Christine Ragar v. R. J. Brown and Crockett and Brown

Annotate this Case
1Christine RAGAR v. R.J. BROWN and 
Crockett and Brown

96-1202                                            ___ S.W.2d ___

                    Supreme Court of Arkansas
                Opinion delivered March 12, 1998


1.   Judgment -- summary judgment -- moving party's burden. -- Summary
     judgment is reserved for cases that have no genuine factual
     disputes; the moving party bears the burden of sustaining a
     motion for summary judgment; once the moving party meets this
     burden, the opposing party must present proof with proof and
     demonstrate that a material issue of fact survives; the
     appellate court views the evidence in a light most favorable
     to the opposing party and resolves all questions and
     ambiguities against the moving party; the appellate court must
     review the evidence presented below to determine whether the
     trial court ruled correctly.

2.   Judgment -- summary judgment -- proper when statute of limitations bars
     action. -- Summary judgment is proper when the statute of
     limitations bars the action.

3.   Judgment -- summary judgment -- affirmed when plaintiff admits dispositive
     fact. -- The appellate court will affirm a summary judgment
     when the plaintiff admits a dispositive fact.

4.   Limitation of actions -- three-year period applies to legal-malpractice
     actions. -- The three-year limitations period set forth in Ark.
     Code Ann.  16-56-105 (1987) for actions based in contract or
     liability, including unwritten breaches of duty, applies to
     legal-malpractice actions.

5.   Limitation of actions -- malpractice -- when cause of action accrues --
     three approaches. -- There are at least three common approaches
     used to determine when a cause of action for malpractice
     accrues: (1) the "occurrence rule"; (2) the "damage rule" or
     "injury rule" and a variation called the "discovery rule"; and
     (3) the "termination-of-employment rule," also named the
     "continuing-representation rule." 

6.   Limitation of actions -- malpractice -- occurrence rule -- adhered to in
     Arkansas. -- Arkansas has adhered to the traditional occurrence
     rule in legal-malpractice cases since 1877; under this
     minority rule, the malpractice action accrues when the last
     element essential to the cause of action occurs, unless the
     attorney actively conceals the wrongdoing; the rationale is to
     prevent attorneys from having to defend stale claims, to
     preserve evidence, and to treat all plaintiffs equally.

7.   Limitation of actions -- malpractice -- damage rule. -- Under the
     damage rule, now the majority rule, the statute of limitations
     begins to run at the time the plaintiff is injured or suffers
     damages.  

8.   Limitation of actions -- malpractice -- discovery rule. -- The discovery
     rule delays the accrual of the actionable negligence until the
     plaintiff discovers, or reasonably should have discovered, the
     malpractice.

9.   Limitation of actions -- malpractice -- occurrence rule -- exception. --
     The supreme court has recognized an exception to the
     occurrence rule that effectively tolls the statute of
     limitations whenever the plaintiff is prevented from bringing
     his or her malpractice claim. 

10.  Limitation of actions -- malpractice -- discovery rule not adopted in case
     law. -- The supreme court refuted appellant's claim that it had
     adopted the discovery rule.

11.  Limitation of actions -- malpractice -- damage rule explicitly rejected. -
     - The supreme court has explicitly rejected the damage rule.

12.  Limitation of actions -- malpractice -- appellant's legal-malpractice claim
     never ceased to exist -- accrual of action not delayed. -- Where there
     was no intervening judgment in appellant's favor, her legal-
     malpractice claim never ceased to exist; at a minimum,
     appellant was alerted to her claims for actionable negligence
     when the bankruptcy court entered disqualification and
     fraudulent-conveyance orders against her; the accrual of
     appellant's action was not delayed; her alleged damages were
     evident through the trial court's adverse rulings, affirmed on
     appeal, and therefore never ceased to exist.

13.  Limitation of actions -- malpractice -- continuing-representation rule
     discussed. -- The termination-of-employment rule, also known as
     the continuing-representation rule, parallels the continuing-
     treatment doctrine in medical-malpractice cases; under either
     doctrine, the statute of limitations does not begin to run
     until the relationship between the professional and the client
     has ended for a particular matter. 

14.  Limitation of actions -- malpractice -- continuing-representation doctrine
     not embraced. -- The continuing-representation doctrine has not
     been embraced in Arkansas case law.

