Loren HENNEKENS, Plaintiff-Appellant, v. Donald R. HOERL and St. Paul Fire & Marine Insurance Company, Defendants-Respondents.
No. 89-1508
Supreme Court
Decided February 20, 1991
465 N.W.2d 812
Argued October 5, 1990.
For the defendants-respondents there was a brief (in the court of appeals) by Douglas J. Klingberg, Steven M. Anderson and Ruder, Ware & Michler, S.C., Wausau and oral argument by Mr. Klingberg.
LOUIS J. CECI, J. This case is before the court on certification from the court of appeals, pursuant to
Hennekens appeals from a judgment of the circuit court for Wood County, John V. Finn, Circuit Judge. The circuit court granted summary judgment in favor of Hoerl and St. Paul (collectively “the defendants“), dismissing the complaint filed against them. In granting summary judgment, the court ruled that the statute of limitations applicable to the claim Hennekens made against the defendants had run prior to the time Hennekens commenced the action. The court further held that the second ground advanced by the defendants fоr summary judgment, that Hennekens had suffered no actual damage, was without merit.1
There are two issues raised by this appeal. The first issue is when Hennekens suffered actual damage. The second issue is whether Hennekens knew or, in the exercise of reasonable diligence, should have known of his actual damage more than six years prior to the time he commenced this action.2
We hold that Hennekens suffered actual damage to his legal rights and interests on August 16, 1981, when he remained liable on the promissory note even though
The facts of this case follow. The facts relevant to this appeal are not in dispute.3 On July 17, 1981, Hennekens entered into a land purchase agreement. Hoerl represented Hennekens in the transaction. Under the agreement, Hennekens agreed to buy the land from one Gene Crotteau (Crotteau), free and clear of all encumbrances, for $225,000.00 and other consideration. Hennekens signed a promissory note for that amount due on or before August 16, 1981, and received a warranty deed subject to existing mortgages, judgments, and unpaid taxes. The note was secured by a mortgage on the property in question.
On the same date, Hennekens signed a separate agreement under which, upon closing of the land transaction, he would make a $14,500.00 payment to Crotteau on both the first and second anniversaries of the date of the agreement. These payments were additional consideration to compensate Crotteau for conducting preliminary studies to determine the suitability of the land in question for use as a sanitary landfill. That agreement stated: “In the event that the sale is not consummated, the property reverts to Crotteau, and this Agreement shall be null and void.”
This payment is now almost two months past due, and you have done nothing to satisfy this obligation. As you well know, Mr. Crotteau‘s situation with regard to this particular real estate is really delicate. Unless you can pay this obligation in full within the next ten days or two weeks, it is very doubtful that this real estate will be available for your use at all.
In order to protect his own position in this matter, I must recommend that Mr. Crotteau commence a foreclosure action against you on the note and mortgage which you signed. This we will proceed to do if we have not received payment from you by October 27.
The record shows that Attorney Doyle‘s reference to Crotteau‘s “really delicate” situation refers to Hennekens’ knowledge that there were liens on the property he was buying which Crotteau intended to satisfy with the money Hennekens owed Crotteau.
Hennekens did not satisfy the note by October 27, 1981. However, Crotteau did not immediately commence a foreclosure action against Hennekens. It was not until August 19, 1985, that Crotteau filed an action on the promissory note. In the interim, Thorp Financing Corporation (Thorp) foreclosed on Crotteau‘s interest in the property in question.
In 1982, Hennekens purchased the property in question from Thorp for $68,700.00. On December 16, 1987, Crotteau obtained a judgment against Hennekens for $210,481.98. That was the amount Hennekens owed on
The record shows that Hennekens incurred substantial attorney‘s fees in defending the action Crotteau brought against him on the promissory note. On August 5, 1988, Hennekens commenced this action against the defendants.
The defendants subsequently brought a motion for summary judgment against Hennekens, arguing that his claim was barred by the statute of limitations and that he did not have a claim for relief because he had not suffered any actual damage.4
The circuit court heard the motion for summary judgment on April 27, 1989. By order entered June 14, 1989, the circuit court granted summary judgment to the defendants, dismissing the complaint filed against them. In granting the motion, the court ruled that Hennekens’ claim was barred by the statute of limitations. Hennekens appealed from the judgment of the circuit court, and the court of appeals certifiеd the appeal to this court.
