Malpractice Clock Starts When Appeal Is Lost

The South Carolina Supreme Court overruled prior precedent and reinstated a legal malpractice claim that the lower court dismissed on statute of limitations grounds.

the client was an auto dealership sued by an unhappy customer who was awarded judgment.

[Client] Stokes-Craven filed a legal malpractice action against Respondents, alleging negligence and breach of fiduciary duty in trial counsel’s representation of Stokes-Craven both prior to and during the trial. Specifically, Stokes-Craven alleged that trial counsel failed to: adequately investigate the facts of the case; prepare or serve written discovery; depose witnesses; obtain copies of the plaintiff’s experts’ curricula vitae; prepare a pretrial brief, trial exhibits, voir dire, and requests to charge; preserve certain evidentiary issues for appellate review; notify Stokes-Craven’s insurance carrier about the claims; and settle the case prior to the jury verdict. Based on these purported errors, Stokes-Craven claimed the jury returned the adverse verdict. Respondents generally denied the allegations and asserted several defenses, including that Stokes-Craven’s claims were barred by the expiration of the three-year statute of limitations.

The court acknowledged that its minority position articulated in the Epstein case was problematic

The facts of the instant case present us with an appropriate opportunity to address the criticism and conflict that has arisen out of our decision in Epstein. As legislatively mandated, we begin our analysis with the well-established discovery  rule. Pursuant to this rule, all legal malpractice actions must be commenced within three years after the claimant knew or by the exercise of reasonable diligence should have known that he or she had a cause of action…

 As evidenced by this case, the key question is when the claimant’s cause of action accrues to trigger the running of the three-year statute of limitations. The answer to this question is complicated by the seemingly endless factual scenarios surrounding the underlying claim of a legal malpractice cause of action. For example, legal malpractice claims may stem from matters involving litigation or negotiated settlements while others may arise out of matters involving the probate of a will or a divorce. Further complicating the determination of when a cause of action accrues is if the claimant pursues an appeal of an unfavorable ruling, such as in the instant case.

Our decision regarding the accrual date must also take into consideration the preservation of the attorney-client relationship as well as the public policy that is fundamental to the efficient management of our judicial system. Clearly, if a client files a legal malpractice cause of action while the client is still represented by counsel during an appeal, the attorney-client relationship is compromised and there are simultaneous lawsuits advocating conflicting positions.

Here, the statute of limitations did not commence until the case was lost on appeal. Thus, the malpractice claim was timely. (Mike Frisch)