Colwell v. Mullen
918 N.W.2d 858
Neb.2018Background
- Dr. Robert F. Colwell, Jr. (and his professional corporation) retained Sean Mullen (an attorney/accountant) to form corporate entities and provide tax/accounting services related to a 50% purchase of a dental practice (Midlands).
- Mullen also assisted Garvey (the other owner) in forming entities (Grobell, Vanguard) and provided services to multiple Midlands‑related entities. Colwell alleges he did not learn of several transfers/arrangements until 2011.
- Colwell terminated Mullen in April 2011, later sued Garvey (settled Dec. 2011), and filed this malpractice suit against Mullen on March 4, 2013. The complaint alleged multiple acts of legal/accounting malpractice (conflict of interest, employee transfers and leaseback fees, erroneous 2010 and 2011 K‑1s, overpayments to Garvey, and improper billing).
- The district court granted summary judgment for Mullen, holding most claims barred by Neb. Rev. Stat. § 25‑222 (two‑year malpractice statute with discovery and ten‑year outer limit). The court found many claims either time‑barred, not pled, or factually unsupported.
- On appeal Colwell argued tolling via the discovery exception, the continuous representation doctrine, or that continuing torts or discrete wrongful acts fell within the two‑year window. The Nebraska Supreme Court affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether malpractice claims accrued within § 25‑222 or are time‑barred | Colwell: many wrongful acts were discovered in 2011 and thus were within the two‑year window for a March 2013 filing | Mullen: acts occurred earlier (pre‑March 2011) so claims are barred by the two‑year limit | Court: accrual is when plaintiff had the right to sue; key acts (e.g., 2010 K‑1) were discovered by Jan/Feb 2011 and thus outside the two‑year window; summary judgment affirmed |
| Applicability of the § 25‑222 1‑year discovery tolling provision | Colwell: could not reasonably discover some malpractice until 2011, so tolling applies | Mullen: Colwell knew or should have known earlier; discovery exception not satisfied | Court: discovery exception is tolling only when plaintiff could not reasonably have discovered the cause within the statutory period; here discovery occurred prior to the limitations cutoff, so tolling fails |
| Whether continuous representation tolls the limitations period | Colwell: ongoing professional relationship with Mullen on related matters tolled the statute | Mullen: any continuity was general and did not concern the same/related subject matter after the alleged negligence; some matters Mullen did not represent Colwell on at all | Court: tolling requires continuity of relationship/services on same or related subject matter after the negligence; general ongoing representation insufficient; doctrine inapplicable |
| Whether alleged conduct constitutes a continuing tort | Colwell: transfers/leaseback fees, Vanguard, and other conduct were continuing wrongful acts extending into limitations period | Mullen: alleged continuing harm was merely lingering effects of earlier acts, not new tortious acts within the period | Court: continuing tort requires tortious acts within the limitation period (not just continuing effects); here injuries were effects of earlier acts and not continuing torts; claim fails |
Key Cases Cited
- Behrens v. Blunk, 284 Neb. 454 (statute of limitations accrual and discovery tolling principles in professional‑malpractice cases)
- Jordan v. LSF8 Master Participation Trust, 300 Neb. 523 (summary judgment standard on appeal)
- Reinke Mfg. Co. v. Hayes, 256 Neb. 442 (continuous representation tolling requires continuity of services on same subject matter)
- Alston v. Hormel Foods Corp., 273 Neb. 422 (continuing tort doctrine requires tortious acts within the limitation period)
- American Fam. Mut. Ins. Co. v. Hadley, 264 Neb. 435 (pleadings not presented to or decided by the trial court need not be addressed on appeal)