Fritzeen v. Gravel

Annotate this Case
Fritzeen v. Gravel (2002-075); 175 Vt. 537; 830 A.2d 49

2003 VT 54

[Filed 23-May-2003]

                                 ENTRY ORDER

                                 2003 VT 54

                      SUPREME COURT DOCKET NO. 2002-075

                             JANUARY TERM, 2003

  Eric and Louise Fritzeen and	        }	APPEALED FROM:
  William and Constance B. Coates	}
                                        }
       v.	                        }	Chittenden Superior Court
                                        }	
                                        }
  John Gravel, Esq.	                }	DOCKET NO. S0779-01 CnC

                                                Trial Judge: Mary Miles Teachout

             In the above-entitled cause, the Clerk will enter:

       ¶  1.  Plaintiffs Eric and Louise Fritzeen and William and Constance
  B. Coates appeal a decision of the Chittenden Superior Court granting
  summary judgment to defendant, attorney John Gravel.  The trial court found
  that plaintiffs' claim for legal malpractice was barred by 12 V.S.A. § 511
  ("A civil action . . . shall be commenced within six years after the cause
  of action accrues and not thereafter.").  Plaintiffs argue that the trial
  court erred in determining that the cause of action accrued before the
  conclusion of the appeal in the underlying proceeding.  We affirm.

       ¶  2.  The trial court found the following undisputed facts. 
  Attorney Gravel, defendant, represented plaintiffs from August 1993 to June
  1994 in connection with an ongoing condominium development project. 
  Plaintiffs had obtained a new wastewater permit in January 1992, which
  their neighbors opposed.  The neighbors sought revocation of the permit in
  a hearing before the Agency of Natural Resources' Department of
  Environmental Conservation (the Department), and plaintiffs prevailed. 
  Defendant assumed representation of plaintiffs when the neighbors appealed
  the decision of the Department to the Water Resources Board in August 1993.
  (FN1)  On October 21, 1993, legal counsel to the Water Resources Board
  circulated to all parties a detailed list of the specific exhibits before
  the Board on appeal.  The parties then had an opportunity to supplement the
  record with additional exhibits.  The exhibits list on record did not
  include certain technical documentation that the Department had relied upon
  for its decision in support of plaintiffs' position.  Defendant did not
  attempt to supplement the record with these documents on behalf of his
  clients.
          
       ¶  3.  On June 1, 1994, the Water Resources Board reversed the
  Department's decision and remanded the matter for further revocation
  proceedings because "the record does not fairly and reasonably support the
  ANR's conclusion[s]" that the wastewater disposal system met several
  requirements of the Environmental Protection Rules.  One week later,
  defendant wrote a letter to plaintiffs in which he notified them of the
  outcome and identified four future courses of action.  Attorney Liam Murphy
  then assumed representation of plaintiffs and, on June 16, 1994, filed a
  motion to correct the decision with the Water Resources Board.  

       ¶  4.  In July 1994, attorney Murphy filed plaintiffs' motion to
  supplement the record on appeal along with an attached affidavit from
  plaintiff Eric Fritzeen in which Fritzeen expressed his knowledge that
  defendant had not supplemented the file before the Water Resources Board
  with documents supportive of plaintiffs' position.  Plaintiff Fritzeen's
  sworn statement included the following language:  

    At no time did [defendant] ever inform me of receipt of the
    October 1993 memorandum from the Board counsel which indicated
    that the Board record was limited to seven listed exhibits and
    that any party wishing to supplement the record would have to file
    a petition to the Board. . . .  At the Board hearing on the
    revocation, a number of questions were asked by Board members
    about certain data and plans and [defendant] replied that such
    data was part of the file.  I understood at that time the entire
    file was before the Water Resources Board. . . .  Certain critical
    information and plans that are necessary for the Board to make a
    just decision on the complete record were omitted from the
    original exhibits and if I had known earlier that these were not a
    part of the Record, I would have petitioned the Board to include
    them.

