Holly J. Sheldon-Lee v. Birch Horton Bittner, Inc., David K. Gross, and Mara E. Michaletz
565 P.3d 985
Alaska2025Background
- Holly Sheldon-Lee sued her former attorneys, Birch Horton Bittner, Inc. (BHBC), for legal malpractice after she, and her company SAS, entered an unfavorable settlement in a trust dispute involving family property.
- She alleged her lawyers failed to protect her interests during a December 2015 mediation, resulting in a binding settlement that she considered unfair.
- After the mediation, Sheldon-Lee sought a second legal opinion, formally substituting counsel in early 2016 but continued to communicate with BHBC regarding related legal issues into 2017.
- In 2020, more than three years after the mediation, Sheldon-Lee filed the malpractice lawsuit. The superior court granted summary judgment to BHBC, holding the claim was time-barred by the statute of limitations, and denied leave to amend her complaint to add conflict-of-interest-based claims for fee disgorgement.
- On appeal, the Alaska Supreme Court reversed, holding (1) a genuine factual dispute existed about the end date of representation under the continuous representation doctrine, and (2) the superior court abused its discretion in denying leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Statute of Limitations—Continuous Representation Rule | Claim timely due to continued representation post-mediation | Claim accrued by mediation or counsel substitution date | Continuous representation rule adopted; factual dispute bars summary judgment |
| Equitable Estoppel | BHBC concealed conflicts, estopping statute of limitations defense | No concealment or reliance, so not estopped | No evidence of reasonable reliance; no estoppel found |
| Motion to Amend Complaint (Conflict/Fee Disgorgement) | Sought to amend for conflict-based disgorgement claims | Amendment futile as conflicts not legally sufficient | Denial was error; factual disputes make amendment not futile |
| Discovery Rule/Accrual Date | Did not discover malpractice facts until much later | Plaintiff was on notice by mediation or soon after | Discovery rule does not delay accrual beyond 2016; but irrelevant under continuous representation |
Key Cases Cited
- Wettanen v. Cowper, 749 P.2d 362 (Alaska 1988) (articulates continuous representation rule in legal malpractice context)
- Beesley v. Van Doren, 873 P.2d 1280 (Alaska 1994) (addresses accrual and continuous representation rationale in malpractice claims)
- Preblich v. Zorea, 996 P.2d 730 (Alaska 2000) (discusses inquiry notice for accrual in malpractice claims)
- Sharrow v. Archer, 658 P.2d 1331 (Alaska 1983) (sets out equitable estoppel doctrine for fraudulent concealment and statutes of limitation)