In reviewing the grant of a motion for summary judgment, this court applies the standards set forth in
The first issue presented by this case is when Hennekens suffered actual damage as a result of Hoerl‘s alleged negligence. The facts relevant to this issue are undisputed. Furthermore, the parties do not draw competing inferences from the facts relevant to this issue. Accordingly, we must decide whether the defendants were entitled to judgment as a matter of law.
A claim for relief accrues when “there exists a claim capable of present enforcement, a suable party against whom it may be еnforced, and a party who has a present right to enforce it.” Barry v. Minahan, 127 Wis. 570, 573, 107 N.W. 488 (1906).5 A tort claim is not “capable of present enforcement” until the plaintiff has suffered actual damage.6 Actual damage is harm7 that has already
The trial court found that Hennekens suffered an injury as a result of Hoerl‘s alleged negligence when he remained liable on the promissory note for $225,000.00 and did not receive the land he bargained for in exchange for the $225,000.00. The defendants agree with the trial court‘s finding and its conclusion that Hennekens suffered that damage prior to the date of Attorney Doyle‘s letter: October 13, 1981.
Hennekens contends that he did not suffer actual damage until August 19, 1985, when Crotteau filed suit against him on the promissory note and he incurred attorney‘s fees in defending against the suit. Hennekens reasons that he was not damaged prior to August 19, 1985, because he had suffered no monetary loss as of that date.
We disagree. Monetary loss is not the only form of actual damage. One form of actual damage is injury to a
In Boehm, the plaintiffs brought two claims for legal malpractice against their attorneys. The first claim was for failing to file a patent application within one year after they were advised that the plaintiffs had sold a patentable good and placed it in public use. It was undisputed that such a failure precluded the plaintiffs from obtaining a patent on the good in question. Boehm, 65 Wis. 2d at 671-72.
The second claim was for incorrectly advising the plaintiffs that they could allow a third party to inspect an invention they developed without losing any common law trade secret rights in the invention. It was undisputed that the plaintiffs lost their common law trade secret rights in the invention by allowing the third party to inspect it. Id. at 672-73.
We held that the second claim accrued when the invention was disclosed to the third party. In so holding, we expressly rejected the plaintiffs’ contention that the claim did not accrue until the third party began marketing the product and the plaintiffs began to suffer a loss of the portion of profits or compensation they would have been entitled to as the inventors under trade secrets law. Id. We reasoned that the injury to the plaintiffs’ legal interests occurred when they sent the models to the third party and thereby lost their common law trade secret rights even though the plaintiffs had not suffered monetary loss as of that date. Id. at 679.
Our rationale in Boehm applies to the case at bar despite the fact that, as Justice Steinmetz‘s dissenting opinion, at 179, points out, we strongly suggested that the plaintiffs in Boehm suffered no injury in regard to their second claim. While we did suggest that the plaintiffs did not suffer any injury related to their second claim, we held that the cause of action was barred by the statute of limitаtions. We expressly held that “the trial court‘s determinations as to when the causes of action accrued are correct.” Id. at 678. Accordingly, the plaintiffs must have suffered some injury in regard to their second claim. Otherwise, their claim could not have accrued. See Holifield v. Setco Industries, Inc., 42 Wis. 2d 750, 755-56, 168 N.W.2d 177 (1969) (holding that a cause of action, or claim for relief, does not accrue until
On August 16, 1981, Hennekens stood in the same position as the plaintiffs in Boehm on the date we held their claims accrued. Hennekens, like the plaintiffs in Boehm, followed poor legal advice and, as a result, lost a legal right. In Boehm, it was the patent and common law trade secret rights. In Hennekens’ case, it was the right to rescind the transaction and avoid liability on the promissory note.
Justice Steinmetz‘s dissent, at 178, points out that the right Hennekens lost was not a property right. However, our holding in Boehm did not depend on the character of the right lost. Therefore, it is immaterial that the legal right lost in Boehm was a property right and the legal right lost in the case at bar is not a property right.
