Ahmad S. Vossoughi and C, N, & A, Inc. v. Joseph A. Polaschek and Michael J. Meloy, 2015 Iowa Sup. LEXIS 14

Ahmad Vossoughi and his company C, N, & A, Inc. sold a business (Oasis) and adjoining real estate in 2006 via three agreements (asset purchase, noncompetition, and real estate contract) and an addendum that purported to cross-collateralize obligations.
The addendum did not create a perfected security interest or mortgage; Vossoughi believed the real estate would secure all payment obligations.
In March 2007 Vossoughi executed and recorded a warranty deed transferring the real estate to buyer PPM; defendant attorney Polaschek prepared and recorded the deed but did not include the addendum language as he had orally promised.
Buyers continued payments until February 2008, then defaulted; buyers later obtained a bank mortgage and filed bankruptcy, and plaintiffs’ contract claims were discharged in bankruptcy, leaving plaintiffs with unsecured, discharged claims.
Plaintiffs sued both attorneys for legal malpractice (claims against Meloy initially dismissed and refiled); the district court granted summary judgment to both defendants; the Iowa Supreme Court reviews accrual, discovery rule, and causation/collectability issues and reverses and remands.

Issue	Plaintiff's Argument	Defendant's Argument	Held
When did the statute of limitations on malpractice against Meloy begin to run?	Limitations began when plaintiffs suffered actual injury—i.e., when buyers stopped paying (Feb 2008) or when bankruptcy discharged claims—so the 2012 suit is timely.	Limitations began when deed was signed (Mar 29, 2007) or recorded (Apr 9, 2007); plaintiff’s signature/recording imputed knowledge and started the clock.	Court: Accrual requires actual, nonspeculative injury; insecurity alone is insufficient. Claims did not accrue until at least Feb 2008, so Meloy summary judgment was erroneous.
Whether Polaschek’s failure to include/record addendum language was a factual cause of plaintiffs’ damages (collectability).	Recording the addendum language might have deterred a risk-averse lender and prevented American Bank & Trust from mortgaging and foreclosing; expert testimony supports a jury question on collectability.	Even if deed lacked addendum, buyer bankruptcy and mortgage would have independently made recovery impossible; thus no ‘‘but for’’ causation as a matter of law.	Court: Genuine factual dispute exists—experts conflict about practical effect of recording the addendum—so causation/collectability is for the trier of fact; summary judgment for Polaschek was erroneous.

Neylan v. Moser, 400 N.W.2d 538 (Iowa 1987) (accrual when alleged malpractice produces actual, irreversible injury rather than speculative harm)
Franzen v. Deere & Co., 377 N.W.2d 660 (Iowa 1985) (discovery rule and accrual when plaintiff has knowledge of all elements)
Ruden v. Jenk, 543 N.W.2d 605 (Iowa 1996) (malpractice requires proof of actual injury, loss, or damage)
Pickens, Barnes & Abernathy v. Heasley, 328 N.W.2d 524 (Iowa 1983) (plaintiff suing for lost recovery must prove both amount of judgment and its collectability)
Burke v. Roberson, 417 N.W.2d 209 (Iowa 1987) (collectability is required when lost recovery is the alleged malpractice damage)
Wolfswinkel v. Gesink, 180 N.W.2d 452 (Iowa 1970) (no cause of action accrues until breach produces actual loss)
Huber v. Hovey, 501 N.W.2d 53 (Iowa 1993) (signature may impute knowledge of contract contents, but accrual still depends on actual injury)