Technical Packaging, Inc. v. Hanchett
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NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
TECHNICAL PACKAGING, INC.,
)
)
Appellant,
)
)
v.
)
)
RICHARD HANCHETT and TRENAM,
)
KEMKER, SCHARF, BARKIN, FRYE,
)
O'NEILL & MULLIS, P.A.,
)
)
Appellees.
)
__________________________________ )
Case No. 2D06-3851
Opinion filed May 9, 2008.
Appeal from the Circuit Court for Hillsborough
County; Marva L. Crenshaw, Judge.
Warren R. Trazenfeld, P.A., Miami, and
Patrice A. Talisman of Hersch & Talisman,
P.A., Coconut Grove, for Appellant.
F. Wallace Pope, Jr., of Johnson, Pope,
Bokor, Ruppel & Burns, LLP, Clearwater,
for Appellees.
FARNELL, CROCKETT, Associate Senior Judge.
Technical Packaging, Inc. ("Technical Packaging" or "Technical"), sued its
former attorney Richard Hanchett and Hanchett's firm, Trenam, Kemker, Scharf, Barkin,
Frye, O'Neill & Mullis, P.A. ("Trenam"; collectively, "Hanchett/Trenam"), for legal
malpractice. The trial court granted Hanchett/Trenam's motion for summary judgment,
ruling that Hanchett/Trenam had prevailed on its defense of abandonment. We reverse.
Background
Technical Packaging sold cellophane cigar tubes. In the late 1990s its
cellophane supplier was UCB Films, Inc. ("UCB"). Technical ordered cellophane from
UCB on approximately thirty-five occasions during this period, with each order reflected
in its own set of documents. At some point Technical's customers began complaining
about defects in cigar tubes that had not existed when Technical was purchasing
cellophane from its previous supplier. Technical claimed that UCB's allegedly defective
cellophane was delivered between December 1996 and May 1998.1 Technical lost a
significant amount of money. Trenam, which had had a long-term attorney-client
relationship with Technical, assisted Technical in defending claims made by its
customers; Hanchett was assigned to represent Technical. In March 2000, Technical
consulted with Trenam about the possibility of suing UCB on a contingency-fee basis.
After Trenam declined to undertake this representation in the summer of 2001,
Technical hired another law firm and filed a complaint against UCB on March 3, 2003.
UCB removed the suit to the federal Middle District of Florida. Technical's complaint
recited eight causes of action, only one of which—breach of contract—forms the basis
of the issue in the instant appeal. UCB pleaded statute of limitations as a defense and
prevailed on its motion for summary judgment, with the court ruling that a four-year
1
Hanchett/Trenam do not dispute this time range.
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statute applied to all of Technical's claims, making the lawsuit untimely. The four-year
period applied to the breach-of-contract claim because, the court ruled, the TechnicalUCB sales agreements were oral contracts. See § 95.11(3)(k), Fla. Stat. (2002)
(providing that "[a] legal or equitable action on a contract . . . not founded on a written
instrument, including an action for the sale and delivery of goods" entails a four-year
limitations period). Technical did not appeal the judgment.
The gist of the present malpractice action is that during the consultations
leading to Trenam's declining to represent Technical Packaging in a lawsuit against
UCB, Hanchett allegedly gave Technical incorrect dates for the termination of limitations
periods; as a result, Technical's March 2003 suit against UCB was untimely filed. For
its part, Hanchett/Trenam raised several defenses, including abandonment—that is, that
Technical, by not appealing the adverse judgment in the underlying lawsuit and winning
a reversal, waived any malpractice claims against Hanchett/Trenam. Specifically,
Hanchett/Trenam argued below and argue here that the federal district court erred in
ruling that the agreements for the sale of cellophane from UCB to Technical were oral
contracts, thus entailing four-year limitations periods. Hanchett/Trenam contend (as
Technical did in the underlying lawsuit) that the sales agreements were written contracts
entailing five-year limitations periods, see § 95.11(2)(b), and that Technical should have
prosecuted an appeal based on that legal theory. Relying on the defense of
abandonment, Hanchett/Trenam moved for summary judgment and prevailed on that
ground. Technical appeals.