Accordingly, we are not persuaded by Justice Steinmetz‘s reliance on Boehm or by his reading of Denzer v. Rouse, 48 Wis. 2d 528, 180 N.W.2d 521 (1970). Dissenting opinion at 176-178. Due to the nature of the harm Hennekens suffered, it is irrelevant that Hennekens, unlike the plaintiffs in Denzer, did not consummate the real estate transaction by paying for and receiving the property.9 The damage Hennekens suffered was not
The relevant similarity between Hennekens and the plaintiffs in Denzer is that both suffered actual damage to their legal rights and interests when they received negligently drafted legal documents. In Denzer, the negligently drafted document was the warranty deed with an incorrect description of the property. Id. at 530. In the case at bar, the negligently drafted documents were the land purchase agreement and promissory note without financing contingency clauses.
The lack of the financing contingency clauses and the right to rescind which accompanies such clauses harmеd Hennekens’ legal rights and interests on the date the promissory note was due: August 16, 1981. On that date, Hennekens remained liable on the note notwithstanding the fact that he had not received, and could not receive, clear title to the land.
Such liability is actual damage under Denzer. The plaintiffs in Denzer did not become involved in litigation and incur attorney‘s fees until nearly twenty years after
Hennekens ignores Boehm and Denzer10 and cites authority from other jurisdictions which hold that a claim for legal malpractice does not accrue until the plaintiff/client incurs legal fees defending a lawsuit caused by the malpractice or until such litigation reaches final appellate resolution.11 We decline to overrule Boehm and Denzer in order to follow the cases cited by Hennekens.
The rule advanced by the cases Hennekens cites conflicts with the:
equitable principle underlying the statute of limitations, which is to allow plaintiffs their day in court, but also to protect defendants from having to deal with claims which defense against may be seriously impaired by stale or lost evidence.
balancing the plaintiff‘s right to seek redress against the duration of the defendant‘s exposure to liability and the possible prejudices due to delay. Both are concerns of justice.
Id.
The cases cited by Hennekens advance a rule that does not protect defendants from the prejudice caused by delay, such as stale or lost evidence. For example, if we adopted the rule that a legal malpractice plaintiff‘s claim does not accrue until the plaintiff/client incurs legal fees defending a suit caused by the malpractice, it is possible that the statute of limitations on a claim like Hennekens’ would not run until twelve years after the note was due.12 Furthermore, if we adopted the rule that a legal malpractice claim does not accrue until final appellate action on litigation caused by the malpractice ceases, it is possible that the statute of limitations on a claim like Hennekens’ would not run until fifteen years after the note was due.13
Boehm bettеr preserves the balance between the rights of plaintiffs and defendants than the rules
However, his claim did not necessarily accrue on that date. In Wisconsin, a claim for relief does not accrue until the potential plaintiff knows of14 or, in the exercise of reasonable diligence, should have discovered his ” ‘injury, its nature, its cause, and the identity of the allegedly responsible defendant.’ ” Spitler, 148 Wis. 2d at 635 (emphasis omitted) (quoting Borello v. U.S. Oil Co., 130 Wis. 2d 397, 420, 388 N.W.2d 140 (1986)). Therefore, the second issue presented by this appeal is whether Hennekens knew of or, in the exercise of reasonable diligence, should have discovered his injury more than six years before he commenced his action against the defendants.
The trial court found that Hennekens’ claim accrued on the date he received the demand letter from Crotteau‘s counsel: October 13, 1981. The trial court reasoned that as of that date, Hennekens knew:
the negligent act, namely the representation by the Defendant-Attorney, the injury and its nature, namely that he was subject to a liability on a note and сould not receive clear title to the real estate, the cause, namely the fact that there was no provision made at the July 17, 1981 meeting for the possibility that the Plaintiff may be unable to obtain financing, and the identity of the Defendant.
We agree with the trial court that Hennekens’ claim accrued on October 13, 1981, but disagree with the trial court‘s reasoning.15 Ordinarily, the issue of whether a plaintiff exercised reasonable diligence is a question of fact. Spitler, 148 Wis. 2d at 638 (citing Borello, 130 Wis. 2d at 404). However, when the facts and reasonable inferences that can be drawn from the facts are not in dispute, whether a plaintiff has exercised reasonable diligence is a question of law. See, e.g., Borello, 130 Wis. 2d at 414 (holding that the plaintiff was reasonably diligent as a matter of law); Tallmadge v. Skyline Construction, Inc., 86 Wis. 2d 356, 359-60, 272 N.W.2d 404 (Ct. App. 1978) (holding under legislatively created definition of accrual that evidence was sufficient to alert the plaintiff to the possibility of injury as a matter of law).
