XO. 82-456
I ? J THE SUPREME COURT O F TIIE STATE O !O T TJ
F f N A ,A
1983
LYLE BURGETT,
P l a i n t i f f and A p p e l l a n t ,
--vs-
PATRICK FLAHERTY,
Defendant and Respondent.
Appeal f r o n : D i s t r i c t Court of t h e F i r s t J u d i c i a l P i s t r l c t ,
I n a n d f o r t h e County o f Lewis & C l a r k ,
The H o n o r a b l e Gordon R . B e n n e t t , J u d g e p r e s i d i n g .
Counsel of Record:
For Appellant:
Brad Z . E e l k e , B u t t e , Montana
For Respondent:
C r e s a p S, McCracken, G r e a t F a l l s , Nontana
S u b m i t t e d on B r i e f s : F e b r u a r y 17, l9Y3
Decided: May 1 9 , 1 9 8 3
Filed: MAY 1 9 4983
-- --* -
Clerk
Mr. Justice Frank B. Morrison, Jr. delivered the Opinion
of the Court.
The First Judicial District Court entered summary
judgment in favor of Patrick Flaherty in a legal malpractice
action brought by Lyle Burgett. Burgett appeals.
Burgett contends the District Court erred in concluding
his claim for relief was barred by the statute of limitations
and the doctrine of collateral estoppel.
The collateral estoppel issue need not be reached as the
factual allegation to which it applied, malpractice based on
entry of an "illegal" dissolution decree, is properly barred
by Section 27-2-206, MCA. However, because the record
reveals a triable issue of fact as to when Burgett knew about
the allegedly unauthorized detention of his guns by Flaherty
or their loss as a result of Flaherty's alleged negliqence,
we vacate the summary judgment order and remand this cause
for a determination of the accrual date of Burgett's claim(s)
for relief.
The allegations out of which this cause of action arose
regard Flaherty's representation of Burgett in a dissolution
proceeding. Burgett employed Flaherty after he was served
with dissolution papers on August 15, 1978. At that time
Burgett was in Warm Springs State Hospital awaiting mental
evaluation for a pending criminal proceeding. On August 23,
1978 Flaherty appeared on Burgett's behalf before the Fifth
Judicial District Court in a show cause hearing. According
to court minutes, Flaherty told the court Burgett did not
contest the dissolution but would contest property and child
support issues. After hearing testimony from Deanne Burgett,
the District Court granted dissolution of the marriage.
On October 11, 1978, the district court judge signed and
filed a decree of dissolution back dated to August 23, 1978;
jurisdiction over property and child support issues was
retained by the court.
On January 3, 1979, the parties and their respective
counsel, Flaherty and Russell A. LaVigne, met regarding
property and child support matters. The meeting produced a
property and child support agreement which was entered into
by the parties on January 26, 1979. The agreement provided,
in part, that five guns owned by Burgett would be placed in
Flaherty's custody to be held "in trust" for a period of one
year. The agreement further provided for appraisal of their
properties in Whitehall and Butte and the eventual purchase
of Burgett's equity therein by Deanne. On September 21,
1979, the District Court approved the agreement between the
parties. Six months later the parties stipulated to sale of
the Whitehall property. This was the last document whereon
Flaherty's name appeared as counsel for Burgett. In
subsequent proceedings to modify the dissolution decree, Brad
Belke, counsel of record herein, represented Burgett.
The instant complaint, wherein Burgett claims damages
for Flaherty's alleged failure to exercise due diligence and
reasonable skill on behalf of his client during the rendition
of his services in the dissolution matter, was filed on
January 18, 1982. The malpractice action was premised on
three acts, errors or omissions committed by Flaherty,
including (1) that Flaherty stipulated to an "illegal"
divorce decree on August 23, 1978, in violation of Section
40-4-105f3), MCA, and Burgett's express instructions to delay
the dissolution proceeding pending his release from Warm
Springs; (2) that Flaherty failed to return the five guns
placed in his possession under the 1979 property settlement
agreement, even though two court orders had been entered
directing him to do so; and (3) that Flaherty attempted to
purchase Burgett's property, then valued in excess of
$20,000.00, from him for $500.00 and his outstanding bill.
Flaherty answered, denying allegations of professional
negligence, and asserted, inter alia, the affirmative
defenses of statute of limitations, based on Sections
27-2-206, 207, 211, MCA, and collateral estoppel. The
District Court granted summary judgment in favor of Flaherty
after reviewing the pleadings, affidavits, answers to
interrogatories, and admissions on record. The court
concluded that Section 27-2-206, MCA, barred Burgett's
asserted malpractice claim, Section 27-2-207, MCA, barred the
claim for conversion of the guns, and Section 27-2-211, MCA,
barred the punitive damage aspect of the malpractice claim.
Additionally, the District Court concluded that Burgett's
"notion of damages flowing from an illegal divorce in August,
1978" previouslv had been presented to but rejected by the
district court judge who presided over the dissolution
proceeding.
Section 27-2-206, MCA, provides, in pertinent part,
that F
"An action against an attorney . . .
based upon the
person's alleged professional negligent act or for
error or omission in the person's practice must be
commenced within 3 years after the plaintiff
discovers or through the use of reasonable
diligence should have discovered the act, error, or
omission, whichever occurs last, but in no case may
the action be commenced after 10 years from the
date of the act, error, or omission."