Discussion
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This court reviews a final order of summary judgment de novo. See
Volusia County v. Aberdeen at Ormond Beach, L.P., 760 So. 2d 126, 130 (Fla. 2000).
A movant is entitled to summary judgment "if the pleadings,
depositions, answers to interrogatories, admissions,
affidavits, and other materials as would be admissible in
evidence on file 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."
Estate of Githens v. Bon Secours-Maria Manor Nursing Care Ctr., Inc., 928 So. 2d
1272, 1274 (Fla. 2d DCA 2006) (quoting Fla. R. Civ. P. 1.510(c)). Furthermore,
[i]n determining whether a genuine issue of material fact
exists, this court must view every possible inference in favor
of the party against whom summary judgment has been
entered. It is the movant's burden to prove the nonexistence
of genuine issues of material fact, and the burden of proving
the existence of such issues is not shifted to the opposing
party until the movant has successfully met his burden.
Id. (citations and quotation marks omitted).
We begin by noting that the elements of legal malpractice that the plaintiff
must prove are: (1) the employment of the attorney, (2) the lawyer=s neglect of a
reasonable duty, and (3) the attorney=s negligence as the proximate cause of loss to the
client. Lenahan v. Russell L. Forkey, P.A., 702 So. 2d 610, 611 (Fla. 4th DCA 1997).
Further, the Florida Supreme Court in Peat, Marwick, Mitchell & Co. v. Lane, 565 So. 2d
1323 (Fla. 1990), pointed out that "[a] clear majority of the district courts have expressly
held that a cause of action for legal malpractice does not accrue until the underlying
legal proceeding has been completed on appellate review because, until that time, one
cannot determine if there was any actionable error by the attorney." Id. at 1325
(citations omitted).
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If the principle of "complet[ion] on appellate review," id., were required to
be followed literally in all cases, then there would be no question that the trial court's
granting of summary judgment to Hanchett/Trenam was correct, given that Technical
did not appeal its loss in the underlying lawsuit. However, the generalization has been
tempered:
Where a party's loss results from judicial error
occasioned by the attorney's curable, nonprejudicial mistake
in the conduct of the litigation, and the error would most
likely have been corrected on appeal, the cause of action for
legal malpractice is abandoned if a final appellate decision is
not obtained. Pennsylvania Ins. Guar. Ass'n v. Sikes, 590
So. 2d 1051 (Fla. 3d DCA 1991). . . .
....
Our cases should not be read to require every party
who suffers a loss and attributes that loss to legal
malpractice to obtain a final appellate determination of the
underlying case before asserting a claim for legal
malpractice. The test for determining when a cause of
action for attorney malpractice arises remains when the
existence of redressable harm has been established. In
some cases, redressable harm caused by errors in the
course of litigation can only be determined upon completion
of the appellate process. In other cases, the failure to obtain
appellate review should not bar an action for malpractice.
We are unable to establish a bright-line rule that complete
appellate review of the underlying litigation is a condition
precedent to every legal malpractice action. To do so would,
in many cases, violate the tenet that the law will not require
the performance of useless acts.
Segall v. Segall, 632 So. 2d 76, 78 (Fla. 3d DCA 1993) (quotation marks and most
citations omitted; emphasis added); see also Hunzinger Constr. Corp. v. Quarles &
Brady Gen. P'ship, 735 So. 2d 589, 595 (Fla. 4th DCA 1999) ("The circumstances in
which a client's subsequent actions constitute an abandonment of a legal malpractice
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claim, as a matter of law, are very narrow. . . . In the instant case, we cannot say, as
the court could in [Pennsylvania Ins. Guar. Ass'n v.] Sikes, [590 So. 2d 1051 (Fla. 3d
DCA 1991),] that the mistake in the original proceedings would in all likelihood have
been corrected on appeal." (internal quotation marks omitted; citations omitted));
Eastman v. Flor-Ohio, Ltd., 744 So. 2d 499, 504 (Fla. 5th DCA 1999) ("Accordingly, the
trial court in this case properly concluded that the park owner did not abandon its right
to pursue a claim of legal malpractice against the law firm by voluntarily dismissing its
appeal from the adverse judgment in the class action suit because that judgment was
not likely to be reversed due to a finding of judicial error relating to the alleged claim of
legal malpractice.").