Hennekens contends it was reasonable for him to infer the transaction was void and ignore Attorney Doyle‘s October 13, 1981, letter threatening foreclosure on the note and the mortgage. We disagree.16 In Spitler,
means such diligence as the great majority of persons would use in the same or similar circumstances. See Hilker v. Western Automobile Ins. Co., 204 Wis. 1, 15, 231 N.W. 257, 235 N.W. 413 (1931) (opinion on reconsideration). Plaintiffs may not close their eyes to means of information reasonably accessible to them and must in good faith apply their attention to those particulars which may be inferred to be within their reach. See Kanack v. Kremski, 96 Wis. 2d 426, 432, 291 N.W.2d 864 (1980).
Neither this court nor the court of appeals has applied our explication of the meaning of reasonable diligence in Spitler. However, at least one other jurisdiction which follows our formulation of the discovery rule has held that a claim accrued in a situation similar to that which the record shows existed in the case at bar on
October 13, 1981. See Knauber v. Smith and Schnacke, 42 Ohio App. 3d 1, 536 N.E.2d 403 (1987).In Knauber, one Thaler invested in real estate with one Knauber. Thaler and Knauber held the real estate as tenants in common. Thaler directed her attorney, the defendant, to draw a codicil to her will to leave her interest in the real estate to Knauber. Subsequently, Thaler and Knauber formed a partnership to further their real estate enterprise. At Knauber‘s request, the attorney who drafted the partnership agreement had not previously represented either Knauber or Thaler. After Thaler‘s death, her executrix demanded the dissolution of the partnership as Thaler‘s successor. When the partnership was dissolved, Knauber did not receive the real estate he seemingly was entitled to under the codicil because it did not take into account the partnership agreement. Id., 42 Ohio App. 3d at 1-3, 536 N.E.2d at 404-06.
Subsequent to litigation over the dissolution of the partnership, Knauber commenced a malpractice action against Thaler‘s attorney as a third-party beneficiary of her will on the theory that the attorney should have drafted the codicil to take into account the partnership agreement. The defendant moved to dismiss on the grounds that the action was barred by the statute of limitations. Id., 42 Ohio App. 3d at 4-5, 536 N.E.2d at 406-07.
The court agreed the action was time-barred. In reaching that conclusion, the court held that Knauber‘s claim accrued17 the day he received a letter from Thaler‘s
In the case at bar, on October 13, 1981, Hennekens stood in the same position as the plaintiff in Knauber on the day his claim accrued. On October 13, 1981, Hennekens, like the plaintiff in Knauber, received notice that someоne was asserting a claim against him.
Hennekens should have contacted an attorney in response to Attorney Doyle‘s October 13, 1981, letter threatening foreclosure on the mortgage and note. It was unreasonable for Hennekens to infer that the transaction was null and void when the seller was threatening foreclosure of both the mortgage and the promissory note despite the fact that Hennekens had not received clear title to the land.
Hennekens contends that contacting an attorney upon receipt of Attorney Doyle‘s letter would not have accomplished anything because his liability on the note was not certain as of October 13, 1981. The Steinmetz dissent makes a similar argument when it contends, at 175, that in 1981 Hennekens faced merely the possibility of future harm in the form of action on the note by the seller, Crotteau. We disagree.18
On August 16, 1981, it was probable that Crotteau would bring an action on the note against Hennekens because, as the record shows, Crotteau needed the money Hennekens owed him on the note to satisfy liens against the property. The record shows that Hennekens knew that Crotteau needed the money to satisfy liens against the property, and Hennekens was reminded of that need in Attorney Doyle‘s letter of October 13, 1981. Furthermore, in the same letter, Doyle threatened Hennekens with an action on the note and the mortgage. Therefore, in 1981, it was probable that Crotteau would bring an action on the note against Hennekens, and, as previously discussed, Hennekens had sufficient notice of his injury under Knauber.
