ANALYSIS OF MARCH 30, 2017 SUPREME COURT OPINION
(Posted March 31, 2017) Because of travel, I’m a day late in getting to yesterday’s published opinion in Moonlight Enterprises v. Mroz
, a legal-malpractice appeal that turns on the applicable statute of limitations.
The client, Moonlight, hired Lawyer A to represent it in connection with its purchase of three condominium units in northern Virginia. The client alleged that the lawyer failed to investigate the terms of the sale and failed to apprise the client that the deal wasn’t as sweet as it seemed. As a result, client claimed, it bought three problem children.
The lawyer later brought suit on behalf of the client against the condo association, seeking declaratory and injunctive relief. At some point in the litigation, Lawyer A turned the case over to Lawyer B, who worked in the same firm. The case went to trial and the client lost. The trial court poured salt into the wound with a $59K fees-and-costs award.
Now we need to get specific on dates. At the conclusion of the trial on January 12, the parties submitted a final order to the court, but for reasons we don’t know, it never got entered. A week later, on January 19, Lawyer B sent client an e-mail to confirm that client had hired separate appellate counsel, adding that “our attorney client relationship is now at an end.”
Well, almost. A week after that, on January 26, Lawyer B learned that the trial court had misplaced that final order. He therefore prepared another copy, endorsed it, and sent it on to opposing counsel for endorsement. The court entered that order on February 10. The same day, Lawyer B again e-mailed client to explain that he had talked on the phone with the judge’s law clerk. The clerk had both orders, and on instructions from Lawyer B, the clerk ripped up the first one during their conversation. Lawyer B copied the new appellate lawyer on this e-mail, to be sure he knew when the order was entered, for finality purposes.
Let’s move forward three years to another February 10: the client filed a malpractice action against Lawyers A and B for allegedly mishandling the DJ suit. Both lawyers filed pleas asserting the statute of limitations, claiming that the relationship had ended no later than January 26, three years back, when Lawyer B sent in the replacement order. The trial court sustained both pleas and dismissed the case.
Yesterday’s ruling gives the client a partial victory. The justices affirm the dismissal of Lawyer A, since he did nothing at all in the case within the three years before suit was filed. Although the continuing-representation doctrine tolls the statute as long as a lawyer continues to work on the case, that tolling isn’t imputed from one lawyer to another.
It’s different with Lawyer B. Although he claimed that the relationship ended on January 19, he actually took steps after that date to further the client’s interest — speaking with the law clerk to ascertain that the proper order was entered, informing appellate counsel abut the judgment date, and sending the client a final report, all on February 10. That’s enough to fix February 10 as the end date for the representation, so the malpractice action hit the clerk’s office on the deadline day, in time to beat the statute.
Justice Kelsey’s opinion, for a unanimous court, contains an informative discussion on the question of imputation — the idea that Lawyer B’s work in the case should be imputed to Lawyer A because they worked in the same firm. He notes that a majority of courts to consider this issue have refused to impute the tolling, and Virginia now joins that majority. Since tolling is an exception to the statutory limitations period, the court holds that if this form of tolling is to be extended, it should be the legislature’s place to do so.