The issue here, then, is whether Hanchett/Trenam could demonstrate
under the summary judgment standard that an appeal by Technical of the federal district
court's adverse judgment would in all likelihood have resulted in a reversal, with a ruling
by the federal appeals court that the statute of limitations on an action for UCB's alleged
breach of the Technical-UCB agreements was five years. There is, however, a
threshold issue whose resolution, we conclude, largely moots the main issue: whether a
reversal with such a ruling would have made any difference to Technical—that is,
whether even under a five-year limitations period Technical's underlying lawsuit would
have been too late.
The chronology urged by Hanchett/Trenam in support of its position that
the federal district court erred is based on a letter from Technical's insurance carrier to
Technical's counsel dated January 14, 2000, and stating that no formal claim had yet
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been made against Technical by its customers.2 Hanchett/Trenam theorize that
because any damages related to UCB's defective product would have come into
existence sometime after this date, when actual complaints would have come in, and
because the federal appeals court would have concluded that the statute of limitations
was five years, Technical's underlying complaint would have been timely filed—that is,
Technical had until January 2005 to file its complaint. Hanchett/Trenam's chronology is
based on the following chain of reasoning: (i) a cause of action accrues when the last
element constituting the action occurs, § 95.031(1), Fla. Stat.; (ii) a cause of action for
breach of contract has three elements—(1) a valid contract, (2) a material breach, and
(3) damages, see, e.g., Rollins, Inc. v. Butland, 951 So. 2d 860, 876 (Fla. 2d DCA
2006); (iii) here, the last element of the cause of action was damages, which occurred
sometime after January 14, 2000, when Technical's customers apparently began
complaining about the defective product originally made by UCB.
Notwithstanding the statutory "last-element" principle of section 95.031(1),
however, Florida case law consistently holds that a cause of action for breach of
contract accrues and the limitations period commences at the time of the breach. See,
e.g., Holiday Furniture Factory Outlet Corp. v. State, Dep't of Corr., 852 So. 2d 926, 928
2
Hanchett/Trenam propose an alternative chronology based on the federal district
court's finding that Technical "strongly suspected" "by June 1998" that its problems
were due to the cellophane. Thus, according to Hanchett/Trenam, the five-year
limitations period lasted until June 2003, making Technical's March 2003 lawsuit timely.
We reject this argument with only minimal discussion because the federal court was
discussing Technical's fraud-in-the-inducement claim, which is not at issue here, and
because Hanchett/Trenam cite no authority for their proposition that June 1998 must
stand as the date of accrual for purposes of the instant lawsuit.
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(Fla. 1st DCA 2003) (citing State Farm Mut. Auto. Ins. Co. v. Lee, 678 So. 2d 818 (Fla.
1996)). The parties do not dispute that, in the underlying action, the respective
breaches occurred when the defective product was delivered from UCB to Technical.
See, e.g., Forms & Surfaces, Inc. v. Welbro Constructors, Inc., 627 So. 2d 594, 595
(Fla. 5th DCA 1993) ("An action for such a breach accrues, for venue purposes, where
the allegedly defective or nonconforming goods were delivered.").3
From the materials from the underlying lawsuit included in our record, it is
reasonable to conclude that the Technical-UCB sales agreements were in fact written
contracts. This means that causes of action for breach accrued five years from the
December 1996–May 1998 period, when the defective cellophane was delivered, such
that the limitations period corresponding to each delivery expired between December
2001 and May 2003. See § 95.11(2)(b). Because thirty-two of the thirty-five orders at
issue were delivered before March 1998,4 a lawsuit filed in March 2003 with respect to
3
Hanchett/Trenam argue that some of the cases really mean that a cause of
action accrues when financial damages occur. However, they cite no cases in which
damages became apparent after the breach and the court held that the cause of action
accrued and the limitations period commenced when the damages occurred. On the
contrary, some cases conclude that as of the breach at least nominal damages occur,
such that the cause of action for breach of contract accrues then, even though actual
damages occur later. See, e.g., Abbott Labs., Inc. v. Gen. Elec. Capital, 765 So. 2d
737, 740 (Fla. 5th DCA 2000). Hanchett/Trenam cite to the dissent in Medical Jet, S.A.
