Exact Dollar Amount Of Damages Not Required For Legal Malpractice Statute Of Limitations To Start

The Kentucky Supreme Court overruled prior precedent in holding a legal malpractice claim to be filed untimely

In the underlying action, Shan Wolfe (Wolfe) filed a professional malpractice claim against Joe Kimmel and The Kimmel Law Firm (collectively, Kimmel) for negligently providing her poor legal advice regarding her exit from a business that she co-owned. The sole issue we must address is on what date Wolfe’s damages became irrevocable and non-speculative sufficient to trigger the one-year statute of limitations for a professional malpractice claim under KRS 413.245.

After careful review of our decisional law, we conclude that Alagia, Day, Trautwein & Smith v. Broadbent, was wrongly decided and has led to inconsistencies in our jurisprudence regarding when damages are considered irrevocable and non-speculative for a professional malpractice claim. Accordingly, we hereby overrule Broadbent and its progeny insofar as they hold that, for a non-litigation legal malpractice claim, a claimant’s damages are not irrevocable and non-speculative until the claimant knows the exact dollar amount of damages he or she incurred because of the malpractice. To establish more uniformity in how KRS 413.245 is applied, we now hold that for a non-litigation legal malpractice claim, a claimant’s damages are considered irrevocable and non-speculative when the claimant is reasonably certain that damages will indeed flow from the defendant’s negligent act.

We therefore affirm the Court of Appeals, though on slightly different grounds, and hold that Wolfe’s legal malpractice claim against Kimmel was not timely filed.

The court concedes

Notwithstanding the ostensible simplicity of the foregoing principles, the history of our case law in this area is “extant, yet murky” to say the least, and demonstrates that difficulties often arise in determining whether and when an “irrevocable and non-speculative injury” has occurred.

The new rule

But we now hold that for such a claim damages are considered irrevocable and non-speculative when the claimant is reasonably certain that damages will indeed flow from the defendant’s negligence.

In this case, the one-year statute of limitations began running on Wolfe’s claim against Kimmel no later than August 2016 when she was advised by another attorney of Kimmel’s malpractice. By that time, negligence and damages had both occurred sufficient to trigger the occurrence date limitation. It was undisputed that Kimmel and Wolfe had an attorney client relationship; Kimmel neglected his duty to exercise ordinary care when he provided her incorrect advice surrounding her exit from GenCare; and his negligence was the proximate cause of Wolfe’s legal injuries. Wolfe’s damages were also irrevocable and non-speculative in August 2016: according to her complaint against Kimmel, she suffered emotional distress for which she sought compensation when she received the August 1 cease-and-desist letter; and she was sued by Lampley and GenCare on August 19, which she incurred expenses and emotional distress in defending. Even assuming arguendo that the foregoing damages were insufficient for a cause of action to accrue, Farmer informed her in no uncertain terms in August 2016 that she needed to settle the case as soon as possible because she would lose at trial and owe Lampley and GenCare a substantial amount of money. She was therefore reasonably certain at that time that damages would indeed flow from Kimmel’s negligence. The discovery date limitation is not applicable in this case because there are no circumstances suggesting that the cause of action was not reasonably discoverable.

Therefore, because the occurrence date limitation began to run in August 2016, and Wolfe did not file her malpractice claim until February 2018, her malpractice claim against Kimmel is time barred.

(Mike Frisch)