Burgett argues that there is a genuine issue of fact as
to when he discovered Flaherty's alleged acts of malpractice,
therefore, it was improper to enter summary judgment based on
Section 27-2-206, MCA. Burgett maintains that discovery of
Flaherty's alleged acts, errors or omissions constituting
malpractice, did not occur until November, 1980, less than
three years before the complaint was filed. Evidently that
was when Burgett met with his present attorney and reviewed
the circumstances of his case.
As a matter of law, what is critical in determining when
a legal malpractice action accrues is knowledge of the facts
essential to the cause of action, not knowledge of the legal
theories upon which an action may be brought. McGee v.
Weinberg (Cal. App. 1979) 97 Cal. App.3d 798, 159 Cal.Rptr.
California's statute of limitations for legal
malpractice is not identical to Section 27-2-206, MCA, but
for the purpose of the discovery argument advanced by
Surgett, its interpretation by the California Court of
Appeals is persuasive.
"The question here is whether appellant's alleged
ignorance of her supposed rights against her former
attorney is sufficient to toll the statute of
limitations.
"The statute of limitations is not tolled by
belated discovery of legal theories, as
distinguished from belated discovery of facts. In
legal and medical malpractice cases, the courts are
often confronted with such claims that the statute
of limitations has been tolled. However, the
Supreme Court repeatedly has explained that it is
the knowledge of facts rather than discovery of
legal theory, that is the test. The test is
whether the plaintiff has information of
circumstances sufficient to put a reasonable person
on inquiry, or has the opportunity to obtain
knowledge from sources open to his or her
investigation. (Sanchez v. South Hoover Hospital,
18 Cal.3d 93, 101, 132 Cal.Rptr. 657, 553 P.2d.
1129.) If the plaintiff believes that someone has
done something wrong because of the damages
suffered by her, such a fact is sufficient to alert
a plaintiff 'to the necessity for investigation and
pursuit of her remedies.' (Sanchez v. South Hoover
Hospital, supra, 18 Cal.3d at p. 102, 132 Cal.Rptr.
at p. 663, 553 P.2d at p. 1135.)"
McGee, supra, 97 Cal. App.3d at 803, 159 Ca1,Rptr. at 89-90.
(Emphasis in original.)
It was incumbent on Burgett to commence his legal
malpractice action within 3 years after he discovered, or
through use of reasonable diligence should have discovered,
Flaherty's alleged professional negligent acts, errors or
omissions. Because his claim for relief essentially is based
on three separate acts which occurred during the course of
Flaherty's representation of Burgett, each act must be
addressed separately in terms of the date of its discovery.
We note that Section 27-2-206, MCA does not suspend accrual
until the "attorney-client" relationship has been terminated.
Compare, Cal.Code.Civ.Pro. $340.6(a) (2).
I. Entry of "Illegal" Dissolution Decree.
- Flaherty committed a professionally negligent act in
If
"stipulating" to the entry of a dissolution decree within 20
days of service of process, that act occurred August 23,
1978. Without dispute the record discloses that Burgett had
actual knowledge of that act sometime during the fall of that
year. Burgett knew that his marriage had been dissolved,
that the dissolution was granted during the August 23rd
hearing at which Flaherty represented him, and that the
dissolution was contrary to his wishes. Thus, more than
three years before the complaint was filed, Burgett had
actual knowledge of sufficient facts to put him on inquiry
that Flaherty may have committed a professionally negligent
act. For purposes of the summary judgment motion, any claim
for damages based on the alleged "illegal" divorce decree
expired prior to January 18, 1982; the precise date of
accrual need not be determined because it is not a close
question.
11. Five Guns.
As to the second act of alleged malpractice, the
unauthorized detention and/or loss of Burgett's guns by
Flaherty, the record discloses insufficient evidence to
determine when such act (s) were committed or discovered.
Flaherty admitted that he gave three guns to one person, a
fourth he sold to another, and the fifth was stolen while in
the possession of a third person. The only evidence of
record regarding the date of any such acts or transactions is
that, to the best of Flaherty's recollection, the theft
occurred within "the first third of calendar year 1979."
Burgett merely admits to placing the five guns in Flaherty's
possession pursuant to the January, 1979, property settlement
agreement.
Under Rule 56(c), M.R.Civ.P., summary judgment is only
proper where the record discloses no genuine issue of
material fact and the moving party is entitled to judgment as
a matter of law. Reaves v. Reinbold (1980) Mont . I
615 P.2d 896, 37 St.Rep. 1500. On the basis of the record
before the District Court, Flaherty was not entitled to
judgment as a matter of law. Facts material to determination
of the statute of limitations issue are not contained in the
record.
If Burgett's claim for relief is characterized as one
for professional negligence, before the conclusion can be
made that Section 27-2-206, MCA bars any recovery, the dates
of the alleged acts, and their discovery, must be
established.
If Burgett's claim is characterized as one for
conversion, the date critical to application of Section
27-2-207, MCA, is when Burgett demanded return of the guns
and Flaherty refused his demand. Where the defendant comes
into the possession of property rightfully, the statute of
limitations begins to run when the defendant refuses upon
demand to return the property. Interstate Mfg. Co. v.
Interstate Prod-ucts (1965) 146 Mont. 449, 408 P.2d 478, and
cases cited therein.
111. Attempt to Purchase Property.
If Flaherty committed any act of malpractice as a result
of his alleged attempt to purchase Burgett's property, the
record fails to disclose with specificity when it occurred.
Absent a specific date in 1979, one cannot properly conclude
that any claim for relief based on such allegation is
foreclosed by Section 27-2-206, MCA.
The summary judgment is vacated and this cause is
remanded to the District Court for further proceedings
consistent with this opinion.
We concur: