*1 SAPERSTEIN, pro a Utah WATKISS corporation, formerly Watkiss
fessional Campbell, Campbell, and S. Robert Defendants, Plaintiffs,
Jr., Counterclaim Appellees, WILLIAMS, individual, Dean R. an
David individual, Williams, Inter
na Inc., Broadcasting, a Utah
mountain Defendants,
corporation, claim Counter Appellants.
ants,
No. 940294.
Supreme Court of Utah.
Nov. 1996.
Rehearing Denied Feb. *2 counterclaim,
dants’ which is at issue in this appeal, trial the court held as a matter of law Campbell that Watkiss was not liable for complaint the dismissal of defendants’ of Columbia that District since dismissal was upon significant change based a in the law by jurisdic- effectuated a in case decided tion Watkiss & Campbell had filed the after addition, complaint. the trial court held standing the Williamses had no as indi- assert malpractice against viduals to plaintiffs injury they only alleged because the corporation, was to their Intermountain Broadcasting, Inc. We affirm. I. BACKGROUND Schultz, Hanni, Glenn Stuart H. Salt C. City, Stein, Washington, Lake A. and Jacob organized David and Deanna Williams In- DC, plaintiffs. for Inc., Broadcasting, termountain and were its Dam, Watkins, R. Paul Van Glen D. Bruce sole shareholders.1 In Intermountain
Wyeoff, City, Salt Lake for defendants. learned that the Federal Communications (FCC) accepting applica- Commission RUSSON, Justice: a operate tions for license to and construct a City, television station in Lake Salt Utah. and Defendants David Deanna Williams apply Intermountain decided to for li- the (Inter- Broadcasting, and Intermountain Inc. sought Arent, cense and assistance mountain), appeal judgments dismissing (Arent Fox, Kinter, Fox), Plotkin & Kahn a legal malpractice against their counterclaims experi- District Columbia law firm with plaintiffs Saperstein (formerly in appli- ence such matters. Intermountain’s Campbell) Camp- Watkiss & and Robert S. commitment, cation included a or an “inte- bell, (collectively, Campbell). Jr. Watkiss & gration statement” in the vernacular of the represented defen- FCC, by the Wilhamses as owners of Inter- preparing filing malprac- in dants participation mountain devote full-time in complaint against tice their of Co- management the station awarded lawyers lumbia in the United States license. FCC looked Court for the District of Howev- Columbia. commitments, favorably on such the in- er, complaint was dismissed that court clusion of statement in Intermountain’s ground time- on claims were improve its chances of ob- applicable barred statute limita- taining application, the license. The includ- tions. statement, ing integration was filed with Campbell subsequently filed 10,1981. March FCC action Utah Intermountain and Williamses, seeking unpaid attorney fees. In late while FCC’s review of applications Williamses filed a license television was still pending, counterclaim learned that Williamses failing applications to file accepting their FCC was also for a timely respect operate facility With defen- manner. license to a cellular radio Throughout appeal, appeal ruling this assert Williamses sues on renders review this acted, they corpora- on behalf of unnecessary trial inasmuch as the court's dis- tion, Intermountain, but as individuals. The be missal must affirmed whether Williamses court, dismissing the Williamses’ individual individually acted or on behalf of Intermountain. claims, they individually, did ruled that not act Accordingly, we refer to Intermountain and and, thus, only but as shareholders on behalf interchangeably. Williamses disposition Intermountain. is- Our of the other Teleeourier, applicant management, competing cross- City. Inc. Utah Salt Lake (UTI), conflicting him UTI inte- corporation of which the another examined about shareholders, replied gration sole decid- Mr. were the statement. Williams applica- apply. always ed he television intended priority to have over the *3 tion’s commitment pursuing To them in the cellular assist in That application. the other statements license, District of radio UTI retained the attorneys evening, Fox Arent told Mordkof- law firm of Bloosten & Columbia sky. exposed Williamses due to the conflict- Mordkofsky his firm had Harold and ing integration applica- in the UTI statement corporation represented previously another tion, application Intermountain’s television the Williamses were the sole share- which “deep in trouble” unless conflict Communications, holders, Industrial which explained. replied The could be Williamses radio facili- provided common carrier mobile Mordkofsky’s the conflict was due to by ties licensed the FCC. long-standing and that in view their advice