15.  Limitation of actions -- actions -- Arkansas Medical Malpractice Act
     follows occurrence rule. -- The supreme court rejected appellant's
     claim that by applying the occurrence rule, the court treated
     attorneys more favorably than physicians in professional
     malpractice cases; the supreme court has strictly limited the
     application of the continuing-treatment doctrine in medical-
     malpractice cases; moreover, the Arkansas Medical Malpractice
     Act follows the occurrence rule, with exceptions, and mirrors
     the application for legal-malpractice actions.
16.  Pleadings -- appellant's pleading facially insufficient because she did not
     plead dates on which alleged negligent advice was given. -- Arkansas is
     a fact-pleading state; allegations of dates and times must
     give fair notice to defendants of the claims and the basis for
     such claims; where appellant did not specifically plead the
     dates on which she alleged that appellees gave her negligent
     advice, her pleading was insufficient on its face.

17.  Limitation of actions -- malpractice -- cause of action accrued when
     alleged negligent act occurred -- occurrence-rule exception not applicable.
     -- Appellant's cause of action accrued when the alleged
     negligent act occurred, which was on or before the time she
     filed her 1991 Chapter Thirteen petition; hence, her 1995
     legal-malpractice claim was barred by the three-year statute
     of limitations; additionally, appellant did not allege that
     appellees concealed their alleged wrongdoing;  furthermore,
     the exception to the occurrence rule, invoked when one is
     prevented from filing suit, did not apply to appellant's
     situation because her action never ceased to exist; the
     supreme court narrowly construes the inherent exceptions to
     the occurrence rule in both medical-malpractice cases and
     legal-malpractice cases.

18.  Limitation of actions -- malpractice -- three-year period applicable --
     occurrence rule upheld. -- The supreme court held that the three-
     year statute of limitations continued to apply to legal-
     malpractice actions and declined to depart from the occurrence
     rule.

19.  Limitation of actions -- breach of fiduciary duty -- claim barred. --
     Under Ark. Code Ann.  16-56-105, which governs unwritten
     breaches of fiduciary duty and provides for a three-year
     statute of limitations, appellant's breach-of-fiduciary-duty
     claim was barred.


     Appeal from Pulaski Circuit Court; Morris W. Thompson, Judge;
affirmed.
     Sloan, Rubens & Peeples, by: Kent J. Rubens; and Timothy O.
Dudley, for appellant.
     Barber, McCaskill, Jones & Hale, P.A., by: R. Kenny McCulloch,
for appellees.