Moreover, as counsel for the defendants pointed out at oral argument, an action for declaratory judgment could have been filed by any attorney contacted by Hennekens to determine Hennekens’ rights and obligations under the promissory note.19 Hennekens could have made the defendants parties to the declaratory judgment action under
Instead of contacting an attorney to determine why Crotteau was pressing for payment for land Hennekens had not received, Hennekens simply ignored the October 13, 1981, demand letter. He did not exercise “such diligence as the great majority of persons would use in the same or similar circumstances.” Spitler, 148 Wis. 2d at 638. Instead, Hennekens closed his “eyes to means of information reasonably accessible” to him, id., namely, the information an attorney could have provided him regarding his liability on the promissory note and the October 13, 1981, demand letter. Hennekens did not “in good faith apply [his] attention to those particulars which may be inferred to be within [his] reach.” Id. Hennekens should have inferred that the deal was not null and void, at least in the eyes of the seller, and that he should contact an attorney to determine the status of the transaction.
We hold that as a matter of law, Attorney Doyle‘s October 13, 1981, letter constituted sufficient notice to
By the Court.—The judgment of the circuit court is affirmed.
SHIRLEY S. ABRAHAMSON, J. (dissenting). I agree with the holding of the majority opinion that the discovery rule is applicable for determining the accrual of the cause of action of attorney malpractice. I part company with the majority opinion in its determination as a matter of law that the plaintiff discovered or with reasonable diligence should have discovered his injury upon receipt of the October 13, 1981 letter. I do not believe that the plaintiff‘s discovery of his injury can be decided as a matter of law on summary judgment under the facts of this case.
Discovery Rule. Application of statutes of limitation to lеgal malpractice actions presents difficult
The trend in the cases is away from the harsh occurrence or damage rule, in which the statute of limitations starts to run on the date of the negligent act or of the injury, regardless of the client‘s knowledge of the act or injury, toward the discovery rule. Under the discovery rule, the statute of limitations starts to run when the plaintiff has actual or imputed knowledge of the facts constituting a cause of action for malpractice, that is, “when the plaintiff has actual or imputed knowledge of the attorney‘s act or omission, the wrongful nature, and the fact of injury . . . .” 2 R.E. Mallen & J.M. Smith, Legal Malpractice sec. 18.15, p. 137 (3d ed. 1989).
I agree with the majority that “a сlaim for relief does not accrue until the potential plaintiff knows of or, in the exercise of reasonable diligence, should have discovered his injury, its nature, its cause, and the identity of the allegedly responsible defendant.’ ” Majority op. at 160 (citations omitted).
This court applied the “damage rule” in Boehm v. Wheeler, 65 Wis. 2d 668, 676-677, 223 N.W.2d 536 (1974), refusing to adopt the discovery rule or a theory of “continuous representation.”1 Determining the date of
The other dissenting opinion contends that in this case actual damage did not occur until the plaintiff was forced to pay attorney‘s fees to defend the action on the promissory note. Though some decisions support this interpretation of when damage occurs, I believe that such problems can best be handled under the discovery rule. I agree with thе authors of a treatise on legal malpractice who, when discussing a case involving a real estate transaction, conclude, “Although the defect in title can be rationalized upon the contingency that there is no actual damage until a challenge is made, the better rationale is the lack of discovery. A client aware of the defect would undoubtedly have a viable legal malpractice action notwithstanding the absence of an adverse claimant.” 2 R.E. Mallen and J.M. Smith, Legal Malpractice, sec. 18.11, p. 107, n.27.
After Boehm, this court applied the discovery rule in certain tort claims. Under the discovery rule, the tort claim accrues on the date “the injury is discovered or with reasonable diligence should be discovered, whichever occurs first.” Hansen v. A.H. Robins, Inc., 113 Wis. 2d 550, 560, 335 N.W.2d 578 (1983).
For a discussion of the continuous representation rule, see 2 R.E. Mallen & J.M. Smith, Legal Malpractice sec. 18.12.
Summary Judgment. The majority opinion concludes that the plaintiff in this case discovered his injury, as a matter of law, when he recеived a letter from an attorney approximately two months after the real estate transaction was to have been completed.2 I conclude that the question of whether the plaintiff knew or should have known of the injury on receipt of the letter
Summary judgment is appropriate when only an issue of law is involved. Summary judgment is not appropriate when an issue for a fact-finder exists. We set forth the general rules for summary judgment in Grams v. Boss, 97 Wis. 2d 332, 338-339, 294 N.W.2d 473 (1981). Summary judgment is appropriate when there is no disputed issue of material fact. If material facts are disputed, if there are undisputed facts from which reasonable alternative inferences may be drawn, or if the material presented on the motion is subject to conflicting interpretations or reasonable people might differ as to its significance, summary judgment is improper.
