Hartstone v. McCue

Opinion

STATE OF MAINE . .

, . ~ SUPERIOR COURT Cumberland, ss. . .

Civil Action

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SHELDON HARTSTONE, et al., Plaintiffs

v. ORDER CARL McCUE, Defendant

Plaintiffs Sheldon Hartstone and Northeast Equities Associates Trust (ccllectively, "Hartstone") allege tliat they were injured by alleged improprieties that occurred in conr,ection with a foreclosure sale on September 28, 1992. Hartstone contends that the improprieties in question were committed by Fleet Bank and by Recoll Management Corp, but that he was unable to secure redress against Fleet and

Recol! bemuse ~f legal m&practice ~ ~ i ~ ~ ~ by i i tdefendant

tzd Carl TvIcCue. Before the

court is McCue's motion for summary judgment on statute of limitations grounds.

Specifically, Hartstone contends that McCue represented h m in late 1992 and filed an action on h s behalf on November 10, 1992 to block the delivery of a deed to the

h g h bidder at the foreclosure sale. Hartstone v. Fleet Bank and Recoll Mananement -

Corp., Docket No. CV-92-480 (Superior Court, Penobscot County). After a motion for an ex parte TRO was denied, no service was ever made on defendants, and no further action was taken in the case.

The docket sheei: reflects that on January 12, 1995 notice was sent to McCue's office that a hearing would be held on February 2, 1995 as to whether CV-92-480 should be dismissed under M.R. Civ. P. 41(b). For purposes of summary judgment, there is

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evidence from which it could be found that McCue's office received that notice and did nst izfsrm Hartstone. N o m e appeared at hearing set for Febr.izy 2, 1995, a n d the following day the Penobscot County Superior Court entered an order dismissing the action with prejudice. For purposes of summary judgment, there is evidence from w h c h it could be found that McCue's office also received a copy of the court's order of dismissal and did not inform Hartstone.

Hartstone alleges that he had learned of the alleged improprieties with respect to the foreclosure sale in 1994, before CV-92-480 was dismissed. He subsequently commenced a lawsuit against Fleet and Recoll based on those alleged improprieties in 2000. Hartstone v. Fleet Bank, Docket No. CV-00-339 (Superior Court, Cumberland County). Eecause hiis previous suit against Fleet and Recoll had been dismissed with prejudice, however, Fleet Recoil asserted a defense of res judicata and moved foi. summary judgment. That motion was granted by order filed November 12, 2002, and the Law Court affirmed by memorandum decision on April 28, 2003. Hartstone v. Fleet Bank, Decision No. >vqem-03-63,Docket No. Ciim-32-746.

Hartstone alleges that he only learned of McCue's alleged malpractice in 2002, when Fleet moved for summary judgment in CV-00-339. He commenced h s lawsuit against McCue on March 8, 2004.

Discussion

Under 14 M.R.S.A. 5 753-B(1) (2003) the statute of limitations for legal malpractice runs from the date of the act or omission and not from the date of discovery:

in actions aiieging professional negligence, malpractice or breach of contract for legal service by a licensed attorney, the statute of limitations starts to run from the date of the act or omission giving rise to the injury, not from the discovery of the malpractice, negligence, or breach of contract, except as provided in t h s section or as the statute of limitations may be suspended by other laws.

Pursuant to the final clause of section 753-B(1) the statute of limitations may be extended if there has been fraudulent concealment within the meaning of 14 M.R.S.A. 5 859 (2003). That section provides in pertinent part:

If a person, liable to any action mentioned, fraudulently conceals the cause thereof from the person entitled thereto, or if a fraud is committed w h c h entitles any person to an action, the action may be commenced at any time withn 6 years after the person entitled thereto discovers that he has just cause of action . . . .

In Brawn v. Oral Surgerv Associates, 2003 ME 11, 819 A.2d 1014, the Law Court held that a plaintiff seeking to invoke 14 M.R.S.A. § 859 must establish either that the defendant actually concealed material facts and that plaintiff relied on defendant's acts and statements or "that a special relationshp existed between the parties that imposed a duty to disclose the cause of action, and the failure of defendants to honor that duty." 2003 ME 11, ¶ 21, 819 A.2d at 1026 (quoting Harkness v. Fitz~erald,1997 ME 207, ¶ 6, 701 -A_,2c!370,372); _A_ lawyer-client relationship has been found to constitu-to the kind of special or fiduciary relatinnshp that imparts a duty to disclose. Anderson v. Neal, 428 A.2d 1189, 1192 (Me. 1981). Finally, the Law Court has noted that where a fiduciary relationshp exists and material facts are not disclosed, an inference of fraud can be drawn. Brawn, 2003 ME 11, ¶ 22,819 A.2d at 1026.

McCue argues that he cannot be found to have fraudulently concealed his alleged malpractice in not informing Hartstone of the Rule 41(b) order and in letbng CV-92-480 be dismissed with prejudice because, he contends, he had no reason to believe that Hartstone wished to pursue CV-98-480 after the request for an ex parte TRO had been denied. However, there is a disputed issue for trial as to whether McCue was informed prior to 1995 that Hartstone was attempting to preserve h s right to sue Fleet

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and Recoll regarding the 1992 foreclosure. See McCue Statement of Material Facts filed T2-L. -.-.-.,11, L CULUUL~ 1 7 9nnK

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McCue Affidavit, ¶ 8; Hartstone Affidavit, 9 7. Specifically, Hartstone contends that he ir-donned IvfcCue that he had preserved h s right to sue Fleet and Recoli at the time of a 1993 bankruptcy settlement. If McCue was aware of Hartstone's desire to seek further redress from Fleet and Recoll when CV-92-480 was dismissed with prejudice, his failure to notify Hartstone of the dismissal could constitute fraudulent concealment.

In reachng this result, the court agrees that sometlung more than mere nondisclosure by McCue must be found. If all Hartstone had to show was that McCue failed to notify h m of the January 12 notice and the February 3 dismissal, 14 M.R.S.A. 5 753-B tvould be h r n e d on its head ar,d fkLestakite of limitations for legal malpractice wou!c! rur, f r ~ mdiscovery. hTondisclosure may constitclte fraudulent concealment where a special relationshp exists but only where the nondisclosure in question was "for the purpose" of inducing reliance. See Glvnn v. Atlantic Seaboard Corp., 1999 ME 53 q[ 12, 729 A.2d 117,120.

In this case, construing all the facts in the light most favorable to Hartstone, he has proffered evidence w h c h could allow a fact finder to infer that McCue was aware that Hartstone was planning to seek further redress from Fleet and Recoll and did not inform Hartstone of the February 3, 1995 dismissal with prejudice in order to conceal h s malpractice in allowing CV-92-240 to be dismissed with prejudice without informing Hartstone of the court's January 12, 1995 notice or without talung other

action to protect Hartstone's interests.

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l n e entry shdi be:

Defendant's motion for summary judgment is denied. The parties shall confer and see if they can agree upon a proposed scheduling order with respect to the remaining issues in this case. If no agreement is reached by

September 1, 2005, the Clerk shall set a scheduling conference. The clerk is directed to incorporate h s order in the docket by reference pursuant to Rile 79(a).

Dated: August 11, 2005 .% 1 4 ~ ~ -

Thomas D. Warren

Justice, Superior Court

- COURTS nd County JX 287 ie 041 12-0287

WILLIAM MCKINLEY, ESQ.

PO BOX 9711

PORTLAND, ME 04104-5011

: COURTS ld County )x 287 e 041 12-0287

JOHN WHITMAN, ESQ.

PO BOX 9545

PORTLAND, ME 04112-9545