     Donald L. Corbin, Justice. 
     Appellant Christine Ragar appeals the summary judgment granted
in a legal malpractice case she brought against Appellees R.J.
Brown, and Crockett and Brown, a law firm in which Brown is a
partner.  The Pulaski County Circuit Court rendered judgment in
favor of Appellees on the basis that the three-year statute of
limitations barred the action.  Jurisdiction is pursuant to Ark.
Sup. Ct. R. 1-2(a)(15) and (17), as this case presents questions on
the law of torts and is of significant public interest. 
Additionally, Appellant argues that this court should overrule
precedent dating from 1877.
     Appellant raises two points on appeal.  First, she argues that
the trial court erred by granting summary judgment on her legal
malpractice claim.  Second, she argues that the trial court erred
by ruling that the statute of limitations barred her claim for
breach of fiduciary duty.  We hold that the trial court correctly
ruled that the three-year statute of limitations barred Appellant's
claims and affirm the grant of summary judgment for both claims. 
We further uphold the occurrence rule for determining the date of
accrual for legal malpractice claims.
     The parties do not dispute the facts and dates of the
underlying case or the procedural history of the legal malpractice
action.  In 1991, Appellees represented Appellant in filing her
Chapter Thirteen bankruptcy petition.  In the course of the 1991
representation, Appellees advised Appellant to transfer a parcel of
real property to them to be held in trust in order to secure
payment for their legal fees.  Appellant conveyed her property,
which consisted of real estate located on Shackleford Road in
Little Rock, to Appellees before filing the voluntary petition on
June 19, 1991.  The bankruptcy court found that the property
conveyance created a conflict of interest between Appellant and the
Appellees and disqualified Appellees from representation.  The
bankruptcy court further found that the conveyance was fraudulent,
thereby converting Appellant's voluntary Chapter Thirteen petition,
into an involuntary Chapter Seven petition which could not be
dismissed.  Appellees appealed both the disqualification order and
the fraudulent-conveyance order to the federal district court. 
Both orders were affirmed on July 31, 1992.
     Appellant filed this legal malpractice action against
Appellees in Pulaski County on March 8, 1995.  All of the acts
alleged in Appellant's complaint occurred on or before June 19,
1991.  Her amended complaint alleged that she sustained no damages
before July 31, 1992.  Her second amended complaint added a claim
for breach of fiduciary duty.  Appellant did not, however,
specifically plead the dates on which the alleged negligent actions
occurred in either claim stated, but instead, included only the
July 31, 1992 date.  Upon motion by Appellees, the trial court
reconsidered its earlier rulings, granted summary judgment, and
dismissed both claims with prejudice on June 27, 1996.  The trial
court specifically held that the three-year statute of limitations
governed by Ark. Code Ann.  16-56-105 (1987) barred both claims. 
The trial court did not rule on Appellant's final motion for
reconsideration, in which she argued that the trial court had not 
considered the claim for breach of fiduciary duty.  Appellant filed
notice of this appeal on July 17, 1996.  
     Arkansas Rule of Civil Procedure 56(c) provides for summary
judgment when "the pleadings, depositions, answers to
interrogatories 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 a judgment
as a matter of law."  In Calcagno v. Shelter Mut. Ins. Co., 330
Ark. 802, 957 S.W.2d 700 (1997), we explained that summary judgment
is reserved for cases that have no genuine factual disputes.  The
moving party bears the burden of sustaining a motion for summary
judgment; once the moving party meets this burden, the opposing
party must present proof with proof and demonstrate that a material
issue of fact survives.  Id.  We view the evidence in a light most
favorable to the opposing party and resolve all questions and
ambiguities against the moving party.  Id.  This court must review
the evidence presented below to determine whether the trial court
ruled correctly.  Wright v. Compton, Prewett, Thomas & Hickey, 315
Ark. 213, 866 S.W.2d 387 (1993).  Summary judgment is proper when
the statute of limitations bars the action.  Alexander v. Twin City
Bank, 322 Ark. 478, 910 S.W.2d 196 (1995).  We will affirm a
summary judgment when the plaintiff admits a dispositive fact. 
Sublett v. Hipps, 330 Ark. 58, 952 S.W.2d 140 (1997).
     Appellant first argues that the trial court erred when it
granted summary judgment on the basis that the three-year statute
of limitations governed by section 16-56-105 barred her suit filed
on March 8, 1995.  Section 16-56-105 provides for a three-year
statute of limitations period in actions based in contract or
liability, including unwritten breaches of duty.  Since 1877, this
court has consistently held that the three-year limitations period
applies to legal malpractice actions.  Chapman v. Alexander, 307
Ark. 87, 817 S.W.2d 425 (1991) (citing White v. Reagan, 32 Ark. 281
(1877)).
     Next, we must determine when the claim accrued, and whether it
is barred by the limitations period.  Goldsby v. Fairley, 309 Ark.
380, 831 S.W.2d 142 (1992).  There are at least three common
approaches used to determine when a cause of action accrues: (1)
the "occurrence rule," (2) the "damage rule" or "injury rule" and
a variation called the "discovery rule," and (3) the "termination-
of-employment rule," also named the "continuing-representation