v. Signature Flight Support–Palm Beach, Inc., 941 So. 2d 576, 579 (Fla. 4th DCA 2006)
(May, J., dissenting), which calls for a more careful analysis of the breach-damages
distinction in light of section 95.031(1), Florida Statutes. Medical Jet, 941 So. 2d at
579-81. Nevertheless, at present the rule in Florida is that a cause of action accrues on
a breach-of-contract action when the breach occurs.
4
Hanchett/Trenam do not dispute this breakdown of delivery timing, asserted by
Technical.
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these deliveries was time-barred even under a five-year statute. In short, even if the
federal appeals court had reversed with a ruling that the statute of limitations was five
years, Technical was still too late in filing its original lawsuit as to the majority of its
claims. As a result, Hanchett/Trenam failed to demonstrate abandonment with respect
to these claims, and we must reverse the summary judgment at least in part.
With respect to the three remaining purchase agreements—those whose
deliveries were made in March 1998 or later, thus making a breach-of-contract claim
timely under a five-year limitations period—the analysis is complicated somewhat by the
circumstance that the key fact about which there must be no genuine issue under the
summary judgment standard happens to concern an issue of law: what the statute of
limitations on the underlying contracts was.5 See Hamilton v. Tanner, 962 So. 2d 997,
5
Technical attempted to raise an issue of fact below by filing the affidavit of an
appellate attorney. The entire substantive content of the affidavit was as follows:
5.
I have reviewed the court file in [the underlying
lawsuit]. I have analyzed all the filings in that matter
including, but not limited to, the pleadings, affidavits,
discovery responses, motions, memoranda, and the like.
6.
It is my professional opinion that the well-reasoned
Order of U.S. District Judge James Moody granting
summary judgment to the Defendant in this matter, more
likely than not, would have resulted in an affirmance by the
United States Court of Appeals for the Eleventh Circuit, had
the judgment been appealed [by Technical].
We agree with Hanchett/Trenam that these statements constitute a mere conclusory
assertion that fails to raise a real issue of fact that would preclude summary judgment.
See, e.g., Pino v. Lopez, 361 So. 2d 192, 193 (Fla. 3d DCA 1978) (affirming a summary
judgment when "[p]laintiff's affidavit in opposition to the motion for summary judgment
was insufficient as a matter of law because it alleged conclusions of law without
supporting facts"). We therefore cannot reverse on the basis of this argument urged by
Technical.
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1000 (Fla. 2d DCA 2007). The parties' briefs, especially that of Hanchett/Trenam, seem
to reflect the view that if this court were to take it upon itself to rule on the limitations
issue as if it were the appeals court available to Technical in the underlying lawsuit, the
issue in the present appeal could be resolved. However, we are not persuaded that this
is an appropriate role for this court where, as here, (1) the only issue urged by
Hanchett/Trenam that in our view could potentially support a five-year limitations period
appears to be one of first impression,6 (2) the full record of the underlying lawsuit is not
before us, and (3) Hanchett/Trenam, the summary judgment movant and hence the
party with the burden, has focused its argument on the "pure" legal issue without taking
into account how an appeal by Technical would have proceeded in practice in light of
Technical's averments (in pleadings, motions, etc.) in the underlying lawsuit.
