*1
Mark V. Plaintiff Appellee,
v. MANUFACTURING, INC.,
NORKOT Industries, Inc.,
Western and James individually, Defendants,
Page, Third-
Party Appellants, Plaintiffs and
McGee, Hankla, Wheeler, Backes &
P.C., Third-Party Defendant Appellee.
No. 20020058.
Supreme Court of North Dakota.
Nov. 2002.
Rehearing Denied Dec. Kirmis, Smith,
Lyle Zuger W. Kirmis & N.D., Bismarck, for plaintiff appellee. P.C., Norris, Norris, L. L. James James Houston, TX, defendants, plaintiffs appellants. *2 Firm, Page as a third- Storslee, complaint, Rexworks sued Law Storslee A.
Steven defendant, N.D., seeking indemnification Bismarck, third-party party de- P.C., for any damages for which contribution for appellee. fendant might Rapid be found liable to Rexworks WALLE, Chief Justice. VANDE City. complaint That was served 8, Feb- Page’s agent on 1996. On Inc., Manufacturing, Norkot 1996, 21, attorneys filed an ruary Inc., Industries, Page and James Western answer, counterclaim, seek- and crossclaim a district (collectively, “Page”) appealed in indemnity or contribution the South ing granting a and order court memorandum ¶ Larson, 2001 ND Dakota suit. summary for motion renewed A company 386. Texas 627 N.W.2d legal malpractice claims dismissing Page’s Maxigrinder purchased from Rexworks law firm Mark Larson and the V. Rex- by Rexworks sued Wheeler, manufactured Hankla, McGee, & Backes (“McGee”).1 in Texas for caused works P.C., conclude there are We fire. Rexworks Maxigrinder caught precluding material fact issues of genuine third-party complaint judgment, Page and we reverse served summary proceedings. for further 1996. April remand 26, 1996, Page and Rex- June [¶ 5] On I pay Rexworks would re- agreed works from a appeal This is the second full for Page payment amount to duced dismissing Page’s legal summary judgment agree- all due under the- amounts Larson and claims ments; indemnify Rexworks Page would by ground they on the were barred McGee manufac- products out of arising for claims of limitations. See Larson by Rexworks by tured Norkot and sold ¶ Inc., 103, 2, 627 Mfg., 2001 ND Norkot machine involved including the (specifically 386. N.W.2d and Rex- litigation); in the Dakota South of the McGee a member [¶ 3] While indemnify Page for losses works would firm, ne- represented law Larson by manufactured arising out of machines involving sale gotiating a business asset including the ma- (specifically Rexworks right to manufacture grinders and the litigation). in the Texas chine involved Inc., Rexworks, and drafted grinders to Larson and became involved and other asset litigation 1998: signed were on Febru- agreements, which ary provision No indemnification Larson sued liability from for protecting legal fees. On unpaid to recover by Maxigrinders manufactured answered and agree- in the sale Rexworks was included counterclaimed ments. in the sale contracts failing to include “any provision with Rexworks Maxigrinder A manufactured Norkot protеct contract from Rexworks purchased who Dakota, liability parties from City, City Rapid financially, as a injured, physically or caught destroyed. Rapid fire and any of the of the use of consequence City In a sued Rexworks. Inc., subsequently appeal entered Mfg., as an from 1. As in Larson v. judgment.” treat this consistent "[w]e 1 n. from Norkot to Rex- assets transferred claims are barred the statute of limi- tations. works.” Judgment accordingly was entered ¶ Page alleged at 4. he entered into an
Id.
appeal
this
followed.
*3
indemnity agreement with Rexworks on
$379,316 plus
June
and “lost
oth-
II
damages
er
Larson’s and
the earlier appeal, we re
legal malpractice.” Page
McGee’s
assert-
summary
iterated when
judgment may be
ed the same
malpractice
rendered:
in third-party complaint.
McGee
56,
Under
summary
N-D.R.Civ.P.
trial court granted
[¶ 7] The
motions
judgment shall be
if
rendered
there is
Larson
McGee for dismissal of
genuine
any
no
issue as to
material fact
Page’s legal malpractice claims on the
party
judgment
entitled to
as
ground they
were barred
a matter of law. Summary judgment
Page appealed.
limitations.
conclud-
We
dispose
be issued to
of a controver-
genuine
ed there was “a
issue materiаl
sy
if
party
without trial
either
is entitled
precluding summary
fact
judgment on the
law,
aas matter of
if there
knew,
question of
when
or with rea-
is no dispute as to either the material
known,
sonable diligence should have
facts or the inferences to be drawn from
cause,
injury,
its
and the defendants’
facts,
undisputed
or if resolving factual
¶
possible negligence.” Id. at 13. We af-
disputes
would
alter the result.
firmed the dismissal of Larson’s claim
Inc.,
103,
v.
Mfg.,
Larson Norkot
2001 ND
against Page, reversed
the remainder
¶ 7,
This Court finds that
the statute of
tionship,
duty by
client,
limitations
run
commenced to
when
a breаch of that duty by the
attorney,
received the South Dakota third
to the client
party complaint
proximately caused
the breach of
Constr.,
complaint
placed
duty.
should have
a rea-
Dan Nelson
Inc. v.
Dickson,
person
sonable
on notice of a
Nodland &
legal
claim of
malpractice. The issue of
MARING, Justice, concurring specially. City against alleging Rexworks and Rex- appеal requires indemnity This our Court works was from Nor- entitled to any damages by Rapid to decide when the statute of limitations kot for sustained City to run in a action. begins maxigrinder. because of Norkot specially I I am concur because of the its counterclaim Rexworks dated 20, 1996, opinion legally damages February it cognizable claimed was entitled indemnity must have occurred before the statute of “to contribution from and/or Carlson, begins merely limitations run Plaintiff to and not Rexworks and/or damages. City City’s any, I am of if opinion Rapid damages, nominal also were negli- solely by must be caused Rexworks Carl- and/or gence attorney, allegedly, Da- here son.” This case was venued South (“the case”). attorney’s failure to include an indemnifi- kota Dakota any Dirt of the use of of the assets quence Texas Works Subsequently, case”) (“the Rexworks in Texas transferred from Norkot to Rexworks.” sued Texas claimed resulted from also served a it 9, 1998, on complaint February manufactured Rexworks. McGee maxigrinder third-party petition malpractice. alleging the same Rexworks served 20, 1996. Norkot served April Norkot on defendant, McGee, Third-party third-party peti- Rexworks’ an answer tо summary judgment brought a motion for May gener- which was dated tion July based on the statute dated allegations. ally denying all support In its brief in of limitations. 26, 1996, Norkot and June On summary judgment, McGee the motion agree- prepayment into a entered two-year that the statute position took the agree- Under the with Rexworks. ment began to run when of limitations pay Page ment, agreed to Rexworks read, signed, copies received $860,000 for all amounts payment full sales contracts between Rexworks agreement and under the due February In the Page/Norkot addition, consulting agreement. alternative, if position McGee took jointly agreed and Norkot of limitations did not start and hold harmless severally indemnify run in began run in it manu- relating product Rexworks January 1996, when Norkot was sued and sold Rexworks. by Norkot factured Dakota case. Rexworks the South applied specifically to This indemnification upon receiving Rex- McGee contended Dakota action. of the South the defense third-party complaint works’ the South indemnify and hold agreed to Rexworks *6 case, Page’s in person Dakota a reasonable any Page against and harmless Norkot placed inquiry would have position been manufac- maxigrinders relating regard purchase in to whether or not the subsequent to the date tured Rexworks agreement prepared required in 1993 Rex- agreement. closing purchase of the It indemnify Page works to and Norkot. Dirt applied to the Texas specifically This contended the actual outcome South that this Page alleged Works lawsuit. and the litigation Dakota was relevant foregoing in his agreement resulted litigation Dakota importance the South $379,318 origi- he owed under the that was placed Page that it on notice of indem- was consulting and purchase agreement nal nification issues between Rexworks and agreement. that differen- Page. McGee claimed 5, 1998, a verdict was June 23] On [¶ litigation tiation between the Dakota South of Norkot and Rexworks rendered in favor of limi- litigation and the Texas for statute Dakota case. in the South purposes tations was “inscrutable.” McGee, however, Page Lar- ulti- Mark noted On mately obligation had the Page for ser- concluded he son Norkot sued for the South Dako- Page responsibility to Norkot and while assume provided vices litigation ta under the terms of the 1993 employee of McGee. On Larson was Page and that served Norkot claiming obligation that he no such for alleg- and counterclaim by mail an answer therefore, and, litigation had to any provision include the Texas ing Larson “failed to prepayment agreement the 1996 negotiate in protect the contract to in freed from may be in- with Rexworks order be liability parties from who litigation. in the Texas financially, exposure a conse- further jured, physically or 20,1997, agreed-upon in also on a November terms the Asset Pur- McGee relied claiming that it Agreement, letter written to Larson chase Norkot and now an intention to sue Larson for acknowledge indicated this lawsuit would regard to the South Dakota responsibility have been their even with- from lawsuit. The letter states: Prepayment Agreement. out the Prepayment Agreement provid- further we intended to handle a matter While party ed that the third brought defending Dakota that we are responsibility an action Texas would be the against and then commence Rexworks, you we cer- and that Rexworks would in- [Larson] McGee tainly demnify can be enticed to file our action Norkot and future than that. that might brоught against sooner lawsuits them, if any, on account of the units 20,1997, however, By November Texas manufactured Rexworks on account Dirt case had also been commenced Works of units manufactured after February brought and Rexworks had Norkot and In addi- petition. tion, prepayment agreement, [¶ It is clear that at the time 28] settled the indemnification issues between counterclaim and third-party complaint Rexworks, signed had been on were alleging legal malpractice served 26,1996. June the alleged malpractice was a failure to response Larson his to the pro- include an indemnification clause to summary judgment July motion for dated liability tect Norkot and from 28, 2000,joined arguments. McGee’s maxigrinders manufactured Rexworks. aAs result of the failure to include this July parties On all sub- clause, indemnification Norkot and Page joint pretrial mitted a statement purchased indemnification for claims aris- a stipulation court which included of facts. ing maxigrinders out of manufactured stipulated undisputed Those included: facts by foregoing Rexworks sum of Norkot, Page, 7. Prior to James $379,318 in the prepayment settlement entering into Prepayment Rexworks 26,1996. agreement of Junе *7 Agreement, third-partied Rexworks had I, appeal Norkot into two lawsuits. One related in Larson [¶ 29] On Norkot maxigrinder destroyed to a unit that Page argued appeal was their brief on in a fire in that “it South Dakota. Norkot was was the Texas Dirt Works case time, where, brought third-party very any into this lawsuit as a that for first in January liability maxigrinders by with Rexworks claim- for manufactured itself,” ing indemnification As- pursuant to the Rexworks manifested and “this Agreement. set Purchase The second Texas case involved for the first time an a brought against concerning maxigrinder lawsuit was lawsuit issue a manufac Works, by by Rexworks Texas Dirt Inc. in tured Rexworks which Rexworks partied Norkot third into Page Texas. was contended that Norkot and were lia in April damages by maxigrinder this lawsuit Rex- ble for caused claiming works indemnification for a manufactured Rexworks after the Feb faulty design. Prepayment Agree- ruary Page The Norkot and have 1993.” it provided Page continually ment would asserted was the failure to responsible pro for the South Dakota law- include an indemnification clause to suit, provided alleged maximum tect re- is the $250,000. sponsibility legal malpractice against Under Larson 40 during time the has appeal, first tolled its brief In
McGee. “Page injury. did argued also not sustained actual Norkot. damages caused Lar discover
not (1997). § Attorney 7 at Law 243 Am.Jur.2d April until after 1996 son’s receipt adopted following return This signed Court by Rexworks in petition regarding rule the time at which a cause of case.” also purposes Works for the of section the Texas'Dirt action accrues actually first time 28-01-18(3), “The asserted: N.D.C.C.: $379,318 (ap his. discovered period the best rule is that the limitation omitted) that.were caused pendix citation against malpractice commences to run was when negligence Larson’s malprac- act of action from the time the agreement with settlement signed is, by rea- resulting injury tice with 26, 1996 relative to the June Rexworks on be, sonable could discovered. (appendix citation case Texas Dirt Works omitted).” posi Norkot took the Page and Haugland, 303 N.W.2d Johnson (N.D.1981) of limitations could tion that Iverson v. Lancas (quoting (N.D.1968)). until and Norkot running ter, start 158 N.W.2d damages. had sustained “The of a elements are the professional negligence for exis determining when the statute relationship, an attorney-client tence of begins to run on of limitations client, duty by a breach attorney claim, appliеd dif- courts duty by attorney, of that ferent rules: proximately to the client rule that statute of general duty.” breach of that Larson v. Norkot run a cause begins to limitations ¶ Inc., Mfg., 2001 ND right prose- only after of action Constr., Dan Inc. v. (citing Nelson to a successful cute cause of action such Dickson, Nodland & to an ac- applies has accrued conclusion 267). has addressed N.W.2d Our Court attorney malprac- tion in a the issue of when the occurred tice .... cases. legal malpractice action several that a cause of action cases hold Some ac- against an involved a Binstock v. Tschider the client sus- the time has crues from malpractice action based on the damages.... tained option pur- inclusion of an erroneous cases, limita- the statute of some in land documents. chase sale transaction begin to run until the tions does not Court determined the earliest Our *8 should know of plaintiff knows or it date which could be said that the Bin- plaintiff and the attorney’s negligence injured option were was when the stocks harm. appreciable suffers actual and created, “thereby giving Kilzer the § 241 Attorneys 7 at Law Am.Jur.2d property. oр- The right (1997). that reduced the tion was an encumbrance right limited the of property, the statute of value of the
Under the view prevented Binstock or disposition, action limitations on im- Terry making from further plaintiff run until the Binstock begin does not of attorney’s provements property because knows know of the or should in- would loose their they actu- their fear that negligence and the suffers harm, in improvements.” vestments 374 N.W.2d appreciable al the statute is
41 (N.D.1985). reaching prepare agreements this deci- táined to trust 85 shel- sion, stated: tering personal liability our Court them from tax partnership income. The as- doctors determining when an action for that as a of attorney’s serted result is barred pas negligent of time, preparation agree- the trust recently we said in v.
sage of
Wall
(N.D.1985):
Lewis,
they
personal
liability
ments
incurred
tax
473
partnership
on their medical
income. The
two-year statute of limitations
The
trial court struck the attorney’s statute of
28-01-18(3), NDCC, is
under Section
defense, concluding
limitations
as a matter
applicable
brought
to an action
law,
of
the doctors had commenced a time-
professional
ly
action because there was no
Hаugland,
v.
malpractice.
Johnson
consequently
curred and
(N.D.1981).
no actionable
533
The stat-
N.W.2d
claim until the
when,
federal district court issued
run
“plaintiff
ute commences to
summary judgment
its
knows,
favor of the IRS
reasonable
(1)
(2)
know,
on December
1981. Our Court stated:
(3)
possible
defendant’s
... until the client
apprecia-
suffers an
negligence.” Phillips Fur and Wool
consequence
ble harm as a
of his attor-
Bailey, 340
Co. v.
N.W.2d
ney’s negligence, the client cannot estab-
(N.D.1983).
malpractice.
lish a cause of action for
Prosser
the proposition succinctly,
states
A
legal malprac-
cause
action
“It follows that the statute of limitations
accrue,
tice does
begin
does not
to run
negli-
limitations does not commence to
gence
until
damage
action
some
has oc-
run, until
incurred
the client has
(4th
(Prosser,
curred.”
Law
Torts
(Citations omitted.)
damage.
some
144.)
ed.1971), §
p.
30 at
proposition
succinctly
stated
in Budd
Supreme
California
Court
Nixen,
Indeed,
Cal.Rptr.
having
6 Cal.3d
once
his at-
discovered
(1971):
849,
Id. at 84
thereby creating
tax assessment
an en
Lewis,
obligation against
Wall v.
although
was
argued
entry
menced. The
that
by September
at
Jacobsens
least
deficiency
its tax
judgment
injury
the IRS issued
an
thе date
adverse
sufficient
notices,
was more than two
and which
or not
for &
action whether
time that
the doctors
to the
years prior
anything
paid
judgment.
had been
on the
against
actions
filed their
agreed stating:
Our Court
of limitations did not
attorney, “the statute
We, however, agree
judgment
with the
until, in
to sus
to run
addition
commence
holding
rule announced
decisions
injury,
the Doctors
taining actionable
against
judgment
one
whom a
has been
knew,
diligence should
or with reasonable
relief,
entered should
able
sue
of its
judgment
paid,
if
not been
even
has
474,
negligence.” Id.
possible
of Lewis’
(citations omitted) ... Such cases are
849,
re-,
At the trial of the
conjunction
damage
wrong-
is the
that,
trial court- concluded
as a matter of
ful
of action for
act
creates
cause
law,
legally
no
sufficient basis
there was
tort or contract.
for a
award because the Jacobsens
(quoting
Id. at
Keller v. Clark
884-85
nothing
judgment against
on the
paid
(D.N.D.1979),
Co.,
Equip.
F.Supp.
the Jacobsens were
them and because
(8th Cir.1983),
negli-
'd,
43
(1984)).
concluded,
run only
176
We
to
when the client suffers actu-
79 L.Ed.2d
discovers,
discovery
damage
rule to the circum
al
applying
through
of action
presented,
that the cause
use of
stances
reasonable
should dis-
cover,
was entered
accrued when the
the facts
malprac-
essential
them on
when
tice claim.
of
the Jacobsens knew
their
Bronkesh,
Grunwald v.
131 N.J.
621
Haugen’s possiblé negligence.
(1993)
A.2d
494
(citing several other
Id. at 885.
states that have
approach).
followed this
Lewis,
In Wall v.
[¶
requiring
38] The
for
actu
rationale
(N.D.1986),
that in
758
we noted
the first
al
before the
statute
limitations
I,
appeal,
presentеd
Wall we were
with the
legal
for
malpractice
persua
commences is
of when the doctors had
question
incurred
analysis
sive. The
first asks:
does a
When
damage and we concluded it was the date
cause of action for
accrue? To
deficiency
the IRS issued its tax
notices.
typical
establish a
of action in a
cause
tort
a
We then remanded for
determination
case,
plaintiff
prove
must
tortious con
began
of limitations
statute
duct, injury and
A
proxdmate
pri
cause.
I,
discovery
run under the
rule. Wall
ma facie
of legal malpractice
case
consists
we noted that “the focus is
whether
attorney-client
existence of an
rela
plaintiff
apprised
has been
of facts
tionship,
duty
owed
place
person
which would
reasonable
client,
duty,
the'
breach of that
and dam
that a
notice
exists”
ages
proximately
to the client
that “the
becomes one of law if the
issue
duty.
breach of that
Lar
evidence is such that reasonable minds
Inc.,
Mfg.,
son v. Norkot
II,
could draw but one conclusion.” Wall
Legally-cognizable damages response occur when was filed behalf of the plaintiff detrimentally doctor on relies arbi- (Cita- negligent attorney. tration an award was rendered proceeding, advice of omitted.) concluding tion was not entitled to Actual are the doctor case, regard present tail In the to his the element rescind his decision obli that the insurer had no covеrage damage resulting from the alleged indemnify the doctor gation to defend malpractice, failure to include an indemni- Judgment action. the medical provision protecting fication confirming arbitration was entered arising from claims out Rexworks *13 7, January 1988. It should award on manufacturing maxigrinders of after the of Civil noted that the California Code date, purchase agreement close remained that the rule discovery provides Procedure until the speculative third-par- and remote the statute of limitations applies, but that ty petition Dirt in the Texas Works case time that the during the tolled 20, by Page April was received on 1996. injury. actual Cal.Code has not sustained time, that At Norkot and point (2001); Sirott, § 340.6 8 Cal. Civ. Proc. of knew have known the failure n. 2. The Court of Rptr.2d Appeal at 209 of of an Larson to include indemnification the concluded doctor suffered California provision purchase agreement in the cov- damage attorney’s he incurred fees when ering allegations the made Rexworks medical ac defending the third-party Norkot and the 20, 1987, January than when tion not later to petition. injury The actual attorney response his on his behalf. filed hоwever, May 10, Page, occurred on Id. at The court stated: client “[a] the date to Page’s of answer the third- damage compelled, suffers when he is as a party petition. Again, the record does not error, attorney’s result the to incur or of significant reflect if were fees Budd, pay attorney (citing fees.” Id. incurred service of before the the answer. 436). at Cal.Rptr. 491 P.2d The Court and counterclaim third- and Appeal also the of of California concluded party complaint legal malpractice, damage upon entry actual doctor sustained February served confirming of the the arbitration judgment 1998, respectively, would not be barred It that January award 1988. was at the if it statute of limitations commenced judicially it that point that was determined to run on and Page that date. Norkot malprac the was not entitled to tail doctor incur attorney’s to fees and in de- costs coverage tice com insurance he was fending petition. defending pelled expenses pay to incurred Substantial fees were no later action. In addi medical than when the answer to the third-party tion, fact the court determined that petition was filed in thе Texas Un- case. that suffered additional doctor case, I der facts of this am negligence attorney’s from the when he opinion that Norkot and suffered ac- $230,000 mal paid to settle medical they tual damage compelled when were to practice action on did incur attorney’s fees and costs to defend “[a]ny ap the result because change this action. The answer reason harm preciable flowing and actual from the they had do so was the failure to of Larson negligent conduct attorney’s establishes an hold- include indemnification and cause of action the client harmless in the provision agree- The ultimately sue.” Id. at 210. court very ment. The essence of indemnifica- the statute of limitations concluded tion hold-harmless is to legal malpractice commenced fees, attorney’s avoid costs of litigation, run on judg the date the ultimately, liability for a confirming ment was entered the arbitra damages. necessity incurring tion award. The at- s in defending genuine and costs i a torney’s [T]here fees issue of material directly a fact precluding summary judgment Texas lawsuit was result of the and, therefore, question knew, when or with allеged legal reasonable should have legally-recoverable damages. constituted opinion I and the defen incurring am not of the possible negligence. dants’ The focus of always satisfy fees will the actu- inquiry is when “apprised of an- was. damage requirement al facts which place would .a reasonable alyzing when the statute limitations be- person on notice that a gins to run case. Wall, exist[ed].” N.W.2d injury may entry occur of an The ultimate question [1986]. with re judgment, by having
adverse
defend an
to.
gard action,
triggering
running
being compelled
enter a set-
*14
statute of limitations is when did
by
agreement,
incurring any
tlement
enough
“know
to be on notice
a poten
legally cognizable damages.
other
Dam-
tial
however,
legal malpractice.
claim” for
Schan
ages,
cannot be based on pure
¶
ilec,
165, 19,
1999 ND
injury/damages cluding the harm occa- one which the has not limitations is statute of client, not the measure “actual injury.” sustained Cal.Code Civ. sioned Jordache, § compensation in the form of 340.6. In the California harm Proc. injury. sought Supreme development for the Court can be discussed concept injury since the Budd exacer concurring opinion decision. that the suggesting problem bates the Jordache, In the California court must be shown “damages” which necessary that: noted injury. flow from the are those “the concurrence states: appreciable [T]he existence of actual in-
paragraph jury plaintiffs which Norkot or does not on the injury depend only ability quantifiable as a would be their sum result attribute a Page could in de money damages. and costs incurred consequential fees Simi- rejeсted action.” larly, South Dakota Laird the claims that ac- fending the suggests injury the concurrence tual be defined mon- should paragraph sustain etary did not amount and that the limitations that Norkot is, from the absence of the if the period be tolled injury or way, This statement Adams indemnity agreement. *15 some remediable. rec- injury legal injury may existence of a ognized the actual consist confuses Further, diminution, the damages. impairment of of or as well with the amount as Latts, extinction, right v. 6 loss of a reliance on Sirott the total or or concurrence’s (1992) 923, Cal.Rptr.2d remedy. 8 206 Cal.App.4th “When results in interest, remedy, the decision of the loss or against right, measured has to be of in Supreme imposition liability, Court Jordache or in the the there California of Brobeck, Inc., Phleger v. & injury regardless has been Enterprises, actual of Harrison, 739, Cal.Rptr.2d may 18 Cal.4th 76 whether events the future affect (1998), 749, into permanency injury P.2d 1062 which calls 958 of damages is monetary whether the Sirott decision amount eventual- question of action. good ly law in incurred.” ques dealt with the specifically Jordache 750, 749, Cal.Rptr.2d at 76 958 18 Cal.4th having does a former tion: “When (citations omitted)(emphasis client— P.2d at 1070 mal attornеy’s facts of discovered added). practice injury actual so as —sustain The court specifically California an action of require commencement by rejected suggested the notion the con attorneys year?” one within currence that amount of must 749, 747, 76 958 Cal.Rptr.2d at 18 Cal.4th be decided the ultimate resolution of
P.2d at 1068.