rule."  See Chapman, 307 Ark. 87, 817 S.W.2d 425.  See generally
2 Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice  21
(4th ed. 1996). 
     Arkansas has adhered to the traditional occurrence rule in
legal malpractice cases since 1877.  Chapman, 307 Ark. 87, 817 S.W.2d 425.  Under the occurrence rule, the malpractice action
accrues when the "last element essential to the cause of action"
occurs, unless the attorney actively conceals the wrongdoing.  Id.
at 88, 817 S.W.2d  at 426.  The rationale is to prevent attorneys
from having to defend stale claims, to preserve evidence, and to
treat all plaintiffs equally.  Id.  This court has held fast to
this now-minority rule for attorneys and other professionals,
including accountants and insurance agents.  See Calcagno, 330 Ark.
802, 957 S.W.2d 700.  In Flemens v. Harris, 323 Ark. 421, 915 S.W.2d 685 (1996), this court expressly included the application to
legal malpractice actions:
          We hold that the statute of limitations for an
     insurance agent commences at the time the negligent act
     occurs, in keeping with our traditional rule in
     professional malpractice cases.  However, in doing so, we
     recognize the harshness of this rule to the clients of
     not only insurance agents, but also of attorneys,
     accountants, and others who may avail themselves of this
     rule in defending against malpractice actions.
Id. at 427, 915 S.W.2d  at 689 (emphasis added).
     Appellant, nevertheless, argues that our holdings are
inconsistent and that this court adopted the damage rule or the
injury rule in two legal malpractice cases, Stroud v. Ryan, 297
Ark. 472, 763 S.W.2d 76 (1989), and Pope County v. Friday, Eldredge
& Clark, 313 Ark. 83, 852 S.W.2d 114 (1993).  Under the damage
rule, now the majority rule, the statute of limitations begins to
run at the time the plaintiff is injured or suffers damages.  See
Chapman, 307 Ark. 87, 817 S.W.2d 425.  Similarly, the discovery
rule delays the accrual of the actionable negligence until the
plaintiff discovers, or reasonably should have discovered, the
malpractice.
     We disagree with Appellant's assessment of Stroud and Pope
County.  In those cases, this court recognized an exception to the
occurrence rule that effectively tolls the statute of limitations
whenever the plaintiff is prevented from bringing his or her
malpractice claim.  Appellant conceded during oral argument before
this court that the facts of this case do not parallel either
Stroud or Pope County.
     The facts in Stroud, 297 Ark. 472, 763 S.W.2d 76, involved a
default judgment rendered against the appellant that had been set
aside but was reinstated on a prior appeal.  Concluding that the
actionable negligence ceased to exist during the period from the
time the default judgment was set aside until it was reinstated,
this court held that the appellant could not prove her malpractice
action until the adverse judgment was entered against her.
Similarly, in Pope County, 313 Ark. 83, 852 S.W.2d 114, we held
that there was no actionable negligence from the time of the trial
court's favorable ruling for the plaintiff until the time it was
reversed on appeal.  We therefore refute that we adopted the
discovery rule in either Stroud or Pope County.  
     This court distinguished Stroud when it decided Goldsby, 309
Ark. 380, 831 S.W.2d 142, and explained that the appellants'
malpractice action in Goldsby had never ceased to exist from the
time the appellee attorney had prepared a warranty deed in 1980 and
misrepresented that the appellants had a first mortgage on the
subject property.  Appellants were not aware of the
misrepresentation until 1985 when they suffered a business loss as
a result of the alleged misrepresentation.  This court held that
the three-year statute of limitations barred appellants' 1986
malpractice suit and explicitly rejected the damage rule.
     The distinguishing factor in both Stroud and Pope County was
the judgment entered in favor of the appellant.  Here, as in
Goldsby, there was no intervening judgment in Appellant's favor;
hence, her malpractice claim never ceased to exist.  At a minimum,
Appellant was alerted to her claims for actionable negligence when
the bankruptcy court entered the disqualification and the
fraudulent-conveyance orders against her.  Unlike Stroud, there was
no point where Appellant was prevented from bringing suit.  We are
therefore not persuaded by Appellant's argument that accrual of her
action was delayed; her alleged damages were evident through the
trial court's adverse rulings, affirmed on appeal, and thereby
never ceased to exist.    
     The majority of jurisdictions considering this context,
regardless of the applicable rule, holds that a pending appeal by
the damaged party does not serve to toll the statute of limitations
when damages can be presently identified. See, e.g., Gulf Coast
Investment Corp. v. Brown, 813 S.W.2d 218 (Tex. 1991) (holding that
under the discovery rule, the statute of limitations accrued at the
time an adverse proceeding was filed against the plaintiff, not
when the trial court rendered final judgment against the
plaintiff).  Additionally, we are not convinced that the discovery
rule would be an appropriate solution in response to the question
of having to defend an older drafting, for example, a twenty- or
thirty-year-old will.  See Chapman, 307 Ark. 87, 817 S.W.2d 425. 
Nor are we convinced by her out-of-state authorities.  See Neel v.
Magana, Olney, Levy, Cathcart & Gelfand, 491 P.2d 421 (Cal. 1971).
     Appellant next contends that this court has recognized the
termination-of-employment rule, also known as the continuing-
