Legal Malpractice Update

MDTC Professional Liability Section

By: Michael J. Sullivan and David C. Anderson, Collins Einhorn Farrell P.C.

michael.sullivan@ceflawyers.com david.anderson@ceflawyers.com

Legal-Malpractice Update
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The two-year statute of limitations barred the defendant’s legal-malpractice claim alleged in response to a law firm’s complaint to collect unpaid fees. The statute of limitations also barred the defendant’s breach-of-contract and negligent-infliction-of-emotional-distress claims, as they were indistinguishable from the legal-malpractice claim. The defendant’s dismissal request under the doctrine of forum non conveniens was also properly denied where the only fact in support of request was that the defendant relocated to a different state.

Law Firm v Finch, unpublished opinion per curiam of the Court of Appeals, issued July 12, 2016 (Docket No. 327400), 2016 WL 3749388.

Facts: The plaintiff law firm represented the defendant in post-judgment proceedings after his divorce. While the plaintiff represented the defendant for several years in various custody-related matters, the plaintiff eventually filed a motion to withdraw as the defendant’s counsel, and the Court granted the motion on March 2, 2012. Over two years later, the plaintiff filed a complaint on April 29, 2014, seeking unpaid attorney fees. The defendant then filed a counterclaim on November 24, 2014, alleging legal malpractice, breach of contract, and negligent infliction of emotional distress. The defendant also requested that the lawsuit be dismissed based on the doctrine of forum non conveniens because he had relocated to Texas.

The plaintiff moved for summary disposition pursuant to MCR 2.116(I), arguing that the statute of limitations barred all of the defendant’s claims (the Court of Appeals commented in a footnote that it was odd that the motion was brought under MCR 2.116(I), as opposed to MCR 2.116(C)(7), although it was still properly considered under MCR 2.116(I)). The Court granted the motion, and the defendant appealed.

Ruling: The Court of Appeals affirmed the trial court’s ruling, holding that the statute of limitations contained in MCL 600.5838b and 600.5805(6) barred all of the defendant’s claims. The Court rejected the defendant’s argument that the statute of limitations for malpractice cases is six years. The Court cited MCL 600.5838b, which provides in pertinent part:

(1) An action for legal malpractice against an attorney-at-law or a law firm shall not be commenced after whichever of the following is earlier:
(a) The expiration of the applicable period of limitations under this chapter.
(b) Six years after the date of the act or omissions that is the basis for the claim.

(2) A legal malpractice action that is not commenced within the time prescribed by subsection (1) is barred.

The Court also quoted MCL 600.5805(6), which states “the period of limitations is 2 years for an action charging malpractice,” and cited well-established case law demonstrating the applicable statute of limitations for legal-malpractice claims is two years. Id. at *2, citing Sam v Balardo, 411 Mich 405, 417; 308 NW2d 142 (1981); Kloian v Schwartz, 272 Mich App 232, 237; 725 NW2d 671 (2006).

The Court found the defendant’s contention that the statute of limitations was six years confused the statute of limitation with the statute of repose. Explaining the difference between the two, the Court stated:

While statutes of repose and statutes of limitation both create temporal barriers to a claim's viability, each functions differently. A statute of repose prevents a cause of action from ever accruing when the injury is sustained after the designated statutory period has elapsed. A statute of limitation, however, prescribes the time limits in which a party may bring an action that has already accrued. Unlike a statute of limitation, then, a statute of repose may bar a claim before an injury or damage occurs. [Id., quoting Frank v Linkner, 310 Mich App 169, 179; 871 NW2d 363 (2015), lv gtd, 499 Mich 859; 873 NW2d 591 (2016).]

Having dismissed the defendant’s lega- malpractice claim, the Court then dismissed the defendant’s breach-of-contract and negligent-infliction-of-emotional-distress claims for the same reason. The Court reasoned that the two claims were “indistinguishable” from the legal- malpractice claim, and were “based entirely on plaintiff’s alleged failure to adequately represent [defendant]”—consequently, the claims were legal-malpractice claims even though they were titled differently.

In making its decision, the Court cited the specific language in the defendant’s counterclaims. The defendant’s breach-of-contract claim alleged that “plaintiff breached the parties’ contract by failing ‘to provide ethical and competent legal representation,’” while the negligent-infliction-of- emotional-distress claim alleged that the plaintiff failed “to fulfill its ‘general obligation and duty to Defendant with respect to representation and conduct of the relationship’ by failing to act ‘with the appropriate care and diligence required.’” Id. at *3. The legal-malpractice claim was all too similar, alleging that the “plaintiff committed legal malpractice by failing to fulfill its ‘professional obligation and duty to Defendant with respect to representation’ by failing to act ‘with the degree of professionalism, diligence, and care required.’” The Court stated that “‘[t]he type of interest harmed, rather than the label given the claim, determines what limitations period controls,’” and held the two-year statute of limitations applied to the claims. Id., quoting Seebacher v Fitzgerald, Hodgman, Cawthorne & King, PC, 181 Mich App 642, 646; 449 NW2d 673 (1989).

Last, the Court addressed the defendant’s contention that the case should be dismissed under the doctrine of forum non conveniens. The Court described the doctrine as giving “discretionary power to decline jurisdiction when the convenience of the parties and the end of justice ‘would be better served if the action were brought and tried in another forum.’” Id., quoting Hernandez v Ford Motor Co, 280 Mich App 545, 551; 760 NW2d 751 (2008). The Court set out the required considerations of the doctrine, which are “(1) whether the forum is inconvenient and (2) whether a more appropriate forum exists,” and explained that within such a framework, the courts should give attention to “the private interest of the litigants, matters of public interest, and the defendant’s promptness in making the request.” Id. (internal citations omitted).

The defendant’s only argument to invoke the doctrine was that he relocated to Texas, and therefore Texas would be a more convenient forum. The Court disagreed, upholding the trial court’s reasoning that Michigan was the most convenient because “the contract between plaintiff and defendant was executed in Michigan, all legal representation performed by plaintiff on behalf of defendant was in Michigan, and all anticipated witnesses were in Michigan.” Id. at *4.

Practice Note: The two-year statute of limitations for legal-malpractice claims applies equally to a plaintiff's claims, regardless of how artfully pled or titled, if the claims are based on inadequate representation. As a separate note, it is a good business practice to wait two years after representation ends to bring an action to collect fees, as former clients may file retaliatory malpractice claims which might then be dismissed on statute of limitation grounds.

The authors acknowledge the valuable assistance of Jason M. Renner, an associate of the firm.

Categories: Volume 7-2

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