Mordkofsky application that UTI’s knew Mordkofsky, Mordkofsky relationship with license would be more for the cellular radio explaining that he his mind and likely too an inte- to succeed if it contained responsible law firm were for inconsis- However, Mordkofsky gration statement. tency. appli- television also knew Intermountain’s commitment cation and the Williamses’ 1984, 5, the administrative On November full therein to devote their attention to the judge hearing law an scheduled additional management proposed of the television sta- misrepre- Mr. determine whether Williams tion intended to di- and Williamses sented himself or lacked candor submit- of the cellular radio business vest themselves ting conflicting integration statements. Ar- granted. if the license was Never- television performed ent Fox had additional work initiative, theless, its on own Bloosten proceedings, it prepare these which Mordkofsky included UTI’s $7,235. a total of The billed Intermountain participate commitment to on a Williamses’ billing sent to Intermountain statements management of the full-time basis clearly designated performed as work facility if proposed cellular radio awarded necessary to overcome the setback caused cellular radio license. exposed application. cellular radio UTI Upon seeing application, the the drafted attorneys Fox of the Arent met with One expressed ap- concern about the Mordkofsky whether could to determine he parent their fulltime com- conflict between during proceedings testify the FCC to coun- appli- radio mitment included in cellular and teract the conflict between television cation their full-time commitment in the and applications. Although the cellular radio fears, allay To application. television Mordkofsky initially indicated he knew Mordkofsky them that different di- informed nothing application, about television he television and visions of FCC review testify that he would in an later indicated if the applications cellular radio and inconsistency. attempt to resolve the license, granted FCC the television UTI the cellular radio license. withdraw However, prior hearing in to the which he Mordkofsky’s response, UTI sub- Assured testify, Mordkofsky submitted a writ- application to the mitted its FCC. ten statement to the FCC that failed to state assurances, firm, initiative, law on its Mordkofsky’s Mr. that his own
Despite conflicting integration statement subsequently compelled to ad- inserted Williams was hearing And at the application. mit the conflict between the into UTI’s to the FCC 1985, Mordkofsky 1984, January 7, again applications. August during on de- hear- judge, to admit that the conflict between the ing administrative law clined before FCC applications and the cellular radio support Mr. testified Inter- television Williams making. Mordkofsky’s his own testi- application. After Mr. was of mountairis television allegations partici- mony all but confirmed the of Mr. repeated his commitment Williams misrepresenta- candor Williams’s lack of pate a full-time basis in the station’s on 1985, 20, May kofsky tion. On administrative the United States District Court denying judge opinion issued an Inter- January District of Columbia application. exactly mountain’s refused to three the date of integration Mordkofsky’s Intermountain for its give testimony. credit unfavorable In its complaint, a demerit for lack sought compensa- statement assessed Intermountain license, candor. tion for the loss of the which was million. valued at $15 appealed Intermountain the decision to an again FCC review board. On be- December Bloosten & Mord- explain kofsky summary judgment seeched his inclusion moved for integration refused, He statement. dismissal of the claims on the ground and on December the review board were time-barred. *4 appeal. denied pending, Intermountain’s Intermoun- While the motion was the District of initially sought tain further review but Columbia Appeals, 6, later Court of on February 1989, appeal exchange Knight Furlow, withdrew its in for a in issued its decision $1 (D.C.1989). a competing million settlement from 553 A.2d appli- ultimately who cant was awarded the broad- Knight, attorney Furlow had drafted a casting license. plaintiffs whereby will the father the 1986, In September following primary beneficiary plaintiff, the settle- Knight. was the ment and the of dismissal Intermountain’s Id. at 1232. following the father’s death, appeal, the law firm Watkiss Campbell & the in will was contested a Florida and, malpractice 6,1983, retained bring May was to action court on was invalidated on against Mordkofsky ground Bloosten & a District the that Knight had exercised undue of Columbia court. Because the Williamses influence over his father. Id. at 1232-33. expressed running Knight concern the appealed about of the the invalidation ato Florida applicable statutory period Appeals, limitation Court of the which affirmed the lower suit, malpractice 18, Campbell ruling Watkiss & court’s April re- on 1984. Id. at 1233. Nearly later, years 17, 1987, searched of Columbia case law April three on Knight determined that the statute limitations for filed suit Furlow in the Dis- legal malpractice Columbia, years, actions was three trict of alleging legal malpractice. running injury motion, from Upon the date of rather Id. than Furlow’s the trial court the date of the actionable advice. It dismissed complaint further as time-barred three-year determined Intermountain’s oc- statute limitations. Id. On May 20,1985, appeal, curred on the adminis- the District of Columbia Court of Appeals affirmed, trative law it a holding denied television broad- May casting Hence, 6, 1983, Knight license worth million. when incurred $15 attorneys concluded, attempt preserve Intermountain’s com- and court costs in an 20, plaint only by May validity need be filed 1988. the will and ameliorate Furlow’s alleged negligence, Knight suffered express The Williamses continued con- from malpractice, Furlow’s and the statute of Campbell cern Watkiss & that the time to running. limitations commenced Id. at 1235- malpractice expir- file their claims be Knight’s complaint 36. Since was filed over 1987, ing. During spring three time he incurred those Campbell again the statute of limi- reviewed fees, legal his claims were time-barred. Id. decided, tations issues. It as precautionary at 1236. measure, complaint to file the earlier than planned possibility on the that a Relying Knight, court could on the District of Colum- 7, January Mordkofsky find the claims accrued on bia trial court in ruled that In- 1985, Mordkofsky unfavorably when testified termountain suffered from Bloosten & judge, Mordkofsky’s before FCC administrative law malpractice November $7,235 instead of when the when it televi- incurred fees to over- May damage sion was denied on come license caused Accordingly, Campbell Mordkofsky’s integration inclusion of the complaint against filed the application. Bloosten & Mord- statement in radio UTI’s cellular counterclaims, the As to Intermountain’s Accordingly, the trial court held that bifurcated the and scheduled trial court case complaint accrued claims an initial bench trial determine status as of at that time and were time-barred regarding of District of law Columbia Intermountain’s November 1987. Because at time & statute of limitations Watkiss time, complaint was after this trial filed complaint. only is- filed its court dismissed four of five assert- sues to be tried were status Subsequently, complaint.2 ed in the January the date on which the com- Appeals for the Dis- Court of United States plaint against Bloosten was trict affirmed trial of Columbia Circuit filed, Knight, and whether decided after ruling. Mordkofsky, court’s Williams date, changed ruled that law. The (D.C.Cir.1990). F.2d 158 subject to the that Watkiss & was on June The instant case commenced law the as it Columbia existed (for- Saperstein when complaint at filed the time the merly Campbell) filed a attorneys duty no predict “ha[d] in Utah district court Intermountain modifications, anticipate changes, and/or Williamses, seeking unpaid legal and the existing clarifications law.” The trial an- fees. the Williamses court also ruled that status the law *5 counterclaimed, alleging and that swered Knight’s the District of effect Columbia and Campbell negligence committed Watkiss & questions law on that law were of by failing implied and contract breached its court. $7,235 in
to
of
attor-
consider
determining
In
of the
in the
status
law
ney
limitation-triggering
a
of
fees as
statute
Columbia,
District of
the trial court reviewed
Mordkofsky
event
case.
statutory
case
from
and considered
and
law
jurisdiction.
Byers
The
included
that
cases
counterclaims were dismissed
two
The
Burleson,
(D.C.Cir.1983),
v.
846
(1)
attorney
clairvoyant and
need not be
Campbell respond
“[a]n
Vande
changes
future
law.”
correctly
that District of
foresee
ruled
609,
(Iowa
Kop
528
613
v.
N.W.2d
the time
changed
between
Columbia law
McGill
1995);
Goldfein,
Cal.App.3d
v.
113
Ruchti
Intermountain’s
see
Campbell filed
928,
375,
(1980);
v.
Cal.Rptr.
378
Stake
170
complaint and the time
(Fla.Dist.Ct.
Harlan,
1183,
(2)
1185
time-barred;
529 So.2d
the trial court
dismissed as
Cillo,
N.J.Super.
226
App.1988);
v.
Procanik
correctly
attempts
Intermountain’s
dismissed
132,
985,
(App.Div.1988).
A.2d
994
preclude judgment
543
of fact to
to create issues
law;
(3) the trial court
as a matter of
successfully
that his
plaintiff
If the
shows
correctly
counter-
dismissed Williamses’
applicable
it is well
attorney erred under
allege
failed
the Williamses
claims because
attorney may
avoid
recognized that
still
cognizable injury
as a
to themselves
liability by showing
his error was the
alleged
Campbell’s
mal-
result Watkiss
unsettled,
uncertain,
an
or debata
result of
practice.
applicable law.
ble state of the
See Cianbro
784,
Martin,
Corp.
804
v. Jeffcoat
II. ANALYSIS
(4th
(D.S.C.1992), aff'd, 10 F.3d
Cir.
789
806
legal malprac
a claim of
To sustain
Lewis,
349,
1993);
118
v.
13 Cal.3d
Smith
(1)
tice, plaintiff
must show the existence of
589,
(1975),
621, 627,
Cal.Rptr.
530 P.2d
595
(2)
relationship,
attorney-client
the exis
an
Marriage
In re
grounds,
overruled on other
(3)
lawyer,
duty
part
on the
tence
633,
Brown,
838,
Cal.Rptr.
126
15 Cal.3d
(4)
duty, and
perform
the failure
(1976);
14,
561, 569 n. 14
641 n.
544 P.2d
proxi
was the
negligence
Kirk, Pinkerton, McClelland, Savary
Meir v.
damage
to the client.
mate cause of
Carr,
399,
(Fla.Dist.Ct.App.
561 So.2d
402
Barber,
887,
(Utah
v.
765 P.2d
889
Williams
Jones,
1990);
Pogue
Day,
Amer
Reavis &
1988)
J.).
(Howe,
(plurality)
An
has
Inc.,
80,
Envirecycle,
Ga.App.
ican
217
456
“
skill,
duty
prudence, and
‘to use such
Desmond,
264,
(1995);
267
Lewis v.
S.E.2d
ordinary
diligence
lawyers
skill and
as
678,
(1992);
797,
187 A.D.2d
589 N.Y.S.2d
679
commonly possess
capacity
and exercise
Booth, Fish,
Quality Inns
Int’l
Inc.
they
performance of
tasks which
Hall,
1,
Simpson,
N.C.App.
58
Harrison &
”
Hamm,
(quoting Lucas v.
undertake.’
Id.
(1982);
762
v. Swee
S.E.2d
Howard
583,15
P.2d
Cal.Rptr.
56 Cal.2d
ney,
App.3d
27 Ohio
N.E.2d
(1961)).
Moreover,
en
(1985).
*7
gaged
litigation
be conversant with
must
hold
the
Most courts
issues of wheth
procedural
the
and substantive
rules
whether
error
er the
erred and
the
Hip
govern
litigation
the action. See
by vagaries in the law raise
was caused
(Utah 1993).
987,
Sharp,
well v.
858 P.2d
989
questions of law to
the court.
be decided
charged
attorney
is
with
Where
Mitchelson,
452,
F.Supp.
v.
623
See Hanlin
law,
regarding applicable
plaintiff
an error
(2d
(S.D.N.Y.1985),aff'd,
malpractice “It well settled that an On is an question whether of an attor dards. Because the evaluation of reasonableness legal interpreta ney’s it made an erroneous services must be on law as based law, question tion we will afford the ren is a existed at the time such services were words, trial decision no deference review at In other court’s but dered.” 858 P.2d
847 (U.S.A.), Ong inju Int’l several causing it for correctness. See after the incident ry 447, Corp., Ave. P.2d had Inc. v. 11th 850 452 occurred.” v. Malcolm Ehrenhaft (Utah Price, Inc., (D.C.1984). 1993). 1192, 483 A.2d 1201 fact, discovery In approved rule had been that at The trial determined legal malpractice cases District of & filed time Watkiss Intermoun- of Appeals Columbia Court and federal applicable complaint, tain’s statute of lim jurisdiction courts in that since 1983. See id. itations in the District of Columbia com injury Under either the rule or the discov- running malpractice menced when the caused ery applied by rule as District of Columbia major significant injury” “a and that the Furlow, prior Knight courts 553 A.2d incurred to assessment of fees cure (D.C.1989), a court would not have held negligent attorney’s harmful acts did not limitations statute for Intermoun- qualify under the rule. as an tain’s trial court determined that under rele $7,235 triggered by the incurring of vant Columbia case attorney fees rather than when Intermoun- did not err. An examination of tain’s for a television license was this case law reveals that court’s denied. No District of Columbia case even interpretation is sound. legal the incurring intimated that fees later, significant inju- rather than some more many years, For Columbia ry triggering could constitute a event. In- “injury courts rule” to applied had deter deed, cite, Knight decision did not nor mine when the statute of limitations com cited, any prior could it have District of running legal menced actions. holding Columbia case in Packers, Myers See Fort Inc. v. Seafood of attorney the statute of Johnson, Steptoe F.2d limitations. (D.C.Cir.1967). rule, a claim “Under this legal malpractice plaintiff- accrues when pinpointing accrual for a date injury, client actual when suffers the act malpractice claim under the statute limita- causing Byers occurs.” Burle tions, the District Columbia courts
son,
856, 859-60 (D.C.Cir.1983);
713 F.2d
see Knight
relatively
selected dates of
substan-
Bittman,
also Hunt v.
injuries.3
tial
Myers
The courts in Fort
Sea-
(D.D.C.1980), aff'd,
1020-21
ucts. 684 (“Finally, point we out that the interests rule, reasoning so it would clined to judicial economy appli- militate favor of public policy allowing harm to the cause discovery cation of the In rule. cases like plaintiffs adequate compensation to obtain bar, professional the one at where the re- for latent diseases. upon request remedy turns damages re- work, sulting from preclude ap- defective rule, adopted The traditional American plication likely of the rule would serve to Columbia,
in the District of
is that recov-
encourage
instance,
litigation in the first
ery
damages
based on future conse-
resort.”).
than
rather
as a last
quences may
only if
be had
such conse-
certain.”_
quences
“reasonably
are
These concerns
ques-
are relevant to the
incurring
attorney
tion of whether the
“reasonably
In
view the
certain” stan-
triggers the
Columbia statute of
dard,
appears
trigger-
[under
it
a rule
legal malpractice
limitations on
A
claims.
ing
upon
the statute of limitations
forcing
upon
rule
clients to
suit
either file
asbestosis,]
showing of
there can never be
incurring
attorney
losing
fees or else risk
(1)
recovery
a
for cancer unless
a lawsuit is
opportunity
to seek redress for subse-
filed within three
of the asbestosis
quent, greater harms would threaten the
(2)
diagnosis, and
cancer becomes manifest
public policy allowing plaintiffs to receive
during the course of that lawsuit. For it is
compensation for
In
actionable losses.
addi-
altogether likely
plaintiff],
[the
tion, such a rule could
clients
force
into court
upon receiving
diag-
the “mild asbestosis”
attorneys
attorneys
their
before the
nosis, sought to recover for a cancer which
opportunity
had the
cure
mistakes.
(or
not)
might
develop,
defen-
[the
District of Columbia case law
argued forcibly
would have
dant]
Knight required
greater injury
a
than the
probability
development
of such a
...
incurring
attorney
mere
of modest
fees to
speculative, conjectural,
too
uncertain to
the statute of limitations for
support damage
award.
malpractice actions.
(footnotes omitted).
addition,
Id.
argues
that one District of
explained,
judicial
concerns for
econo-
implied
Columbia court at least
stat-
my
militate
sueh a rule:
triggered by
ute of limitations could be
illness,
Upon diagnosis
incurring
of an initial
such as
fees.
In a footnote in
asbestosis,
injured party may
Byers,
not need
the court referred to four treatises
judicial
sources,
or desire
relief. Other
and articles
more detailed
“[f]or
discussions
compensation
private
injury
such as workers’
developed
rule and other rules
insurance, may provide adequate
plaintiff-
recom-
to determine the time of accrual of
pense for the initial ailment.
If no
legal malpractice.”
further
client’s cause of action for
ensues,
injured party
disease
851
recovery
legal
Intermountain to obtain
for
able
research. The trial court found it
$15
unnecessary
jury
million
license.
for a
to determine whether
Campbell adequately
researched
Also,
hasty litiga-
such a rule would foster
investigated
question
of when the
tion, contrary to the District of Columbia’s
running.
statute of limitations commenced
judicial
public policy to conserve
resources.
court,
According
“[t]hey
if
to the trial
did it
Wilson,
120; Ehrenhaft,
See
684 F.2d at
reasons,
right,
wrong
they
even for the
then
Upon
expenditure
A.2d at 1203.
of sums
okay.”
are
to
con-
ameliorate
setback caused
flicting
application,
cellular radio
Intermoun-
qualify
immunity
To
liability
for
may
thought
judicial
tain
have
it did not need
consequences
of an erroneous
inter-
fact,
relief.
believed that
law,
pretation of unsettled and uncertain
Mordkofsky’s testimony
impress upon
lawyers perform
most courts demand that
administrative
FCC’s
law
investigation necessary
the research and
to
Mordkofsky
rather
than Inter-
Bloosten
See,
judgment.
e.g.,
make an informed
responsible
conflicting
mountain was
Lewis,
Smith v.
Cal.Rptr.
13 Cal.3d
integration
statement
UTI’s cellular radio
(1975).
Id.
As stated courts select- (1) injuries conclude that the trial court cor- seemingly ed dates of substantial as We limitations, rectly triggers and the ruled as a matter of law that at the for the statute of Campbell filed Intermoun- not be found. time Assets defendants are complaint, dissipated long- tain’s Columbia law sometimes or secreted. The delay, greater more substantial than the er the likelihood that may of modest fees to pur- some event occur which will make (2) limitations; applicable litigation statute of cor- suit of the more difficult or even rectly jury case, impossible. change refused to allow a In this it was a adequacy CampbeU’sinvestiga- of Watkiss & the law as to when the statute of limitations *13 running. tion and research into the statute of limita- commenced Had this case been (3) issues; ques- earlier, properly only tions treated as a filed two change months tion of law the issue of when Intermountain the law would not have affected it. (4) significant injury; properly suffered a majority opinion ap- Plaintiffs and the Campbell’s treated as irrelevant proach plaintiffs’ only duty this case as if was prelude filing Intermoun- sixteen-month day to file the last allowable and because (5) complaint; properly found tain’s plaintiffs reasonably researched the law and allegedly neglect- not liable for be, determined when last ing to inform Intermountain of the risks plaintiffs possibly cannot be I liable. dis- delaying filing inherent of its com- agree. I explained, plaintiffs’ duty As have (6) correctly plaint; and dismissed the proceed diligence, was with reasonable not
Williamses’ individual claims. needlessly delay thought until what it We therefore affirm. possible day. last DURHAM, J., BRIAN, and PAT B. The record before us does not contain Judge, concur. evidence as to the reason for the sixteen- delay. month It does reflect that Mr. HOWE, Justice, concurring and delay Williams was concerned about the and dissenting: urged plaintiffs to file the action months except I part concur as to that finding earlier. No was made the trial majority opinion plain- which holds that the delay court as to whether the was reasonable delay tiff law firm’s of sixteen months in under the circumstances. because filing compliant could not be actionable. it is not clear to me whether defendants’ agree plaintiffs IWhile were not re- pursued independent counsel raised and this quired anticipate changes quite theory delay, I would remand the case to apart requirement duty from that is pursue the trial court to allow defendants to attorneys pursue their client’s business theory this if that court determines that it diligence promptness. with reasonable adequately raised there. Rule 1.3 of the Rules of Professional himself, Having disqualified ZIMMER- states, Conduct “A act shall with MAN, C.J., herein; participate does not PAT diligence promptness in rep reasonable BRIAN, Judge, B. sat. resenting a client.” Violations of the rule of conduct can constitute evidence of mal STEWART, C.J., Associate does not practice. Mordkofsky, Williams 901 F.2d participate herein. (D.C.Cir.1990) (citing Waldman v. Levine, (D.C.1988)). 544 A.2d 690-91 only
The statute of limitations is diligence
measure reasonable
promptness. An should be anx
iously pursuing his client’s case even with
out the firm hand of an absolute deadline at
his back.
Damaging often occur in events the course litigation. Litigants and material wit- away
nesses sometimes die or move and can-