  At the hearing on the motions held in August 1994, attorney Murphy
  responded to the hearing officer's inquiry concerning "good reasons for
  failure to present" the additional evidence, see 3 V.S.A. § 815(b), by
  stating that "the prior lawyers in this case did an inadequate job in
  presenting . . . [and] that certainly may leave [plaintiffs] with a
  malpractice suit . . . against [defendant,] the lawyer that represented him
  on appeal."  The Board issued its written decision on September 14, 1994,
  denying plaintiffs' motions to correct the decision and supplement the
  record on appeal.  Plaintiffs filed a notice of appeal to this Court, which
  was later dismissed by stipulation of the parties in December 1995.

       ¶  5.  On December 9, 1994, a year before the stipulated dismissal
  of the appeal, attorney Murphy wrote a letter to defendant Gravel,
  notifying him that plaintiffs were considering a malpractice action against
  defendant based on the omission of documents and the limited record
  presented on appeal to the Water Resources Board.  Attorney Murphy
  explained in his letter that he "discovered the problem when [he] read the
  Water Resources Board decision and it stated that there was no evidence
  relating to the percolation test data in the record."  He wrote that, after
  reviewing the record and finding it only contained limited exhibits, he
  immediately filed the motion to supplement the record on July 5, 1994.  
          
       ¶  6.  Plaintiffs then waited until June 15, 2001 to file this action.
  (FN2)  On January 18, 2002, the trial court granted summary judgment to
  defendant, finding that the action had accrued by December 9, 1994 at the
  latest and thus was barred by the six-year statute of limitations in 12
  V.S.A. § 511.  This appeal followed.

       ¶  7.  We review a summary judgment determination on appeal using
  the same standard as the trial court: summary judgment is appropriate when
  the record demonstrates that there is no genuine issue of material fact
  remaining and a party is entitled to judgment as a matter of law.  Politi
  v. Tyler, 170 Vt. 428, 431, 751 A.2d 788, 790 (2000); V.R.C.P. 56(c)(3). 
  In determining whether there is a genuine issue as to any material fact, we
  will accept as true all allegations made in opposition to the motion for
  summary judgment, so long as they are supported by admissible evidence. 
  Politi, 170 Vt. at 431, 751 A.2d  at 790.      

       ¶  8.  In order to sustain a legal malpractice claim, plaintiffs
  have the burden of proving that defendant was negligent and that this
  negligence was the proximate cause of harm to plaintiffs.  Powers v. Hayes,
  172 Vt. 535, 536, 776 A.2d 374, 375 (2001) (mem.).  Pursuant to 12 V.S.A. §
  511, plaintiffs had six years in which to bring their malpractice claim
  once the cause of action had accrued.  See 12 V.S.A. § 511; Fitzgerald v.
  Congleton, 155 Vt. 283, 293, 583 A.2d 595, 601 (1990) (holding that legal
  malpractice claims alleging economic loss are governed by statute of
  limitations in § 511).  For purposes of the limitation period, accrual
  occurs at the time the injury is discovered.  Howard Bank, N.A. v. Estate
  of Pope, 156 Vt. 537, 538, 593 A.2d 471, 472 (1991).  The time limit begins
  to run at that point in time when the "plaintiff had information, or should
  have obtained information, sufficient to put a reasonable person on notice
  that a particular defendant may have been liable for the plaintiff's
  injuries."  Rodrigue v. VALCO Enters., Inc., 169 Vt. 539, 541, 726 A.2d 61,
  63 (1999) (mem.); Peltz v. Shidler, 952 P.2d 793, 796 (Colo. Ct. App. 1997)
  ("The focus is on a plaintiff's knowledge of facts that would put a
  reasonable person on notice of the general nature of damage and that the
  damage was caused by the wrongful conduct of an attorney.").  Plaintiffs do
  not claim here that the knowledge element of the alleged wrongful conduct
  was absent; they concede that there was knowledge of the conduct as early
  as August 1994 when plaintiffs represented to the Board that defendant had
  done an inadequate job in presenting evidence for the Board's review.

       ¶  9.  Plaintiffs assert, however, that the trial court did err in
  concluding that the malpractice action accrued before the appeal to this
  Court was dismissed on December 5, 1995 because, they argue, until that
  time the very existence of damages was questionable.  Plaintiffs contend
  the trial court incorrectly determined that damages were present in 1994
  and thus erroneously concluded that plaintiffs' cause of action accrued in
  1994.  Plaintiffs would have us adopt, in place of the discovery rule, an
  "exhaustion of appeals" approach, which would either toll the time
  limitation or defer the timing of accrual in a malpractice case until the
  appeals process is finally concluded in the underlying proceeding.  We
  decline to do so in this case.  