The discovery rule sets forth a “reasonable person” standard (an objective standard). Applying the legal standard to the facts, even undisputed facts, for purposes of the discovery rule is ordinarily an issue of fact for the fact-finder.3 Whether the plaintiff knew or a reasonable person should have known of the injury may be decided as a matter of law when a court can say that there is only one reasonable conclusion to be drawn from the undisputed facts.4
The question, then, in this case is whether reasonable persons could draw competing reasonable inferences or conclusions regarding the date of plaintiff‘s discovery.
I conclude that reasonable people can reach different conclusions from this record about when the plaintiff knew or should have known of his injury. The fact-finder could conclude from the evidence relating to the original transaction that the plaintiff believed the transaction was void and that he had no liability because he could not get financing.5 The fact-finder could conclude that the October 13, 1981, letter was unclear and would not necessarily have disabused the plaintiff of the idea that he had no liability. The fact-finder might think that attorneys, and others, sometimes threaten legal action
For these reasons, I would deny summary judgment in this case and remand the cause.
STEINMETZ, J. (dissenting). I disagree with the majority‘s analysis and conclusion and therefore dissent. Specifically, my dissent is basеd on the majority‘s determination that the plaintiff sustained actual damage in 1981 as a result of legal malpractice by the defendant. Because I consider that the plaintiff did not sustain actual damage until 1985, from which it follows that the plaintiff could not have discovered any actual damage until that time, I would reverse the decision of the circuit court holding that the plaintiff‘s action is time barred.1
This rule can be known as the “damage rule,” and is referred to as such by the other dissent. In Hansen v. A.H. Robins, Inc., 113 Wis. 2d 550, 560, 335 N.W.2d 578 (1983), we adopted the “discovery rule,” which says that the statute of limitations begins to run at the time the plaintiff discovers, or through the use of reasonable diligence should discover, that he has been damaged. Although Hansen was not a legal malpractice action, we “adopt[ed] the discovery rule for all tort actions other than those alreаdy governed by a legislatively created discovery rule.” Id. Accordingly, the rule is applicable to legal malpractice cases.
Clearly, the “discovery rule” is merely a hybrid version of the “damage rule” and completely consistent with it in theory and application. Under either rule, damages must exist before the statute of limitations begins to run. This was recognized by the California Supreme Court in Budd v. Nixen, 6 Cal. 3d 195, 98 Cal. Rptr. 849, 491 P.2d 433 (1971), which held that, although the statute of limitations in legal malpractice actions begins to run from the time of discovery, a cause of action for legal malpractice does not accrue until the plaintiff suffers damage. Thus, the arguments of the majority and other dissent are mistaken insofar as they would suggest that the application of the “discovery rule” means that damage does not need to exist before the statute of limitations begins to run. Absent a statutory provision to the contrary, the point at which any damage arose is always the fundamental question. There must be damage before the discovery rule can come into effect.
The majority argues that the plaintiff suffered damage by virtue of “not being able to rescind the transaction and avoid liability on the note when he could not receive the property he purchased with the note.” Majority op. at 156-157. The majority fails to acknowledge that the plaintiff‘s “liability on the note” was potentially only a paper tiger. The “liability” was based upon the mere possibility that the land seller would bring an action against the plaintiff. Until 1985, when the land seller brought such an action, only that mere possibility existed, and that mere possibility itself would eventually have been extinguished by the statute of limitations governing the injury claimed by the land seller.2
Moreover, as a practical matter, the majority is simply mistaken when it asserts that the plaintiff “could not receive the property.” In fact, the plaintiff did receive the very same property, having purchased it from the finance company in 1982 after the finance company foreclosed on it against the original land seller. Not only did he purchase the property, he did so on terms much more favorable than he would have gained had he purchased the property from the original land seller, purchasing it at the rate of interest of only five percent. Given that the judgment obtained against the plaintiff by the original land seller was reduced by the amount the plaintiff paid the finance company for the land, it is conceivable that the plaintiff might not have suffered any damage at all, although thе defendants on appeal have not challenged the plaintiff‘s claim of actual damage. In other words, the purchase of the property by the plaintiff means, as a practical matter, that the only possible damage that the plaintiff suffered arose in 1985 pursuant to his legal defense.
