, regardless of

the time the plaintiff discovers or otherwise has knowledge of

the claim.” MCL 600.5838(1); MSA 27A.5838(1).

In Morgan v Taylor, 434 Mich 180; 451 NW2d 852 (1990),

this Court explained this “last treatment rule,” from its

development in De Haan v Winter, 258 Mich 293, 296-297; 241 NW

12
Questions of statutory interpretation are decided de

novo. Northern Concrete Pipe, Inc v Sinacola Cos----Midwest,

Inc, 461 Mich 316, 320, n 14; 603 NW2d 257 (1999).

(1) Except as otherwise provided in [MCL

600.5838a; MSA 27A.5838(1), which concerns medical

malpractice], a claim based on the malpractice of a

person who is, or holds himself or herself out to

be, a member of a state licensed profession accrues

at the time that person discontinues serving the

plaintiff in a professional or pseudoprofessional

capacity as to the matters out of which the claim

for malpractice arose, regardless of the time the

plaintiff discovers or otherwise has knowledge of

the claim.

(2) Except as otherwise provided in [MCL

600.5838a; MSA 27A.5838(1), which concerns medical

malpractice], an action involving a claim based on

malpractice may be commenced at any time within the

[two-year limitation period of MCL 600.5805(4); MSA

27A.5805(4)], or within 6 months after the

plaintiff discovers or should have discovered the

existence of the claim, whichever is later. The

burden of proving that the plaintiff neither

discovered nor should have discovered the existence

of the claim at least 6 months before the

expiration of the period otherwise applicable to

the claim shall be on the plaintiff. A malpractice

action which is not commenced within the time

prescribed by this subsection is barred.

923 (1932), through the subsequent codification in MCL

600.5838; MSA 27A.5838 and the statutory amendments enacted as

1986 PA 178.

The plaintiffs in Morgan filed two complaints in 1985,

alleging malpractice in connection with a 1981 optometric

examination. An examination also had been conducted in 1983,

less than two years before the complaints were filed, and the

issue in Morgan was whether “routine, periodic examinations”

extend the limitation period. Resolving the question, this

Court wrote:

In the instant case defendant argues that the

rationale underlying the last treatment rule does

not apply in the context of routine, periodic

examinations. It is contended that there is no air

of truthfulness and trust once the examination is

concluded. We disagree. It is the doctor's

assurance upon completion of the periodic

examination that the patient is in good health

which induces the patient to take no further action

other than scheduling the next periodic

examination.

Particularly in light of the contractual

arrangement which bound defendant and entitled

plaintiff to periodic eye examinations,[14] it cannot

be said that the relationship between plaintiff and

defendant terminated after each visit. The

obligation and responsibility of defendant to

provide glaucoma testing extended beyond the 1981

examination of plaintiff's eyes. We conclude that

defendant did not discontinue "treating or

otherwise serving"[15] plaintiff "as to the matters

14
The patient in Morgan was entitled, under a contract

between his employer and his labor union, to an eye

examination every two years.

15
As one can see in footnote 13, the statute is now

framed only in terms of “serving” the plaintiff. That change

is related to the Legislature’s decision to eliminate the last

out of which the claim for malpractice arose" until

August 18, 1983. Thus, we hold that the claim of

plaintiff is not barred by the statute of

limitations.19

Since the facts here are unique, and the

Legislature has now repealed the last treatment

rule as it applied to medical malpractice,[16] we

limit our holding to the facts of this case.

__________________________________________________

There is no suggestion that this plaintiff returned to

[the optometrist] on August 18, 1983, merely to extend the

statutory period of limitations. Our decision might be

different if there were evidence that such a visit had been made

as a mere artifice to extend the limitations period.

__________________________________________________

[434 Mich 194.]

III

In the present case, the Court of Appeals said that

“[t]he preparation of yearly tax returns is not analogous to

the periodic eye examinations in Morgan v Taylor, 434 Mich

180; 451 NW2d 852 (1990),” since “[e]ach individual tax return

reflects the examination of a discrete, contained body of

information.”

Writing in dissent, Judge WHITBECK disagreed about the

applicability of Morgan. He countered that its analysis of

the statute was “instructive and, in appropriate

circumstances, controlling.” He continued with an analysis

that we find persuasive, and adopt as our own:

treatment rule with respect to medical malpractice claims.

See Morgan, 434 Mich 192, n 17, and MCL 600.5838(1); MSA

27A.5838(1) and MCL 600.5838a; MSA 27A.5838(1) as amended and

enacted, respectively, by 1986 PA 178.

16
See footnote 15.

I consider a faithful application of the legal

principles enunciated in Morgan to control the

issue at hand. A health professional and patient

on the one hand are similarly situated in this

regard to an accountant who provides annual income

tax preparation services and the accountant’s

client. As, under the rationale of the last

treatment rule, a patient was (before the amendment

of § 5838[1] making it inapplicable to medical

malpractice claims) entitled to rely “completely”

on the health professional and not inquire into the

effectiveness of the health professional’s measures

prior to the termination of the relationship, an

accountant’s client is likewise entitled to rely

“completely” on the account’s [sic: accountant’s]

skills and effectiveness until the termination of

the relationship. A patient who attended a

periodic examination and was not diagnosed with any

medical problem was under the rationale of the last

treatment rule provided with an “assurance” of good

health that induced the patient to take no further

action to investigate the pertinent health matters

until the next periodic examination. Likewise, a

client who entrusts preparation of annual tax

returns to an accountant is provided with an

assurance of professional preparation of the tax

returns that induces the client to take no further

action regarding those matters until it is time to

prepare the next year’s tax returns. As discussed

above, accepting the well-pleaded allegations of

the complaint as true, [Home Ins Co v Detroit Fire

Extinguisher Co, Inc, 212 Mich App 522, 527-528;

538 NW2d 424 (1995)], defendants prepared annual

tax returns for plaintiffs from 1974 until

1996--
--encompassing the times of the alleged

professional negligence in preparing the 1991 and

1992 tax returns. Thus, I conclude that, based on

the well-pleaded allegations of plaintiffs’

complaint, under the last treatment rule of

§ 5838(1) as explained in Morgan, plaintiffs’

possible claim did not accrue--
--meaning the statute

of limitations did not begin to run--
--until at least

1996. The complaint in this case was filed in 1997

and thus was plainly within the applicable

limitation period, which was two years as noted by

the majority. Thus, in my view, the trial court

erred by granting summary disposition in favor of

defendants under MCR 2.116(C)(7) based on the

statute of limitations.

I respectfully disagree with the majority’s

attempt to distinguish the “continuing care of one

patient’s set of eyes in Morgan, supra,” from what

the majority describes as “the series of unrelated

tax calculations in this case.” . . . The

touchstone of the analysis in Morgan was the

continuing professional relationship between a

professional and the person receiving the

professional’s services with regard to a particular

subject matter, not any direct connection between

the work performed by the professional at

continuing periodic sessions during that

relationship. The alleged negligence in Morgan

occurred during a glaucoma test on the principal

plaintiff in Morgan at a 1981 eye examination.

Morgan, supra at 182-183. The principal plaintiff

in Morgan did not return to the defendant optical

company for an examination until 1983 for his next

routine eye examination. Id. at 182. There is no

indication in Morgan that the manner in which the

eye examination was conducted in 1983 had any

direct connection to the performance of the 1981

glaucoma test. Nevertheless, the Morgan Court

concluded that, due to the statutory “last

treatment” rule, the statute of limitations with

regard to alleged negligence in the 1981 glaucoma

test did not begin to run on the date it was

performed because of the continuing professional

relationship between the patient and the optical

company.

Similarly, in this case, plaintiff s’ complaint

alleges, without any contrary documentary evidence

in the record, the existence of a continuing

relationship of tax preparer and client that did

not end until 1996. Until the end of that

relationship, for purposes of applying the “last

treatment” rule and thereby ascertaining whether

the statute of limitations bars this suit,

plaintiffs had “no duty to inquire into the

effectiveness of [defendants’] measures” until the

end of the professional relationship. Id. at 188

(citation omitted).3

I note that it may (or may not) be wise for

MCL 600.5838(1); MSA 27A.5838(1) to be amended to

completely abolish the “last treatment” rule.

However, “[t]he wisdom of the provision in question

in the form in which it was enacted is a matter of

legislative responsibility with which the courts

may not interfere.” Morgan, supra at 192, quoting

Melia v Employment Security Comm, 346 Mich 544,

561; 78 NW2d 273 (1956). Our duty is to faithfully

apply the legislatively adopted policy of the “last

treatment” rule to claims of professional

malpractice, other than medical malpractice, not to

attempt to limit that policy by an unduly narrow

application.

__________________________________________________
3
However, I further question the majority’s apparent view

of the preparation of each year’s tax returns as inherently

involving a completely separate transaction on the basis of

“common sense.” Depending on its complexity and the tax

situation of the taxpayer, a given tax return may (or may not)

reflect “the examination of a discrete, contained body of

information.” I think it is fairly well recognized, for

example, that, especially with regard to business income

taxation, certain matters such as depreciation of business

assets and eligibility for certain tax credits often depend on

facts that extend further into the past than the prior tax year.

Thus, from the current state of the record, it is not clear that

each instance of preparation of annual income tax returns by

defendants involved calculations and judgments that lacked any

direct connection to their preparation of income tax returns in

prior years.

