Anderson v. Neal

428 A.2d 1189, 1981 Me. LEXIS 796

• Court: Supreme Judicial Court of Maine
• Decided: April 30, 1981
• Status: Published

Opinions

GLASSMAN, Justice.

In this action for damages for alleged attorney malpractice, the plaintiffs, Raymond and Gladys Anderson, appeal from a summary judgment in favor of the defendant, Francis F. Neal, entered in the Superi- or Court, York County.

The parties have submitted this appeal on an agreed statement of facts. M.R.Civ.P. 74A(d). The plaintiffs commenced this action on June 1,1979 by filing the complaint. The defendant is an attorney who had been hired to do a title examination of a parcel of real estate being purchased by the plaintiffs. In his title opinion letter, dated March 31,1969, the defendant failed to note the existence of a right-of-way across the property in question. This right had been an encumbrance, in fact, since 1915. The plaintiffs, in reliance on the defendant’s title opinion, acquired title to the real estate on March 31, 1969. The plaintiffs did not have actual knowledge of the right-of-way until an unspecified date less than six years prior to the commencement of this action. It was stipulated that the value of the property purchased was diminished by the existence of the right-of-way.

The Superior Court granted the defendant’s motion for summary judgment. In a written order it ruled that the plaintiffs’ cause of action accrued on March 31, 1969 and was therefore barred by the applicable statute of limitations. 14 M.R.S.A. § 752. We vacate the judgment.

Neal contends that this Court is foreclosed, both by its own decisions and by the Legislature’s “adoption” of those decisions, from recognizing a rule that dates accrual of a cause of action for legal malpractice from the date when the malpractice is, or reasonably should have been, discovered. From our reading of our prior cases and of the applicable legislation, we find nothing to impede this Court’s freedom to declare when a cause of action accrues in attorney malpractice cases.

Although the Legislature has specified that the general statute of limitations in civil actions, 14 M.R.S.A. § 752, shall run for six years “after the cause of action accrues,” it has never defined when a cause of action accrues under this statute but has left that determination to the Judicial Department. This Court has the power to define the time of accrual. See Williams v. Ford Motor Co., Me., 342 A.2d 712, 714 (1975); see also Neel v. Magana, Olney, Levy, Cathcart & Gelfand, 6 Cal.3d 176, 190-91, 98 Cal.Rptr. 837, 846-47, 491 P.2d 421, 430-31 (1971); Franklin v. Albert,-Mass.-, 411 N.E.2d 458, 462 (1980); Hendrickson v. Sears, 365 Mass. 83, 88, 310 N.E.2d 131, 134 (1974); Peters v. Simmons, 87 Wash.2d 400, 405, 552 P.2d 1053, 1056 (1976).

The legislative recognition of the need for a discovery rule of accrual in certain situations, see, e. g., 14 M.R.S.A. § 752-A, does not preclude this Court from giving judicial recognition to such a need in others. See Hendrickson v. Sears, supra, 365 Mass, at 89, 310 N.E.2d at 135. Nor are we precluded from announcing a discovery time of accrual in legal malpractice cases by the so-called doctrine of legislative acquiescence. The Maine Legislature’s repeated reenactment of the same statute of limitations since 1821 does not justify the assumption that the Legislature has adverted to and approved the decisions of this Court regarding accrual of causes of action to the extent necessary to foreclose judicial reconsideration of prior cases. See Neel v. Magana, Olney, Levy, Cathcart & Gelfand, supra, 6 Cal.3d at 191, 98 Cal.Rptr. at 847, 491 P.2d at 431.¹

Even less justifiable is the assumption that the Legislature’s simultaneous reduction of the limitations period in medical malpractice actions from six years to two years and retention of the “accrual” date for commencement of the statute’s running, P.L.1931, ch. 62, revealed legislative disapproval of the “discovery” rule and a legislative mandate that a cause of action for professional malpractice shall accrue on the date of injury. In a recent case, the Massachusetts Supreme Judicial Court rejected the assumption that the Massachusetts Legislature’s failure to enact a proposed discovery rule precluded contrary judicial interpretation of the word “accrues” in that state’s statute of limitations governing medical malpractice actions. See Franklin v. Albert, supra, 411 N.E.2d at 461, announcing a discovery rule and overruling Capucci v. Barone, 266 Mass. 578, 165 N.E. 653 (1929), which defined the time of accrual in medical malpractice cases as the date of the malpractice. Agreeing with the Supreme Court of Oregon that “ ‘no one knows why the legislature did not pass the proposed measures,’ ” Franklin v. Albert, supra, 411 N.E.2d at 461, quoting Berry v. Branner, 245 Or. 307, 311, 421 P.2d 996, 998 (1966), the highest court in Massachusetts concluded that legislative failure to give statutory recognition to a discovery rule may have resulted from the

“belief that the matter should be left to be handled by the normal processes of judicial development of decisional law, including the overruling of outstanding decisions to the extent that the sound growth of the law requires.” Franklin v. Albert, supra, 411 N.E.2d at 461-62, quoting H. Hart & A. Sacks, The Legal Process: Basic Problems in the Making and Application of Law 1395-96 (tent. ed. 1958).