We acknowledge that the parties have included in the record copies of a
number of documents from the underlying lawsuit. However, "[a]n accurate and
comprehensive record of the proceedings below is absolutely essential to fair and
6
The issue can be summarized as follows: In the underlying lawsuit, Technical
alleged and argued that although each of its purchase orders for cellophane was placed
orally to UCB, the eventual exchange of documents (a purchase order and an invoice
for each transaction) by the parties constituted written contracts. Hanchett/argue
similarly in the present lawsuit. This view is consistent with Florida law, in particular its
adoption of the Uniform Commercial Code. See generally § 672.201, Fla. Stat. (2002);
45 Fla. Jur. 2d Sales and Exchanges of Goods § 31 (2007). The written documents
contain no explicit warranties of quality. The issue, as framed by Hanchett/Trenam in
one of its subarguments, is whether the statutory implied warranty of merchantability ("a
warranty that the goods shall be merchantable is implied in a contract for their sale . . .,"
§ 672.314(1)) enjoys the same five-year limitations period as the written contract itself,
see § 95.11(2)(b), or entails a four-year period as a statutory liability, see § 95.11(3)(f),
as Technical now urges. The parties have not identified a case that addresses this
specific issue.
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efficient appellate review." Haist v. Scarp, 366 So. 2d 402, 404 (Fla. 1978) (emphasis
added). Here, we note the significant omission of most of the documents comprising
the alleged written agreements, including those for the remaining three purchase
orders, and we cannot be certain what other components of the record might be
missing.
Furthermore, Hanchett/Trenam's failure to trace through those portions of
the record in the underlying lawsuit that are included in the instant record and that might
have affected the outcome of an appeal also leads us to conclude that we should
decline the invitation to resolve the underlying legal issue. For example, our analysis,
above, concerning the thirty-two alleged purchase agreements would have been that
much simpler had our attention been brought to the following recitation by Technical in
its "Plaintiff's Memorandum in Opposition to Motion for Summary Judgment," filed in the
underlying lawsuit:
The [four] purchase orders placed during the five years
preceding filing of this lawsuit were issued on April 7, 1998
. . ., May 5, 1998 . . ., and June 5, 1998. The statute of
limitations for breach of a written contract is five years.
Section 95.11(2)(b), Fla[.] Stat. The claim for breach of
written contracts was filed within five years of these
purchase orders and is therefore timely as to those written
contracts.
(Emphasis added.) By averring that only the three7 latest orders entailed five-year
limitations periods, Technical was tacitly acknowledging that the earlier thirty-two orders
7
In the underlying lawsuit, Technical alleged that four purchase orders were made
after March 1998. In the instant lawsuit, Technical mentions only three of the four
orders.
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were outside even the five-year limitations period for a breach-of-contract action. Any
argument in an underlying appeal that a breach-of-contract claim as to these earlier
contracts was within a five-year statute of limitations would not likely have been
recognized by the federal appeals court. See, e.g., Gregory v. Missouri Pac. R.R. Co.,
32 F.3d 160, 165 (5th Cir. 1994) ("Gregory cannot take one position before the district
court and then take an inconsistent position here."); Ramming Real Estate Co. v. United
States, 122 F.2d 892, 894 (8th Cir. 1941) ("It is well settled that the theory upon which
the case was tried in the court below must be adhered to on appeal."); see also Reserve
Ins. Co. v. Pollock, 270 So. 2d 469, 469 (Fla. 3d DCA 1972) ("We hold that defendantappellant admitted its liability under the policy when it moved for arbitration, and it is
estopped from taking an inconsistent position on this subsequent appeal."). Our point is
that there may well be other matters relevant to a resolution of the statute of limitations
issue found in portions of the underlying lawsuit's record, matters that the parties have
not identified or that are simply not available to us because the pertinent documents are
not included in the instant record. We therefore do not address the underlying legal
issue.
As to the remaining three alleged purchase agreements, then, we are
forced to conclude that Hanchett/Trenam failed to demonstrate that they were entitled to
summary judgment as a matter of law on their theory of abandonment, that is, that an
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appeal by Technical in the underlying lawsuit would in all likelihood have ended in
Technical's favor.8 We therefore reverse the order of the trial court.
Reversed.
CANADY, J., Concurs
KELLY, J., Concurs in result only.
8
We reject without comment Hanchett/Trenam's alternative basis for affirmance,
that of judgmental immunity.
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