__________________________________________________
[Emphasis in original.]

We respectfully disagree with the dissent’s assertion

that this case should be distinguished from Morgan on the

ground that Morgan involved the continuing treatment of the

same set of eyes while this case involves discrete tax

calculations. The basis for our disagreement comes from a

review of the development of the last treatment rule in

Michigan.

Over six decades ago, in De Hann, supra at 296-297, this

Court applied the common-law last treatment rule in holding

that a patient’s claim of professional malpractice for

treatment of a fracture in his leg did not commence to run

“while treatment of the fracture continues” as “[d]uring the

course of treatment plaintiff was not put to inquiry relative

to the treatment accorded him.” Thereafter, codifying what it

wished to have as the last treatment rule, the Legislature, as

part of the Revised Judicature Act, enacted MCL 600.5838; MSA

27A.5838 in its original form:17

A claim based on the malpractice of a person

who is, or holds himself out to be, a member of a

state licensed profession accrues at the time that

person discontinues treating or otherwise serving

the plaintiff in a professional or psuedo
professional capacity as to the matters out of

which the claim for malpractice arose.

This statute constituted not only a codification, but also an

expansion of the common-law last treatment rule. First, the

statute expanded the common-law rule because it applied to a

“member of a state licensed profession” meaning that the last

treatment rule was extended not just to medically licensed,

but to nonmedical state licensed professionals. Moreover, the

statutory language “discontinues treating or otherwise serving

the plaintiff . . . as to the matters out of which the claim

for malpractice arose” extended the last treatment rule of De

Haan to maters other than treating a specific recognized

injury. How broadly to read “the matters out of which the

claim for malpractice arose” was addressed by this Court in

Morgan. There, unlike the situation in De Haan, the plaintiff

was not receiving treatment for a specific ailment, but rather

was receiving periodic eye examinations from the defendants.

This Court held that it was those examinations, not any

The current version of MCL 600.5838(1); MSA

27A.5838(1) is substantively the same, except for its

exclusion of claims of medical malpractice from its

provisions.

injury, that constituted “the matters out of which the claim

for malpractice arose.”18 Using the same reasoning, it is

clear here that plaintiffs, rather than receiving professional

advice for a specific problem, were receiving generalized tax

preparation services from defendants. These continuing

services, just like the continuous eye examinations in Morgan,

to be consistent with the Morgan approach, must be held to

constitute “the matters out of which the claim for malpractice

arose.”19

18
While not articulated in Morgan, we note that its

result seems to find support in the statute’s use of the

plural term “matters” in the phrase “the matters out of which

the claim for malpractice arose.” Plainly, this means that

the statute of limitations for a nonmedical malpractice claim

against a state licensed professional does not begin to run

when the professional has ceased providing services with

regard to a single matter. On the contrary, the statute of

limitations begins to run only when the professional has

ceased providing services as to the broad “matters” out of

which the claim arises. This indicates that a continuing

course of eye examinations (or preparation of income tax

returns) should be considered the “matters” out of which a

claim for malpractice arose for purposes of the statute,

rather than considering the completion of each eye examination

(or tax preparation) to begin running the statute of

limitations with respect to negligence during that singular

matter. In addition, the phrase “discontinues serving” as

used in MCL 600.5838; MSA 27A.5838 should not be ignored or

overlooked. Defendants in this case did not discontinue

serving plaintiffs with regard to accounting matters until

well after the preparation of the 1992 income tax returns.

19
We note that we are reviewing this case in the context

of a motion for summary disposition brought by defendants

under MCR 2.116(C)(7) based on the statute of limitations. In

bringing such a motion, a defendant may, but is not required

to, submit documentary evidence in support of its assertion

that a claim is barred by the statute of limitations. See

Patterson v Kleiman, 447 Mich 429, 432; 526 NW2d 879 (1994).