       ¶  10.  The Legislature's enactment of time limits represents the
  desire to achieve a balance between the competing interests of the parties, 
  Inv. Props., Inc. v. Lyttle, 169 Vt. 487, 492, 739 A.2d 1222, 1226-27
  (1999), and in time, "the right to be free of stale claims . . . comes to
  prevail over the right to prosecute them."  Order of R.R. Telegraphers v.
  Ry. Express Agency, 321 U.S. 342, 349 (1944).  In the effort to obtain such
  a balance and carry out the legislative intent, we have utilized the
  discovery rule.  The discovery rule simply provides a starting point for
  the six-year limitations period; the plaintiff's case need not be
  "airtight" before the limitations period commences.  Rodrigue, 169 Vt. at
  540-41, 726 A.2d  at 63.  
        
       ¶  11.  Only a small number of jurisdictions use the "exhaustion of
  appeals" approach that plaintiffs urge here.  Significantly, each of the
  jurisdictions cited by plaintiffs for the direct use of this approach have
  comparatively short two-year limitations periods to enforce legal
  malpractice claims.  See Joel Erik Thompson, Ltd. v. Holder, 965 P.2d 82,
  82, 84 (Ariz. Ct. App. 1998) ("When legal malpractice occurs in the course
  of litigation, the malpractice claim does not accrue, and the statute of
  limitations does not start to run, until the appellate process in the
  underlying litigation is completed or is waived by a failure to appeal.")
  (internal quotation marks omitted); Silvestrone v. Edell, 721 So. 2d 1173,
  1175, 1175 n.2 (Fla. 1998) ("[T]he statute of limitations does not commence
  to run until the final judgment becomes final."; "[A] judgment becomes
  final either upon the expiration of the time for filing an appeal . . . or,
  if an appeal is taken, upon the appeal being affirmed . . . ."); Apex
  Towing Co. v. Tolin, 41 S.W.3d 118, 119, 120 (Tex. 2001) ("When an attorney
  commits malpractice in the prosecution or defense of a claim that results
  in litigation, the statute of limitations on a malpractice claim against
  that attorney is tolled until all appeals on the underlying claim are
  exhausted or the litigation is otherwise finally concluded.").  Thus, the
  policy concern - that a client will have to adopt inherently inconsistent
  litigation postures in the underlying case and the malpractice case - is
  not as strong here where the statute of limitations is six years.  We note
  that after plaintiffs' appeal to this Court was dismissed, over four years
  still remained in which they could file their malpractice action pursuant
  to the limitations period, yet plaintiffs chose to wait five and one-half
  years from dismissal of the appeal before filing their claim.  Cf. Belden
  v. Emmerman, 560 N.E.2d 1180, 1182-83 (Ill. App. Ct. 1990) (declining to
  apply "exhaustion of appeals" approach where the plaintiffs had notice of
  sufficient information regarding the existence of damages on the date of
  the trial court's order and noting that the plaintiffs had ample time to
  file the malpractice claim within the five-year limitations period even
  after the appellate court's decision).  Finally, such an approach would
  frustrate the balance intended by the Legislature by allowing a plaintiff
  to unfairly manipulate the time in which to bring the action despite his or
  her earlier discovery of the defendant's potential liability for an injury.
        