We agree with the Massachusetts Supreme Judicial Court that, absent explicit legislative direction, definition of the time of accrual of causes of action for professional malpractice remains a judicial function. See also Neel v. Magana, Olney, Levy, Cathcart & Gelfand, supra, 6 Cal.3d at 192, 98 Cal.Rptr. at 847, 491 P.2d at 431. Of course, the Legislature has plenary authority to expressly change any rule we announce.

It is true that we have declared, as a general rule, that a cause of action in tort accrues at the time when the plaintiff sustains a judicially cognizable injury. E. g., Bozzuto v. Ouellette, Me., 408 A.2d 697, 699 (1979); Williams v. Ford Motor Co., supra; see Tantish v. Szendey, 158 Me. 228, 182 A.2d 660 (1962), as interpreted in Williams v. Ford Motor Co., supra. Thus, the institutional considerations of uniformity, certainty and finality in the law must figure into any decision to carve an exception from a settled rule. However, the principle of stare decisis is and must be broad enough to require departure from otherwise governing precedent when the case before the court cannot be decided rationally and fairly on the basis of settled law. See Comment, Stare Decisis, 30 Me.L.Rev. 55 (1978); see also Beaulieu v. Beaulieu, Me., 265 A.2d 610, 613 (1970); Franklin v. Albert, supra, 411 N.E.2d at 462. This Court has fulfilled its role of reasoned decision-making by departing from precedent when principles long adhered to have lost their vitality or lack the capacity to produce just results. See, e. g., Black v. Solmitz, Me., 409 A.2d 634 (1979); Davies v. City of Bath, Me., 364 A.2d 1269 (1976); Beaulieu v. Beaulieu, supra.

The general rule—accrual at the time of judicially cognizable injury—generally works, and we do not abandon it. In most cases, this rule represents a just balance between a plaintiff’s legitimate claim and a defendant’s need for an eventual end to potential liability. However, the general rule does not adequately adjust the balance of the parties’ rights in situations involving the specific complex of interests represented by a legal malpractice claim and should yield to a more just rule.

We start our analysis with a recognition of the fundamental proposition that attorney and client necessarily share a fiduciary relationship of the highest confidence. See, e. g., Neel v. Magana, Olney, Levy, Cathcart & Gelfand, supra, 6 Cal.3d at 188-89, 98 Cal.Rptr. at 844-45, 491 P.2d at 428-29; Hendrickson v. Sears, supra, 365 Mass, at 90, 310 N.E.2d at 135. See generally 7 Am.Jur.2d Attorneys at Law § 119 (1980). The purchaser of real property who employs an attorney to search the title must rely absolutely on the attorney’s representations regarding the state of the title in deciding whether to purchase the property. In the instant case, the plaintiffs relied on an affirmative, albeit negligently made, misrepresentation by the defendant-attorney.

The parties’ agreed statement of facts stipulates that the plaintiffs have sustained damage as a result of an affirmative misstatement by the attorney in the title opinion. Although the amount of the loss is undisclosed, in cases of this type the magnitude of the loss can be catastrophic to the client. To adopt a rule which bars redress of such a loss before the client reasonably should have discovered it is unreasonable and unfair. The exercise of ordinary care could not have led the client to discover the defendant’s negligence unless “ordinary care” implies that a prudent person would not rely upon the attorney’s title opinion but would hire a second attorney to check the work of the first, “an expensive and impractical duplication, clearly destructive of the confidential relationship between the practitioner and his client.” Neel v. Magana, Olney, Levy, Cathcart & Gelfand, supra, 6 Cal.3d at 188, 98 Cal.Rptr. at 844, 491 P.2d at 428.

The essence of the attorney-client relationship in title cases is the faith and trust which the client places in the representations of the attorney regarding the status of the title to the property he is about to purchase. The security of knowing that the title is good and the property is free of encumbrances is what the client purchases when he retains an attorney to search title for him. See, e. g., Family Savings and Loan, Inc. v. Ciccarello, 157 W.Va. 983, 993, 207 S.E.2d 157, 163 (1974). Under such circumstances, fairness, justice and common sense dictate that we join the courts around this country that have recognized that a cause of action for negligent search of a title by an attorney does not accrue until the plaintiff discovers, or reasonably should have discovered, the injury.²

Indeed, the Legislature has established a policy that encourages the judiciary to date accrual from the time of discovery in cases of professional malpractice. In Title 14, Section 859 of the Maine Revised Statutes, the Legislature mandated that a fraudulently concealed cause of action does not accrue until discovery of the cause of action. Section 859 represents legislative recognition of the fact that dating accrual of an undiscoverable cause of action from the time of injury works an injustice on injured plaintiffs.