However, in the present case, defendants have not offered

Finally, the dissent raises the specter of a very long

delayed claim being possible under MCL 600.5838(1); MSA

27A.5838(1) based on the rationale of this opinion. Slip op

at 11. It is certainly true that the last treatment rule as

codified and expanded by MCL 600.5838(1); MSA 27A.5838(1) may

allow suits against non-medical professionals based on alleged

negligence that has occurred much farther in the past than

would be the case absent that statutory provision. However,

for better or worse, we believe that such an extended statute

of limitations is precisely the point of MCL 600.5838(1); MSA

27A.5838(1) as currently enacted. Policy arguments for

changing the statute may be addressed to the Legislature, but

we must endeavor to apply the statute in light of its plain

documentary evidence regarding the nature of the professional

services that were provided by defendants to plaintiffs. As

Judge WHITBECK stated below, in the absence of any documentary

evidence on a point, in reviewing a summary disposition motion

under MCR 2.116(C)(7) we must accept the well-pleaded

allegations in a complaint as true. Plaintiffs alleged that

defendants prepared their income tax returns from 1974 to

1996. Defendants have failed to present any evidence that

this is untrue—or that each income tax preparation was a

discrete transaction that should be considered to separately

constitute “the matters out of which the claim for malpractice

arose,” MCL 600.5838(1); MSA 27A.5838(1), for purposes of the

last treatment rule. Accordingly, we conclude that defendants

have not established that plaintiffs’ claims are barred by the

statute of limitations. We note that the result may have been

different if defendants had come forward with documentary

evidence that each annual income tax preparation was a

discrete transaction that was in no way interrelated with

other transactions. Accordingly, this opinion does not mean,

for example, that if an accountant prepared income tax returns

for a party annually over a period of decades, the statute of

limitations for alleged negligence in preparing the first of

these tax returns would not run until the overall professional

relationship ended.

language, well-established principles of statutory

construction, and this Court’s prior construction of the

statute in Morgan.20

For these reasons, we reverse in part the judgments of

the circuit court and the Court of Appeals.21 We remand this

case to the circuit court for further proceedings on the

plaintiffs’ malpractice claim against the defendants. MCR

7.302(F)(1).

KELLY , TAYLOR , CORRIGAN , and YOUNG , JJ., concurred.

CAVANAGH , J., concurred in the result only.

20
It is to be recalled that neither the majority nor the

dissent challenges the soundness of the Morgan rationale.

21
We have reviewed the plaintiffs’ other claims on

appeal, including his contention that the circuit court erred

in granting summary disposition on count II of the complaint,

and we are not persuaded that additional relief should be

granted.

S T A T E O F M I C H I G A N

SUPREME COURT

MARTIN I. LEVY and

MARTIN I. LEVY, DDS, P.C.,

Plaintiffs-Appellants,

v No. 115603

MARK L. MARTIN, GERALD HOSKOW,

and HOSKOW & MARTIN, P.C.,

Defendants-Appellees.

_________________________________

MARKMAN, J. (dissenting).

I respectfully disagree with and dissent from the

majority’s conclusion that the “last treatment” rule served to

keep plaintiff’s professional malpractice action viable in

this case.1 Rather, I believe that the Court of Appeals

correctly affirmed the trial court’s grant of summary

disposition in defendants’ favor.

From the very limited record in this case, it appears

that defendants were hired by plaintiffs to act as their

personal and corporate accountants. Defendants prepared

plaintiffs’ annual tax returns for the years 1974 through

I concur with the majority’s determination that

plaintiff’s other claims on appeal are not worthy of

additional relief.

1996, a period of twenty-two years. Plaintiffs’ 1991 and 1992

tax returns were audited by the Internal Revenue Service (IRS)

in 1994, with the IRS presenting plaintiffs with a notice of

deficiency in December 1995. Plaintiffs subsequently filed a

two-count complaint against defendants in August 1997,

alleging professional negligence and fraud.

In lieu of answering plaintiffs’ complaint, defendants

filed a motion for summary disposition under MCR 2.116(C)(7)

(expiration of the applicable limitation period) and (8)

(failure to state a claim). The circuit court granted

defendants’ motion, and the Court of Appeals affirmed, with

Judge WHITBECK dissenting.

This Court reviews the grant or denial of summary

disposition de novo. Maiden v Rozwood, 461 Mich 109, 118; 597

NW2d 817 (1999). Similarly, we review questions of statutory

construction de novo as a matter of law. Sands Appliance

Services, Inc v Wilson, 463 Mich 231, 238; 615 NW2d 241

(2000); Donajkowski v Alpena Power Co, 460 Mich 243, 248; 596

NW2d 574 (1999).

The essential question in this case is: When did

plaintiffs’ claim of professional malpractice accrue for

purposes of applying the pertinent limitation period? MCL

600.5805; MSA 27A.5805 provides that

[a] person shall not bring or maintain an action to

recover damages for injuries to persons or property

unless, after the claim first accrued to the

plaintiff or to someone through whom the plaintiff

claims, the action is commenced within the periods

of time prescribed by this section.

* * *

(4) Except as otherwise provided in this chapter,

the period of limitations is 2 years for an action

charging malpractice.

With regard to the time of accrual of a professional

malpractice claim, other than one for medical malpractice,2

MCL 600.5838(1); MSA 27A.5838(1) states that

a claim based on the malpractice of a person who

is, or holds himself or herself out to be, a member

of a state licensed profession accrues at the time

that person discontinues serving the plaintiff in a

professional or pseudoprofessional capacity as to

the matters out of which the claim for malpractice

arose, regardless of the time the plaintiff

discovers or otherwise has knowledge of the claim.

[Emphasis added.]