representation rule in Wright, 315 Ark. 213, 866 S.W.2d 387.  This
rule parallels the "continuing-treatment doctrine" in medical
malpractice cases.  See, e.g., Lane v. Lane, 295 Ark. 671, 752 S.W.2d 25 (1988).  Under either doctrine, the statute of
limitations does not begin to run until the relationship between
the professional and client has ended for a particular matter.  Id. 
We again refute Appellant's contention, because in Wright, this
court applied the occurrence rule and determined that the alleged
negligence was a corporate reorganization the law firm was hired to
perform.  This court concluded that the "last element essential to
the cause of action" was a final stock transfer between the
plaintiff's two corporations that was the last step of the
reorganization.  This court ultimately remanded the case to the
trial court, because a question of fact existed among the numerous
dates alleged.  Such holding does not constitute an embracement of
the continuing-representation doctrine.
     We further refute Appellant's claim that by applying the
occurrence rule, we treat attorneys more favorably than physicians
in professional malpractice cases.  This court has strictly limited
the application of the continuing-treatment doctrine in medical
malpractice cases.  See Pastchol v. St. Paul Fire & Marine Ins.
Co., 326 Ark. 140, 929 S.W.2d 713 (1996) (holding that the
continuing-treatment doctrine does not apply where the plaintiff
alleges only an isolated act of negligence rather than a continuing
course of negligent treatment).  Moreover, the Arkansas Medical
Malpractice Act follows the occurrence rule and essentially mirrors
the application for legal malpractice actions.  Chapman, 307 Ark.
87, 817 S.W.2d 425.  Specifically, Ark. Code Ann.  16-114-203(b)
(Supp. 1997) provides that the cause of action in medical
malpractice cases shall accrue on the date of the wrongful act. 
The act contains a discovery-rule exception for fraudulent
concealment and an exception for situations when foreign objects
are left in the patient's body.  Appellant's out-of-state authority
also requires a series of negligent acts by the attorney in order
to apply the continuing-representation doctrine.  Pittman v.
McDowell, Rice & Smith, 752 P.2d 711 (Kan. App. 1988).  Here,
Appellant does not specifically allege a continuing course of
negligent representation that occurred after the time the petition
was filed. 
     Because Arkansas is a fact-pleading state, Appellant's
argument fails on the face of her complaint.  Goldsby, 309 Ark.
380, 831 S.W.2d 142.  Allegations of dates and times must give fair
notice to defendants of the claims and the basis for such claims. 
Id. (citing ARCP 8 and Newbern, Arkansas Civil Practice and
Procedure  8-2 (1985)).  Here, Appellant first alleged acts that
took place on or before June 19, 1991.  The date of July 31, 1992
appeared in Appellant's amended complaint and second amended
complaint as the alleged date on which she sustained damages. 
Because Appellant did not specifically plead the dates on which she
alleges that Appellees gave her negligent advice, her pleading is
insufficient on its face.  Id.
     In conclusion, Appellant's cause of action accrued when the
alleged negligent act occurred.  This was on or before the time she
filed her Chapter Thirteen petition on June 19, 1991; hence, her
legal malpractice claim filed on March 8, 1995, is barred by the
three-year statute of limitations.  Chapman, 307 Ark. 87, 817 S.W.2d 425.  Additionally, Appellant did not allege that Appellees
concealed their alleged wrongdoing.  Furthermore, the exception to
the occurrence rule enunciated in Stroud, 297 Ark. 472, 763 S.W.2d 76, does not apply to Appellant's situation.  Appellant's action
never ceased to exist, thus she was not prevented from filing suit. 
This court narrowly construes the inherent exceptions to the
occurrence rule in both medical malpractice cases and legal
malpractice cases.
     This court has expressly declined to retroactively change the
legal malpractice occurrence rule to any of the other approaches. 
Chapman, 307 Ark. 87, 817 S.W.2d 425.  The General Assembly's
silence for over 100 years indicates tacit approval of this court's
statutory interpretation.  Id.  Appellant has offered no compelling
arguments or authorities to convince us to alter our long-standing
acceptance and application of this rule of law, absent legislative
directive.  Stare decisis mandates this outcome, given our recent
ruling in Calcagno, 330 Ark. 802, 957 S.W.2d 700.  We respectfully
decline this opportunity to change our interpretation of section
16-56-105 and hold that Goldsby, 309 Ark. 380, 831 S.W.2d 142,
continues to be the Arkansas rule, and accordingly, do not depart
from the occurrence rule.  This court further clarified in Goldsby
that Stroud, 297 Ark. 472, 763 S.W.2d 76, does not stand for the
proposition that Arkansas has adopted the damage rule.  Goldsby,
309 Ark. 380, 831 S.W.2d 142.  We conclude the same and will
continue to defer any departures therefrom to the General Assembly.
     For her second argument, Appellant argues that the trial court
erred in granting the motion for summary judgment on the claim of
breach of fiduciary duty because the statute of limitations had not
run.  Section 16-56-105 governs unwritten breaches of fiduciary
duty and provides for a three-year statute of limitations.  For 
the reasons outlined above, this claim for breach of fiduciary duty
was also barred.  See Smith v. Elder, 312 Ark. 384, 849 S.W.2d 513
(1993).
     Affirmed.
     Kevin A. Crass, Spl. J., joins in this opinion.
     Newbern, J., not participating.