imposing liability
the lawsuit
on the in
Jordache,
752,
client.
at
jured
law on the statute
18 Cal.4th
54] California
749,
limitations
action derives
.2d
at 1071.
Cal.Rptr
in a
76
958 P.2d
The
Nixen,
195,
inju
98
court
the actual
interprets
Budd v.
6 Cal.3d
California
from
849,
(1971),
the case
ry requirement
relied (N.D.1985). Following professional 471 366 N.W.2d Budd, enacted legislature negligence, though even the amount of the California yet not governs compensable damages might the commence be However, “Actual injury ment the limitation known. occurs period.
49
injury legally
injury
suffers
loss or
their
“no later than” the date the
client
legal malprac
cognizable as
IRS issued its notice of assessment. The
on the asserted errors or
tice action based
Wall,
474,
Court stated
a footnote
at
Jordache,
omissions.”
18 Cal.4th at
that whether the Doctors sustained actual
P.2d at
Cal.Rptr.2d
76
958
1065. See damages prior
deficiency
assess-
Mix,
91
also Samuels v.
Cal.4th
ment
question
the IRS is a
of fact
(1999).
P.2d 701
Cal.Rptr.2d
merits,
determined at a trial on the
citing
only
are
[¶ 57] We
state
Budd.
expressed
confusion about the use
case,
appreciable
this
harm
“injury”
“damages.”
See Ronald Mal
can
inability
indemnity
include the
to seek
Smith,
Jeffrey
Legal Malpractice
len &
based
failure to
(5th ed.2000).
§§ 22.11-22.12
The author
clude a provision
indemnity
in the con-
prevailing
notes “the
rule is that
there
tract.
“The
right
loss or diminution of a
only
injury
need be the fact of an
rather
remedy
injury
constitutes
or damage.
specific quantity
than a
if
damage, even
uncertainty
Neither
of amount nor difficul-
significant damages
not occur until
ty
proof
injury
speculative
renders
future, if
all.”
Jordache,
or inchoate.”
18 Cal.4th at
agree
I cannot
with the
concur
(citation omitted).
Wall,
(citations omitted).
at 473
Wall,
Wills,
[¶ 62]
The Court
held
Duncklee v.
