Joseph P. Donovan v. G. Todd Burwell
199 So. 3d 725
Miss. Ct. App.2016Background
- Donovan, a former officer/shareholder of two ambulance companies, was assessed large state payroll-tax liabilities by the Mississippi State Tax Commission and assessed penalties by the IRS for unpaid federal payroll taxes.
- Donovan retained Burwell to represent him before the Tax Commission (appeals from a Board of Review decision) and the IRS (formal protest). The Board of Review reduced but sustained liability in an order dated November 15, 2006; the Tax Commission issued a final affirmance in May 2008 after hearings and an appeal process.
- Burwell appealed the Board ruling to the full Tax Commission; procedural errors/dates were contested (including an initially untimely appeal that was reinstated). Donovan could not perfect a chancery-court appeal because he could not post the required bond, making the Tax Commission ruling final.
- Burwell mailed a protest to the IRS within the statutory timeframe, but the IRS initially deemed it untimely; Burwell produced affidavits showing timely mailing. The IRS Office of Appeals later sustained the assessment (2010), but on Tax Court remand the IRS conceded timeliness and ultimately dismissed the federal assessments.
- Donovan sued Burwell (January 7, 2011) for legal malpractice based on both the Tax Commission and IRS representations. The circuit court granted summary judgment for Burwell: holding the Tax Commission-related claim time-barred (due to an erroneous date conclusion) and that no malpractice occurred as to the IRS matter. On appeal, the court reversed as to the Tax Commission claim and affirmed as to the IRS claim, and remanded for further proceedings on the Tax Commission claim.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Donovan's Tax Commission malpractice claim is time-barred under the 3-year statute | Donovan contends the claim accrued only when the Tax Commission issued its final written order (May 2008), so the 2011 complaint is timely | Burwell argues the claim accrued when the Board of Review issued its adverse order (Nov 15, 2006), making the 2011 suit untimely | Court held the discovery rule applies; the Board’s terse Nov 15, 2006 order did not put a layperson on notice of malpractice, so the claim was not time-barred (reversed and remanded) |
| Whether the Board of Review’s short, unexplained order triggered accrual under the discovery rule | Donovan: a one-sentence administrative order without reasoning does not reasonably notify a lay client of attorney negligence | Burwell: the public adverse order put Donovan on notice and started the limitations period | Court held the Board order lacked sufficient substance to charge a lay client with notice; discovery rule tolls limitations here |
| Whether Burwell committed malpractice in IRS representation by filing untimely protest or failing to use prescribed IRS methods | Donovan alleges Burwell’s protest filing and initial case development were negligent and caused litigation costs and fees | Burwell points to the IRS ultimately conceding timeliness and dismissal of assessments, arguing no negligence or causation | Court held IRS concession of timeliness revealed IRS—not Burwell—was at fault; and because Donovan ultimately avoided liability, he cannot show proximate causation or compensable injury (affirmed) |
| Whether Donovan can prove negligence and proximate cause for IRS-related malpractice (fees/injury) | Donovan (and successor counsel) say Burwell’s inadequate factual development forced extra counsel work and fees | Burwell: no evidence that alleged shortcomings caused additional fees or any recoverable injury; ultimate dismissal shows no liability resulted | Court held Donovan failed to show negligence or proximate causation (no genuine issue of material fact), so summary judgment affirmed on IRS claim |
Key Cases Cited
- Evans v. Howell, 121 So.3d 919 (Miss. Ct. App. 2013) (applies discovery rule to legal malpractice accrual)
- Channel v. Loyacono, 954 So.2d 415 (Miss. 2007) (discovery rule standards for malpractice accrual)
- Spann v. Diaz, 987 So.2d 443 (Miss. 2008) (public opinion that explicitly identifies counsel error can trigger accrual)
- Lancaster v. Stevens, 961 So.2d 768 (Miss. Ct. App. 2007) (elements of legal malpractice claim: relationship, negligence, proximate cause)
- Crist v. Loyacono, 65 So.3d 837 (Miss. 2011) (requiring proof of success in underlying action to establish proximate cause in malpractice)