An action involving a claim based on professional

malpractice (other than medical malpractice) may be commenced

at any time within the applicable period prescribed in MCL

600.5805(4); MSA 27A.5805(4), or within six months after the

plaintiff discovers or should have discovered the existence of

the claim, whichever is later. MCL 600.5838(2); MSA

27A.5838(2). A malpractice action that is not commenced

within the time prescribed by this subsection is barred. Id.

The cardinal rule of statutory construction is to

identify and give effect to the intent of the Legislature.

The accrual of a medical malpractice claim is

determined pursuant to MCL 600.5838a; MSA 27A.5838(1).

Helder v Sruba, 462 Mich 92, 99; 611 NW2d 309 (2000). The

first step in discerning intent is to examine the language of

the statute. Id. If the language of a statute is clear and

unambiguous, the plain meaning of the statute reflects the

legislative intent and judicial construction is not permitted.

Western Michigan Univ Bd of Control v Michigan, 455 Mich 531,

538; 565 NW2d 828 (1997). “Each word of a statute is presumed

to be used for a purpose, and, as far as possible, effect must

be given to every clause and sentence.” Robinson v Detroit,

462 Mich 439, 459; 613 NW2d 307 (2000).

In Michigan, the “last treatment” rule originated in De

Haan v Winter, 258 Mich 293; 241 NW2D 923 (1932). At that

time, the limitations statute contained no provision fixing

the accrual point of a malpractice action. As in the present

case, the De Haan Court was faced with the question:

When did plaintiff’s cause of action accrue?

Until treatment of the fracture ceased the relation

of patient and physician continued, and the statute

of limitations did not run. [Citations omitted.]

While decisions are not in accord upon this

question, we are satisfied that in such an action

as this the statute of limitations does not

commence to run while treatment of the fracture

continues. Failure to give needed continued care

and treatment, under opportunity and obligation to

do so, would constitute malpractice. During the

course of treatment plaintiff was not put to

inquiry relative to the treatment accorded him.

[Id. at 296-297 (emphasis added).]

The legislative comment accompanying the 1961 enactment of §

5838, indicates that “[s]ection 5838 is based on the rule

stated and followed in the Michigan case of De Haan.” Morgan

v Taylor, 434 Mich 180, 187, n 13; 451 NW2d 852 (1990).3

“The rationale for the last treatment rule has been

explained on grounds that the patient, while his treatment

continues, ‘relies completely on his physician and is under no

duty to inquire into the effectiveness of the latter’s

measures.’” Id. at 187-188 (emphasis added). I believe it is

important to reiterate the facts of Morgan, a medical

malpractice case. In Morgan, the plaintiff was an employee of

D.W. Zimmerman Company and a member of United Auto Workers

(UAW) Local 417. Zimmerman and the UAW contracted with the

defendant Cooperative Optical Services, Inc. (COS); under the

contract, each covered employee was entitled to an eye

examination every two years. The plaintiff received eye

examinations by COS staff in 1976, 1978, and on March 7, 1981,

and August 18, 1983. Id. at 182. During the plaintiff’s

March 1981 examination, a test for glaucoma indicated

intraocular pressure beyond the normal range. However, the

COS optometrist failed to take any further action. During

the plaintiff’s August 1983 examination, abnormal intraocular

pressure was again detected and the plaintiff was referred to

The “last treatment” rule announced in De Haan v

Winter, supra at 241, was codified in 1961 PA 236, the Revised

Judicature Act of 1961, MCL 600.5838; MSA 27A.5838. The rule

was later amended by 1975 PA 142, and later repealed, as to

medical malpractice actions, by 1986 PA 178.

an ophthalmologist, who determined that the plaintiff had

incurred irreversible nerve damage due to the abnormal

pressure. Id. at 183. The plaintiff sued, and the trial

court found that the August 1983 examination amounted to “a

continuation of treatment or services” within the meaning of

MCL 600.5838(1); MSA 27A.5838(1); thus, the plaintiff’s claim

of malpractice “was not barred by the statute of limitations

because it had been filed within two years of the date the

action accrued.” Id. at 184.

In the present case, the majority relies on the Court of

Appeals dissent, which in turn relied on this Court’s analysis

in Morgan, supra. Respectfully, I disagree with the dissent’s

assertion that “[t]he touchstone” of the “last treatment” rule

is the “continuing professional relationship between a

professional and the person receiving the professional’s

services . . . .” Unpublished opinion per curiam, issued

September 17, 1999 (Docket No. 207797)(WHITBECK , J., concurring

in part and dissenting in part), slip op at 4 (emphasis in the

original).

The plain language of subsection 5838(1) does not state

that a claim of professional malpractice accrues on the last

date of service (i.e., “last date of treatment”), period.

