Gonzales v. Stewart Title

905 P.2d 176, 111 Nev. 1350, 1995 Nev. LEXIS 146
CourtNevada Supreme Court
DecidedNovember 1, 1995
Docket23278
StatusPublished
Cited by10 cases

This text of 905 P.2d 176 (Gonzales v. Stewart Title) is published on Counsel Stack Legal Research, covering Nevada Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gonzales v. Stewart Title, 905 P.2d 176, 111 Nev. 1350, 1995 Nev. LEXIS 146 (Neb. 1995).

Opinions

[1351]*1351OPINION

By the Court,

Young, J.:

This is an appeal from an order of the district court dismissing appellants’ complaint. On November 12, 1991, appellants filed in the district court a complaint alleging causes of action against respondents for legal malpractice, breach of contract, negligence and breach of fiduciary duty. On April 7, 1992, the district court entered an order granting respondents’ motion to dismiss and dismissing appellants’ complaint as barred by the statute of limitation. This appeal followed.

In 1979, appellants entered into an agreement for the sale of certain real property. The agreement' called for the buyers to execute a promissory note in favor of appellants and Dave Andrulli, appellants’ father, as joint tenants. The promissory note which appellants received provided, however, for the buyer to pay to the order of Dave Andrulli and appellants, or to the order of the survivors of them, without explicitly mentioning joint tenants or a joint tenancy. On April 14, 1986, after Dave Andrulli had died, Lauri Andrulli, his wife and appellants’ stepmother, filed suit to have the note declared held in a tenancy in common, so that it would become part of the estate of which she was the beneficiary. On September 1, 1987, the district court entered an order finding that the note was held by appellants and Dave Andrulli as joint tenants and not as tenants in common. On November 16, 1987, the district court granted partial summary judgment in appellants’ favor. On November 16, 1987, the district court entered an order denying appellants’ request for attorneys’ fees. The underlying action was not concluded until April 16, 1990, when the district court entered an order and stipulation for dismissal with prejudice.

On November 12, 1991, appellants filed in the district court their complaint for legal malpractice against respondents. A now-deceased attorney from respondent Henderson and Nelson had prepared the defective promissory note, and respondent Stewart Title Company was the escrow agent for the transaction involving the note. On April 7, 1992, the district court entered an order granting respondents’ motion to dismiss appellants’ complaint based on expiration of the statute of limitation. This appeal followed.

Appellants became aware of the malpractice, at the latest, on April 14, 1986, when Lauri Andrulli filed the action seeking construction of the note. The district court entered its order [1352]*1352denying appellants’ motion for attorney’s fees in that action on November 16, 1987. Appellants filed their complaint for legal malpractice on November 12, 1991, four years and seven months after Lauri Andrulli filed her complaint, but within four years of the date that the district court entered the order denying their request for attorney’s fees.

Appellants contend that the district court erred in finding their claims barred by the statute of limitation and in dismissing their claim on that basis. Specifically, appellants contend that the statute of limitation should begin to run on the date the district court entered its order denying their motion for attorney’s fees, rather than on the date Lauri Andrulli filed her complaint, because they could not know the existence and extent of their damages until the district court had ruled on Lauri Andrulli’s lawsuit and on their request for attorney’s fees.

We disagree. NRS 11.207(1) provides that a malpractice action against an attorney must be initiated within four years after the plaintiff suffers damages and discovers, or through the use of reasonable diligence should have discovered, the material facts constituting the cause of action. In this case, appellants became aware of the defect in the note in April 1986. Therefore, appellants’ complaint for attorney malpractice was time-barred when it was filed on November 12, 1991, more than four years after appellants discovered the defect in the note.

Granted, appellants were not aware of the precise extent of their damages when they discovered the defect in the note. However, appellants were aware that there would be damages of some kind. Had respondents’ complaint been dismissed, as ultimately happened, there would be attorney’s fees for successfully defending the action. Had respondents been successful, appellants’ damages would have been even greater due to both the loss of the property found to be held in a tenancy in common, as well as their attorney’s fees.

Public policy encourages litigants to bring their actions to an end as quickly as possible, hence the existence of statutes of limitation. In this case, nearly twelve years elapsed from the time of the defective drafting until the malpractice action was filed. One can speculate that this period could have been considerably longer had the drafting taken place even earlier.

Appellants cite as authority K.J.B., Inc. v. Drakulich, 107 Nev. 367, 811 P.2d 1305 (1991), for the rule that a malpractice action is premature and the statute of limitation does not begin to run until the conclusion of the underlying litigation. However, the facts of the instant case do not fall within the holding of K.J.B. While K.J.B. involved attorney error in the course of [1353]*1353litigation, the instant case involved a drafting error that gave rise to the litigation, but was nonetheless separate from the underlying litigation. Therefore, the rule in K.J.B. does not apply to these facts.

One of this court’s more recent holdings is much more instructive on this issue. Charleson v. Hardesty, 108 Nev. 878, 839 P.2d 1303 (1992), involved a defective trust instrument. In Charleson, we held that the statute of limitation for an action for an attorney’s alleged drafting error began to run from the date the client hired an independent attorney to examine the document. Id. at 884, 839 P.2d at 1307-08. Although we did not explicitly hold whether litigation based on the alleged error tolled the statute of limitation, there was such litigation and the statute of limitation was not tolled. In the case at bar, appellants became aware of the drafting error at the time the complaint was filed, forcing them to obtain legal counsel. Therefore, the statute of limitation began to run at that time.

The trend in our neighboring jurisdictions appears to be that the statute of limitation for an attorney malpractice action begins to run when the client suffers harm and learns or should have learned of the harm, even when the extent of the damages is not learned until a later date. See, e.g., Bonz v. Sudweeks, 808 P.2d 876 (Idaho 1991) (action for malpractice accrued when plaintiffs learned of cloud on title due to attorney’s improper recording and investor refused to participate in sale); Dearborn Animal Clinic, P.A. v. Wilson, 806 P.2d 997 (Kan. 1991) (statute began to run when plaintiffs answered interrogatories in underlying action thereby learning of attorney error and damages); Stevens v. Bispham, 851 P.2d 556 (Or.

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Gonzales v. Stewart Title
905 P.2d 176 (Nevada Supreme Court, 1995)

Cite This Page — Counsel Stack

Bluebook (online)
905 P.2d 176, 111 Nev. 1350, 1995 Nev. LEXIS 146, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gonzales-v-stewart-title-nev-1995.