Although there is neither an allegation nor a suggestion of fraudulent concealment in the instant case, the nature of the fiduciary relationship between attorney and client, the reliance placed upon the attorney by the client and the lack of means for discovery place the client in a situation akin to that of one who has had a cause of action fraudulently concealed from him. See Neel v. Magana, Olney, Levy, Cathcart & Gelfand, supra, 6 Cal.3d at 188-89, 98 Cal.Rptr. at 844-45, 491 P.2d at 428-29. In order to align the common law of this state with the well-considered legislative policy of Section 859, we hold that a cause of action based on an allegedly negligent title search accrues at the time the plaintiff discovers, or reasonably should have discovered, his injury.³

The principles we here apply may require a reexamination of Tantish v. Szendey, supra, in the medical malpractice area when the issue is properly before us. See Franklin v. Albert, supra; Annot., 80 A.L.R.2d 368, § 7(b) (1961), and Later Case Service 167 (1979).

The entry is:

Judgment vacated.

Remanded to the Superior Court for further proceedings consistent with the opinion herein.

1 . In 1962 in the case of Tantish v. Szendey, 158 Me. 228, 237, 182 A.2d 660, 664 (1962), this Court held that a cause of action for medical malpractice accrued at the time of the negligent act. Quoting from Betts v. Norris, 21 Me. 314, 324 (1842), this Court rejected any suggestion that a cause of action for negligence did not accrue until injury was sustained. Tantish v. Szendey, supra, 158 Me. at 235, 182 A.2d at 663. In 1964, the Maine statutes were revised, and the language of the statute of limitations applicable to medical malpractice was unchanged. P.L.1963, ch. 402, sec. 170. In 1975, by way of dictum, we interpreted Tantish as holding that a cause of action for medical malpractice accrues when the plaintiff sustains injury. Williams v. Ford Motor Co., supra, 342 A.2d at 716. How can such reinterpretation of an earlier holding be squared with a strict application of the so-called doctrine of legislative acquiescence? Did the Legislature in 1964 acquiesce in Tantish as written or as subsequently interpreted? Of course, the answer is that the Legislature did neither.

2 . See, e. g., Pioneer Nat’l Title Ins. Co. v. Sabo, 432 F.Supp. 76 (D.Del.1977); Child, Inc. v. Rodgers, 377 A.2d 374 (Del.Super.1977), aff’d in part and rev’d in part on other grounds, 401 A.2d 68 (Del.1979); Mumford v. Staton, Whaley & Price, 254 Md. 697, 255 A.2d 359 (1969); Hendrickson v. Sears, supra; Family Sav. & Loan, Inc. v. Ciccarello, supra. For cases applying the “discovery rule” to other types of attorney malpractice, see, e. g., Yazzie v. Olney, Levy, Kaplan & Tenner, 593 F.2d 100 (9th Cir. 1979) (applying Arizona law); Woodruff v. Tomlin, 511 F.2d 1019 (6th Cir. 1975) (applying Tennessee law); Neel v. Magana, Olney, Levy, Cathcart & Gelfand, supra; Edwards v. Ford, 279 So.2d 851 (Fla.1973); Kohler v. Woollen, Brown & Hawkins, 15 Ill.App.3d 455, 304 N.E.2d 677 (1973); Cameron v. Montgomery, 225 N.W.2d 154 (Iowa 1975); Sorensen v. Pavlikowski, 94 Nev. 440, 581 P.2d 851 (1978); McKee v. Riordan, 116 N.H. 729, 366 A.2d 472 (1976); Mills v. Killian, 273 S.C. 66, 254 S.E.2d 556 (1979); Peters v. Simmons, supra. See Annot., 18 A.L.R.3d 978 (1968 and Supp.1980).

3 . Years ago Dean Pound and Chief Justice Stone recognized the propriety of courts reasoning by analogy from statutes. See Pound, Common Law and Legislation, 21 Harv.L.Rev. 383, 385-86 (1908); Stone, The Common Law in the United States, 50 Harv.L.Rev. 4, 12-15 (1937). The same point was made more recently by Chief Justice Traynor. See Tray-nor, Statutes Revolving in Common-Law Orbits, 17 Cath.U. of A.L.Rev. 401, 402-05 (1968).