Rather, the statutory language clearly defines the point of

accrual, confining the last date of service expressly to those

matters “out of which the claim for malpractice arose”; from

this language, certainly, a professional relationship may

continue on even though a malpractice claim arising out of

that relationship has accrued and the clock has started to run

with regard to the two-year limitation period. The Court of

Appeals dissent and the majority’s adoption of the dissent’s

analysis without explanation fail to acknowledge and give

effect to the plain language of the entire sentence comprising

subsection 5838(1), thereby rendering the modifying phrase

“matters out of which the claim for malpractice arose”

superfluous.

The majority asserts that, in enacting § 5838, the

Legislature “extended” or “expanded” upon the common-law “last

treatment” rule set forth in De Haan. See slip op at 10.

However, in my judgment, the legislative comment that § 5838

“is based on the rule stated and followed in the Michigan case

of De Haan” effectively militates against the majority’s

assertion. The facts in De Haan involved a distinct period of

medical treatment, relating to a distinct medical condition,

with this Court concluding that a claim of professional

malpractice, arising “[d]uring the course of [that]

treatment,” would not be barred by the limitation period as

long as that particular course of treatment, for that

particular medical condition, continued. Id. at 297.

Specifically, De Haan did not determine that once the

treatment of the plaintiff’s fracture ceased, his claim of

professional malpractice, arising out of the treatment for the

fracture, remained viable as long as a physician-patient

relation continued.

The phrase “as to the matters out of which the claim for

malpractice arose,” found in subsection 5838(1), clearly

equates with the phrases “[u]ntil treatment of the fracture

ceased” and “[d]uring the course of treatment” found in De

Haan. Id. at 296, 297. Moreover, Morgan refers to the De

Haan language “while . . . treatment continues” in attempting

to explain the rationale for the “last treatment” rule. 434

Mich 187. Importantly, this Court, in determining that the

facts of Morgan were “unique,” limited its holding to the

facts of that case. Id. at 194. Thus, I can discern no

logical force to the suggestion that the Legislature intended

to broaden the common-law “last treatment” rule, as stated and

applied in De Haan, when it drafted the language of § 5838.

Further, the facts in the present case, although very

sparse for purposes of appellate review, are nevertheless

quite distinguishable from the facts found in Morgan, supra.

In Morgan, there was a requirement under an employer/union

contract that the plaintiff be given an opportunity to have

his eyes examined and reevaluated every two years.4 Granted,

I find the existence of a contractual agreement in

Morgan a highly distinguishable fact not present in the

instant case. I believe that this Court, in Morgan, also

(continued...)

there may have been changes that occurred in the plaintiff’s

eyes between visits, but it would be necessary to address

these changes in the context of the condition of the

plaintiff’s same eyes, determined at the last visit and every

visit before that. There was certainly an interrelation, even

an interdependency, between one eye examination and the next

because the same eyes were being examined each time.

However, plaintiffs’ annual tax returns in the present

case cannot be considered analogous to the plaintiff’s eyes in

Morgan. The preparation of annual tax returns involves the

compilation and computation of a distinct and discrete body of

information, generally not the same from year to year. In

other words, in each successive year, a client is not bringing

to his accountant the same aggregation of receipts to be

reevaluated and reexamined, to discern if some change has

taken place in that particular body of information and data.

Rather, the client generally brings in a new aggregation of

receipts specific and distinct to the year for which the tax

return is being completed. An accountant is generally not

4
(...continued)

considered the contractual agreement to be of peculiar

importance in reaching its decision:

Particularly in light of the contractual

arrangement which bound defendant and entitled

plaintiff to periodic eye examinations, it cannot

be said that the relationship between plaintiff and

defendant terminated after each visit. [Id. at 194

(emphasis added).]

“caring for” the client’s same tax return from year to year,

as a physician cares for the same set of eyes, or the same

liver, kidneys, or heart, from examination to examination.

Thus, in the present case, each successive annual tax return

represented “the matters out of which the claim for

malpractice arose,” a phrase to which the Court of Appeals

dissent and the majority here give little apparent effect.

Further, I do not share the Court of Appeals dissent’s

concern that “with regard to business income taxation, certain

matters such as depreciation of business assets and

eligibility for certain tax credits often depend on facts that

extend further into the past than the prior tax year.” Slip

op at 5, n 3. While such an assertion may or may not be

accurate, the important factor is that the body of information

and data used each successive year to compile, compute, and

prepare an income tax return is not the same; it is not

analogous to the same set of eyes or the same liver or the

same heart that is examined and evaluated by a physician at

each office visit. The fact that there may be some common

information that is used in preparing an annual income tax

return does not change the fact that it is used in conjunction

with an entirely different and distinct amalgam of information

and data collected specifically for each year for which the

tax return is being prepared, an amalgam representing the

“matters out of which the claim for malpractice [may arise]”

for purposes of establishing the claim’s accrual date.