       ¶  12.  In further support of their contention that legal malpractice
  claims arising in the context of litigation may not accrue until a decision
  has been finalized through the appeals process, plaintiffs cite cases
  holding that the statute of limitations does not begin to run until the
  litigation is concluded by final judgment.  See, e.g., Lucey v. Law Offices
  of Pretzel & Stouffer, 703 N.E.2d 473, 479 (Ill. App. Ct. 1998) ("Illinois
  courts have frequently recognized . . . a cause of action for legal
  malpractice will rarely accrue prior to the entry of an adverse judgment,
  settlement, or dismissal of the underlying action in which plaintiff has
  become entangled due to the purportedly negligent advice of his
  attorney."); Kopicko v. Young, 971 P.2d 789, 791 (Nev. 1998) ("malpractice
  action . . . did not accrue until dismissal because no legal damages had
  yet been sustained as a result of the alleged negligence.").  Plaintiffs
  claim, in part, that accrual must wait because the viability of the
  malpractice action depends on the outcome of the underlying litigation.  We
  agree to the extent that plaintiffs could not have maintained a cause of
  action prior to the adverse judgment of the Water Resources Board.  See
  Lucey, 703 N.E.2d  at 478 ("When uncertainty exists as to the very fact of
  damages, as opposed to the amount of damages, damages are speculative, and
  no cause of action for malpractice can be said to exist.") (internal
  citation omitted).  On the facts of this case, however, we do not believe
  accrual must linger until the conclusion of the appeals process.  A cause
  of action may still exist where uncertainty only as to the amount of
  damages is present, and the plaintiff can recover additional attorney's
  fees or litigation costs incurred due to the defendant-attorney's neglect
  or failure to act.  Id.; see also Bourne v. Lajoie, 149 Vt. 45, 53, 540 A.2d 359, 363-64 (1987) (holding that the plaintiff in a legal malpractice
  action suffered damages in the form of legal fees and expenses she incurred
  in an attempt to correct the defendant-attorney's mistake despite the fact
  that the legal proceedings would eventually result in a correction of the
  mistake).  

       ¶  13.  Although the appeals process had not concluded, the Water
  Resources Board had issued an adverse decision of which plaintiffs had
  notice.  While plaintiffs' desire to bring a claim may have been dependent
  on the outcome of the appeals process due to the amount of damages they
  would receive, the viability of their claim in this case was not dependent
  on the outcome.  For example, plaintiffs suffered an injury when, following
  the adverse decision of the Water Resources Board, they hired new counsel
  and incurred legal expenses for filing the motions to correct the decision
  and to supplement the record of appeal, as a direct result of defendant's
  failure to supplement the record before the Board.  See, e.g., Bourne, 149
  Vt. at 53, 540 A.2d at 363-64; Peltz, 952 P.2d  at 796 ("Once a client
  becomes aware of the attorney's negligence and incurs damage in the form of
  legal fees to ameliorate the impact of that negligence, he or she has
  suffered injury for the purpose of accrual of a legal claim.").  Indeed,
  plaintiffs themselves made exactly this argument at the hearing on the
  motions by blaming defendant's "inadequate job" for the failure to present
  evidence.  Thus, if we are to believe plaintiffs' own argument, the motions
  - and resulting legal expenses - would not have been necessary but for
  defendant's conduct.  Additionally, we find plaintiffs' current argument,
  speculating that they would have incurred these fees regardless of
  defendant's conduct, to be without merit for the purposes of accrual.  Cf.
  Bourne, 149 Vt. at 53, 540 A.2d  at 364 (declining to award damages based on
  missed sale opportunities where such damages were based on mere speculation
  and were unsupported by evidence). 

       ¶  14.  Although the extent of damages may not have been known,
  plaintiffs had notice of sufficient information surrounding the general
  nature of damages, and they knew that defendant may have been liable for
  such injury, by December 9, 1994.  Plaintiffs waited more than six years
  from that date to file their claim, and thus it was time-barred by the
  statute of limitations contained in 12 V.S.A. § 511.    

       Affirmed.

                                       BY THE COURT:



                                       _______________________________________
                                       Jeffrey L. Amestoy, Chief Justice

                                       _______________________________________
                                       Denise R. Johnson, Associate Justice
  ¨  
                                       _______________________________________
                                       Marilyn S. Skoglund, Associate Justice

                                       _______________________________________
                                       Ernest W. Gibson III, Associate 
                                       Justice (Ret.) Specially Assigned


------------------------------------------------------------------------------
                                  Footnotes

  Note:  Justice Dooley sat at oral argument but did not participate in this
         decision.


FN1.  Plaintiffs' previous attorney withdrew from the case because he
  retired from the practice of law.

FN2.  Plaintiffs had previously filed a separate action alleging negligence
  and breach of contract against the engineering firm that designed the first
  wastewater system.  See Fritzeen v. Trudell Consulting Eng'rs, Inc., 170
  Vt. 632, 751 A.2d 293 (2000) (mem.).




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