(N.D.1996),
that the claimants had sufficient notice of N.W.2d
we said:
litigation
in the
Dakota
plaint
mal
South
of limitations
The statute
litigation
run when
discussed
commences
practice actions
knows,
respond
or with reasonable
attorneys
preparing
plaintiff
know,
complaint,
should
to determine
third-party
neg
8, 1996,
possible
January
and the defendant’s
what date between
Lewis,
gard subjective to the claimant’s beliefs.” REXWORKS, MENT I HAD WITH Symington, BASF Corp. AND LIGHTED HIGH SOME PARTS (N.D.1994). “The focus is THAT MAY OR MAY NOT HAVE plaintiff apprised whether the has been SOME RELAVENCE. place per facts which would a reasonable on notice that a potential son claim exists. necessary It is I OF DENY THAT THEIR COURSE subjectively convinced that he has been WAS ANY BY DESIGN FAULT NOR-
injured and that KOT. WHAT WORRIES ME IS *18 Schanilec, negligence.” the defendant’s THAT REX IS GOING TO USE THIS ¶ 165, 13, N.W.2d citing AAS REASON NOT TO PAY ME ON Laboratories, Inc., Wheeler Schmid FEB.2, THE K PAY- ANNUAL 350 (N.D.1990). N.W.2d 133 MENT, THAT EVEN THOUGH OBLI- lawyers If 66] conversations with [¶ GATION IS TO ME PERSONALLY necessary, about were theoret AND NOT NORKOT. ically might the statute of limitations never ME CALL begin Page to run. he no asserts had 19, 1996, speсific malpractice. January conversations about in another [¶ 67] On However, Christensen, January Page attorney Page sent a letter to wrote: Plano, Rexworks discussed, City and the Texas. I don’t believe rex-
As we that Norkot knew these in this contends to include me is entitled works liabilities and problems resulting and the lawsuit, what I at not from believed least to Rex- problems did not disclose these in the contract works. warranty fact rexworks own In them. is the same as in the enclosures
as noted January spe- 69] [¶ suppose question I That is mine was. with his cific written discussions have to determine. judge will some the contract and whether Norkot about I read conversation as Further to our in suits under an indem- could be included rex, they cannot with- my contract with knew nity January claim. juris- competent unless a court making hold that Rexworks was claims for favor, point in their in arising found claims both demnity diction has include in a better feel for will have which we Dakota and in Texas. ... from rexworks weeks
the next two If it was for Larson encourage they could almost standpoint Hankla firm not to have or the McGee law simply in order to file a suit someone to in provision included a the contract for ... I me note paying avoid indemnify Page, Rexworks to personally, due me payments are January of its they were aware absence corp. norkot have filed suit they aware, 1996. Norkot and were 19, 1996, Rexworks aware, exposure On been of their should have Page notifying him as indemnity a letter to of Rexworks and sent to the claims Norkot, following: remedy against President of their lack of a contractual Pur- Rexworks. Article 14 of the Asset Pursuant by and between Nor- Agreement chase Schanilec, we “[t]o As said Co., Inc., Manufacturing Rexworks
kot running of the statute of limita trigger the Page, Rexworks is writ- Inc. and James tions, fully appreciate Schanilec need you of several claims for ing notify potential liability or even be convinced provided As section indemnification. injury; only enough of his he need know Agreement, Purchase the Asset 14.01 of potential be on notice of a claim.” Schani jointly are and James Norkot lec, 19. Like the fact situation indemnify Rex- obligated to severally Schanilec, this case is one where reason indemnification claims. works for such only can able minds draw conclusion Looking
drawn the trial court. at the specific negligencе by Page claims of made Norkot, above, know, quoted and based several customers you As record, to the in this when did design respect defect with evidence alleged a knowledge and Norkot have sufficient safety prevention. and fire You product legal malpractice? re- claim for are now involved machine built Nor- The trial court held garding fire on a knowledge City Rapid had such shipped kot and referring to the letter sent Chris City. other claims of defective Various being tensen on that date and on state and manufacture are also design *19 copy City. alleged ment that “Mr. Christensen had alleged by Rapid These agreement between not confined to this loca- the asset problems are early him has commenced or is Rexworks and since Litigation tion. with at Texas Dirt Works connection another case.”
being threatened undisputed evidence Under remand, Page and Norkot after developed
knew, reasonable or with prepared that the contracts
have indemnity provi- contained no
by Larson By receipt of the protecting them.
sions dated
letter of demand subject they knew were
Norkot and by Rexworks for indemnity demands Dakota and Texas.
claims both South If not to have it was indemnity provision, an action
included brought by
could been Larson and the McGee
Page against asserting legal malprac-
Hankla law firm to them in
tice the information known though even the amount of indemnity liability, any, if would not
have been known. Norkot and
sufficient information of their years they
claim more than two before
commenced Larson and the McGee Hankla law Therefore, 28-01-18, N.D.C.C., §
firm. claim. I would affirm.
bars the SANDSTROM, J., DALE Y.
concurs. ND Dakota, Plaintiff of North
STATE Appellee, AUNE, Defendant
Milton Appellant.
No. 20020106.
Supreme Court of North Dakota.
Nov.