Subsection 5838(1).5

In the present case, the only allegations specifically

made by plaintiffs, in bringing their claim of malpractice,

are that: (1) the professional relationship with defendants

existed from 1974-1996, (2) the IRS audited the annual returns

in two of those years, 1991-92, and (3) pursuant to this

audit, plaintiffs were assessed additional taxes for these two

years. Plaintiffs here presented no allegations that any of

the individual annual tax returns completed by defendants over

the twenty-two-year professional relationship contained any

information or data that carried over from one year to the

next, or that each annual tax return was not otherwise

separate and distinct.

However, the majority here would place the burden upon

the defendant to come forward, in bringing a motion for

summary disposition pursuant to MCR 2.116(C)(7), with

additional evidence establishing that the entirety of the

professional relationship did not consist of “the matters out

of which the claim for malpractice arose,” in order to prevail

against a plaintiff’s assertion that the claim for malpractice

did not accrue until the end of the professional relationship.

Slip op at 12 n 19. I do not agree with this allocation of

the burden in the application of subsection 5838(1). Under

the majority’s approach, it appears that as long as a

plaintiff pleads the existence of a professional relationship,

“the matters out of which the claim for malpractice arose”

will be presumed to consist of the entire duration of the

relationship, a presumption which, in my judgment, runs

contrary to the statutory language of subsection 5838(1).

The majority’s argument would be more compelling if the

instant matter involved the treatment of, or the provision of

service to, the same eyes, the same pancreas, the same heart,

or any other object or transaction that is treated or serviced

on a continuing or interrelated basis. Thus, arguably it may

be incumbent upon a defendant, when faced with a professional

malpractice action involving such an object or transaction, to

come forward with additional evidence demonstrating that one

provided treatment or service was distinct from another. But

here, in my judgment, the individual annual tax returns cannot

truly be equated with the same set of eyes, pancreas, heart,

or other object or transaction that is treated or serviced on

a continuing or interrelated basis. Thus, I believe that it

is the plaintiff’s burden, not the defendant’s, to set forth

(continued...)

In the present case, the “matters out of which

[plaintiffs’] claim for malpractice arose” involved

defendants’ preparation of their 1991 and 1992 income tax

returns. Thus, under the plain language of subsection

5838(1), plaintiffs’ claim of professional malpractice

accrued, and the two-year limitation period began to run, when

defendants worked their last day with regard to these distinct

returns. Even assuming that defendants worked on plaintiffs’

1992 tax return through December 1993, plaintiffs’ cause of

action for malpractice was barred by subsection 5805(4) on the

last day of December 1995. Plaintiffs’ complaint was not

filed until August 1997.6

5
(...continued)

well-pleaded allegations evidencing that there existed some

connection between treatments or services occurring within the

professional relationship.

In stating that “it is clear here that plaintiffs, rather

than receiving professional advice for a specific problem,

were receiving generalized tax preparation services from

defendants,” slip op at 11-12, the majority gainsays the

discrete nature of each individual annual tax return prepared

by defendant, and essentially considers the termination of the

professional relationship itself (i.e., the end of plaintiffs

“receiving generalized tax preparation services”) as the point

at which plaintiffs’ claim for malpractice accrued. The

statutory phrase “as to the matters out of which the claim for

malpractice arose” is, thus, given little effect. Essentially

then, my concerns about the majority’s allocation of the

burdens in (C)(7) motions parallel my larger concerns about

the majority’s focus upon the professional relationship in a

malpractice action rather than upon the “matters out of which

the claim for malpractice arose.”

I do not believe it is necessary to elaborate on the

(continued...)

The Court of Appeals dissent’s analysis, and the

majority’s reliance on this analysis, effectively erode the

policy bases for having statutory limitation periods in the

first place. Obviously, while one policy base is to afford

plaintiffs a reasonable opportunity to bring suit, statutes of

limitation are also intended to: (1) compel the exercise of a

right of action within a reasonable time so that the opposing

party has a fair opportunity to defend; (2) relieve a court

system from dealing with stale claims, where the facts in

dispute occurred so long ago that evidence was either

forgotten or manufactured; and (3) protect potential

defendants from protracted fear of litigation. Chase v Sabin,

445 Mich 190, 199; 516 NW2d 60 (1994).

Asserting, as the Court of Appeals dissent does in the

present case, that the termination of the professional

relationship is the beginning and end of the analysis in

determining when a professional malpractice claim has accrued,

tolls the limitation period in a potentially large number of

professional malpractice cases, pending the ultimate and final

termination of the professional relationship. Under the

6
(...continued)

six-month discovery rule of MCL 600.5838(2); MSA 27A.5838(2).

