Evans v. Howell
2013 Miss. App. LEXIS 125
Miss. Ct. App.2013Background
- Evans and Giordano co-owned Evans/Giordano, Inc. (EGI) as 50/50 stockholders; Howell drafted the buyout-related documents.
- The 1996 Purchase and Sale Agreement (for EGI stock) was the only agreement then, not covering sister companies SRS, IPS, INS, or EGF.
- By 2004 Evans/Giordano formed four additional companies; a 2004 “buyout for all five companies” was drafted but not signed.
- A March 2005 agreement stated that the prior valuation was increased to $3,000,000 and was intended to fund a buyout using life insurance; Evans and Giordano signed this agreement.
- Giordano died May 25, 2006; Evans later asserted Howell’s negligence in failing to draft a comprehensive 2005 agreement; Evans filed a legal-malpractice suit on May 18, 2009.
- The circuit court granted summary judgment, holding the three-year statute of limitations had expired before Evans filed suit; Evans appeals.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does the statute of limitations accrue in a legal-malpractice claim? | Evans argues accrual began when Giordano’s estate sued him (Nov. 1, 2006). | Howell argues accrual began when the 2005 agreement was signed (Mar. 10, 2005). | Accrual is determined by discovery rule; in this case, majority holds accrual began Mar. 10, 2005. |
| Does the discovery rule toll accrual in Evans’s case? | Evans contends discovery should toll due to complexity and inability to detect negligence early. | Howell contends no tolling since the 2005 agreement clearly shows scope. | Yes, the discovery rule applies; plaintiffs not required to discover malpractice at the moment it occurs. |
| Is the 2005 agreement unambiguous in scope (EGI only or all five corporations), affecting accrual? | Evans argues ambiguity; the 2005 sentence references the 1996 buy/sell context, potentially covering all five entities. | Howell argues the 2005 agreement unambiguously refers to the 1996 EGI-only agreement. | The majority holds the 2005 agreement is clear and unambiguous, referencing the prior EGI-only valuation. |
Key Cases Cited
- Channel v. Loyacono, 954 So.2d 415 (Miss. 2007) (discovery rule applicable when layperson cannot readily detect malpractice)
- Smith v. Sneed, 638 So.2d 1252 (Miss. 1994) (discovery rule starts when client learns of negligence)
- Bennett v. Hill-Boren, P.C., 52 So.3d 364 (Miss. 2011) (reaffirms discovery rule in legal malpractice)
- Stephens v. Equitable Life Assurance Society of the United States, 850 So.2d 78 (Miss. 2003) (trusts accrual at time of contracting injury; relevance to discovery rule)
- Archer v. Nissan Motor Acceptance Corp., 633 F.Supp.2d 259 (S.D. Miss. 2007) (contract terms apparent on face may fix accrual without tolling)