The majority relies heavily, and erroneously, upon Denzer, 48 Wis. 2d 528, and Boehm v. Wheeler, 65 Wis. 2d 668, 223 N.W.2d 536 (1974). Both of these cases are quite distinguishable from the instant case, primarily because of the distinct nature of the malpractice that occurred in them.
Thus, in Denzer, the plaintiff‘s injury did not depend upon the mere possibility that a legal action would be brought against him. The concomitant effect of the attorney‘s action was to cause actual damage to the plaintiffs immediately upon the transaction being consummated insofar as they did not receive that for which they had bargained and paid. The plaintiff‘s legal right to receive the property for which he had paid had been violated. Damage was an accomplished fact by virtue of the consummation of the real estate transaction. The plaintiff thus had a claim for relief when the real estate transaction occurred.
Unlike the situation in Denzer, of course, no real estate transaction was ever “consummated” in the case at bar, where the plaintiff never “paid for and received” the real estate as did the plaintiff in Denzer. Never having paid for the property, he never “lost” anything of value to himself. His “damage” in the instant case remained speculativе, a “mere possibility.” It depended
As for the majority‘s reliance upon Boehm, the “right” at stake with regard to the first claim in Boehm, the claim for failure to file a patent application in a timely fashion, was clearly a legal right, specifically, a patent right. Boehm, 65 Wis. 2d at 678. “Patents do have the attributes of personal property and are assignable.
As to the majority‘s reliance upon the second claim in Boehm—for incorrect advice as to a third party‘s inspection of plaintiffs’ invention—there appears to
We conclude that the injury to the plaintiffs’ interests would have occurred when they sent models of the power unit to their competitors, if not before. It was then that they were injured by the defendants’ allegedly erroneous advice, if at all.
Id. at 679 (emphasis added). Thus, we strongly suggested that there was no injury at all with regard to the second claim. Insofar as no injury ever occurred with regard to this second claim, no corresponding cause of action ever accrued. Thus, quite correctly, we effeсtively ruled that the plaintiff had no cause of action with regard to the second claim. I submit that, consistent with the situation as to the dubious second claim in Boehm, there was no “right“—and therefore no injury at all in the case at bar until 1985.
Although the issue presented in this case is a bit unique, there are cases which, analogously, support my position.4 For example, in In re Easterbrook, 200 Cal. App. 3d 1541, 244 Cal. Rptr. 652 (1988), the California Court of Appeals ruled that a complaint filed by a crimi-
In the final analysis, it is clear that the majority has not put forth any reason to justify its decision aside from expressing a dislike for the possibility that legal malpractice actions might take place more than six years after the negligence itself occurs. Because the plaintiff did not suffer any actual damages until 1985, the statute of limitations did not begin to run until that time. It follows that his cause of action is not time barred. Accordingly, I dissent to the majority opinion holding to the contrary. I would reverse the judgment of the trial court and hold as a matter of law that the plaintiff‘s action is not barred by the statute of limitations.
Notes
October 13, 1981
Mr. Loren Hennekens
Star Route
Sarona, WI 54870
RE: Mortgage and Note to Gene Crotteau
Dear Mr. Hennekens:
As you are well aware, I represent Mr. Crotteau in this transaction. In exchange for a deed to the landfill property, you gave Mr. Crotteau a note for $225,000 payable on or before August 16, 1981. That note is secured by a mortgage on the real estate which he deeded you.
This payment is now almost two months past due, and you have done nothing to satisfy this obligation. As you well know, Mr. Crotteau‘s situation with regard to this particular real estate is really delicate. Unless you can pay this obligation in full within the next ten days or two weeks, it is very doubtful that this real estate will be available for your use at all.
In order to protect his own position in this matter, I must recommend that Mr. Crotteau commence a foreclosure action against you on the note and mortgage which you signed. This we will proceed to do if we have not received payment from you by October 27.
Very truly yours,
Timothy M. Doyle
TMD:phs
cc: Gene Crotteau
Mike Luckterhand
Donald Hoerl
For a discussion of summary judgment and discovery rule, see 2 R.E. Mallen & J.M. Smith, Legal Malpractice, pp. 138, 692.
The majority cites cases listed by the plaintiff at majority op. at 158 n.11.