Plaintiffs knew as early as December 1995, when they received

the IRS deficiency notice, that a possible cause of action

existed against defendants. See Solowy v Oakwood Hosp Corp,

454 Mich 214, 223; 561 NW2d 843 (1997)(once a plaintiff is

aware of an injury and its possible cause, the plaintiff is

equipped with the necessary knowledge to preserve and

diligently pursue his claim).

majority’s interpretation of subsection 5838(1), a

professional relationship may exist for one hundred years; if,

perchance, malpractice was committed in the very first year of

the relationship, a claim could potentially remain viable for

another 101 years. Certainly, a reasonable time would have

long since passed, thereby undermining the opposing party’s

ability to defend such a stale claim, extending the potential

defendant’s apprehension of litigation to unreasonable and

unacceptable lengths, and unnecessarily burdening the judicial

system with claims so stale as to be virtually untriable. See

Chase, supra.

In enacting § 5838, it is reasonable to conclude that

the Legislature addressed the conflict between the accrual of

a simple tort claim, which generally involves but a single act

or omission, and the accrual of a professional malpractice

claim, where actual malpractice may occur within an extended,

but nevertheless distinct, period of continuing professional

service.7

7
For example, in 1990, Mr. Smith is sued in a

premises liability action. He retains Lawyer Jones for the

purpose of legal representation. Because he is an extremely

busy professional, Lawyer Jones overlooks the issue of

personal jurisdiction in the action against Mr. Smith, fails

to object to the clear absence of such jurisdiction, and,

instead, files an answer on Mr. Smith’s behalf, effectively

waiving the issue. After extended discovery, the litigation

proceeds to trial and ultimately, in 1995, to a large jury

verdict against Mr. Smith. Lawyer Jones persuades Mr. Smith

to appeal the verdict and Mr. Smith consents. During the

pendency of the appeal process, Mr. Smith, in 1996, is

(continued...)

The “matters out of which [plaintiffs’] claim for

7
(...continued)

involved in an automobile accident and is sued by a person who

was a passenger in the car with which Mr. Smith collided. Mr.

Smith again retains Lawyer Jones to represent his legal

interests in this second case. In 1997, the Michigan Court of

Appeals affirms the 1995 jury verdict against Mr. Smith and he

satisfies himself that further appeal is futile. The 1996

automobile accident lawsuit involves protracted litigation and

continues into 2001 when it is finally set for trial.

Fortunately for Mr. Smith, a jury, in 2002, returns a verdict

of no cause of action regarding the 1996 automobile accident

lawsuit.

Before the enactment of § 5838, the general tort statute

of limitation would have applied, and Mr. Smith’s claim

against Lawyer Jones, for failing to object to personal

jurisdiction in the first lawsuit, would have accrued in 1990,

at the time the malpractice occurred, MCL 600.5827; MSA

27A.5827, and the limitation period would have run three years

after the actual act of malpractice. MCL 600.5805(9); MSA

27A.5805(9). However, after the enactment of § 5838, in

applying the plain language of this statute to this example,

Mr. Smith’s malpractice claim would have accrued in 1997, at

the end of Lawyer Jones’ representation of Mr. Smith in the

1990 premises liability action; the limitation period would

have run two years later. MCL 600.5805(5); MSA 27A.5805(5).

A second example might involve a patient visiting a

dentist on five separate occasions for the purpose of

repairing a tooth. In the course of this treatment, a root

canal is necessary, and the dentist negligently damages the

nerve that serves the tooth, causing severe and chronic jaw

pain. The purpose of subsection 5838(1), prior to the

enactment of § 5838a, would be served in its application

because there would be no necessity to parse out the visits,

thereby placing an extremely confusing burden on the parties

or factfinder, to identify which specific visit resulted in

the negligently provided treatment. It would only be

necessary to examine the entire sequence of events, regarding

that course of treatment, to determine the accrual date of the

plaintiff’s claim of professional malpractice.

Thus, a very different result is obtained under the facts

of either example when the plain language of subsection

5838(1) is applied, compared with the result obtained under

the general tort statute of limitation.

malpractice arose” involved defendants’ preparation of

plaintiffs’ 1991 and 1992 income tax returns. Pursuant to the

plain language of subsection 5838(1), the last date on which

defendants worked in preparing such returns was the date on

which plaintiffs’ claim `for professional malpractice accrued

for purposes of the running of the statute of limitations.

Because plaintiffs failed to file their complaint until well

after the applicable two-year limitation period had run, their

claim for professional malpractice, in my judgment, was time

barred and the circuit court properly granted summary

disposition in favor of defendants in this case. I would,

therefore, affirm.

S T A T E O F M I C H I G A N

SUPREME COURT

MARTIN I. LEVY and

MARTIN I. LEVY, D.D.S., P.C.,

Plaintiffs-Appellants,

v No. 115603

MARK L. MARTIN, GERALD HOSKOW,

and HOSKOW & MARTIN, P.C.,

Defendants-Appellees.

________________________________

WEAVER, C.J. (dissenting).

I would grant leave to appeal in this case because I

believe the issue presented needs oral argument.