Joseph W. Frederick v. Kay L. Wallerich

• Court: Court of Appeals of Minnesota
• Decided: August 1, 2016
• Docket: A15-2052
• Status: Unpublished

Opinion

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2014).

STATE OF MINNESOTA IN COURT OF APPEALS A15-2052

Joseph W. Frederick, Appellant,

vs.

Kay L. Wallerich, et al., Respondents.

Filed August 1, 2016 Affirmed Smith, John, Judge ∗

Blue Earth County District Court File No. 07-CV-15-2151

Patrick H. O’Neill, Jr., Paula Duggan Vraa, Andrew Hart, Larson King, LLP, St. Paul, Minnesota (for appellant)

Kay Nord Hunt, Barry A. O’Neil, Bryan R. Feldhaus, Lommen Abdo, P.A., Minneapolis, Minnesota (for respondents)

Considered and decided by Larkin, Presiding Judge; Schellhas, Judge; and Smith,

John, Judge.

∗ Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10. UNPUBLISHED OPINION

SMITH, JOHN, Judge

We affirm the district court’s order granting respondents’ motion to dismiss

appellant Joseph W. Frederick’s legal-malpractice claims as barred by the six-year statute

of limitations because the district court did not err in determining that respondent attorney

and her law firm did not commit separate acts of malpractice from 2007 through 2011,

which would have tolled the limitations period. We further affirm because Frederick’s

claims do not involve separate negligent acts and he did not set forth sufficient facts to

establish that respondents concealed the cause of action.

FACTS

On September 28, 2006, Frederick and his fiancé Cynthia Gatliff met with

respondent-attorney Kay L. Wallerich at respondent Farrish Johnson Law Office

(collectively, Farrish Johnson) in Mankato to execute an antenuptial agreement. Frederick

and Gatliff each signed the agreement, but the signature spaces designated for two

witnesses were left blank. The following day, Frederick and Gatliff married. Farrish

Johnson continued to advise and represent Frederick from 2007 through 2011. In

September 2007, under Frederick’s direction, Farrish Johnson drafted him a new will. In

2008, Gatliff signed a consent and waiver acknowledging the enforceability of the

antenuptial agreement. In 2010 and 2011, Frederick executed two codicils to his will,

amending the disposition of his real and personal property.

In January 2013, Gatliff (then known as Cynthia Frederick) filed for divorce.

During discovery, Wallerich learned that the antenuptial agreement was invalid because it

2 lacked the statutorily required witness signatures. See Minn. Stat. § 519.11, subd. 2 (2014)

(providing that an antenuptial agreement shall be in writing, executed in the presence of

two witnesses, acknowledged by the parties, and entered into and executed prior to

marriage).

On May 26, 2015, Frederick sued Farrish Johnson for legal malpractice, breach of

fiduciary duty, negligent and reckless misrepresentation, and equitable tolling based on

fraud. After filing its answer, Farrish Johnson filed a motion for judgment on the pleadings,

arguing that the first four counts were time-barred by the six-year statute of limitations

governing legal-malpractice actions. See Minn. Stat. § 541.05, subd. 1(5) (2014).

Challenging count four, Farrish Johnson also asserted that there was no legal basis for

equitably tolling the limitations period. Along with its memorandum in support of its

motion, Farrish Johnson included several documents, including the dissolution judgment,

a stipulation and order following appellate mediation, and a letter from Frederick’s counsel

documenting his intent to proceed with the complaint served in September 2013.

Frederick opposed Farrish Johnson’s motion for judgment on the pleadings and

moved to amend his complaint to include a gross-negligence claim and to assert new facts

relating to Wallerich’s lack of knowledge concerning the statutory requirements of

antenuptial agreements. Frederick also moved to add a claim for punitive damages under

Minn. Stat. § 549.191 (2014), but later withdrew this request.

After a hearing, the district court granted Farrish Johnson’s motion for judgment on

the pleadings under Minn. R. Civ. P. 12.03. Relying on the supreme court’s opinion in

Antone v. Mirviss, the district court determined that all of Frederick’s claims are barred by

3 the six-year limitations period because Frederick’s cause of action accrued and the

limitations period began to run on the date of his marriage to Gatliff. 720 N.W.2d 331

(Minn. 2006). Further, it concluded Frederick’s claims all arose from the single incident

of the negligently unwitnessed signing of the antenuptial agreement. In a following order,

the district court denied Frederick’s motion to amend his complaint, stating that he failed

to present any new facts or demonstrate evidence of independent negligent acts.

DECISION

I. The district court did not err by granting judgment on the pleadings on statute- of-limitations grounds.

On review of a Minn. R. Civ. P. 12.03 motion for judgment on the pleadings, we

review the judgment “de novo and determine only whether the complaint sets forth a

legally sufficient claim for relief.” Williams v. Bd. of Regents of Univ. of Minnesota, 763

N.W.2d 646, 651 (Minn. App. 2009) (quotation omitted). On appeal from judgment on the

pleadings, we focus on the allegations in the pleadings. Minn. R. Civ. P. 12.03. We accept

the factual allegations in the complaint as true and we liberally construe the complaint and

draw all inferences and assumptions in favor of the nonmoving party. Hoffman v. N. States

Power Co., 764 N.W.2d 34, 45 (Minn. 2009). We may consider documents and statements

that are incorporated by reference into the pleadings. See Martens v. Minn. Mining & Mfg.

Co., 616 N.W.2d 732, 739 n.7 (Minn. 2000).

Under Minnesota law, the statute of limitations begins to run when the cause of

action accrues, which is “when the plaintiff can allege sufficient facts to survive a motion

to dismiss for failure to state a claim upon which relief can be granted.” Antone, 720

4 N.W.2d at 335. Minnesota also follows the damage-accrual rule, where a “cause of action

accrues when ‘some’ damage has occurred as a result of the alleged malpractice.” Id. at

335-36 (quotation omitted); Veit v. ProSource Technologies, Inc., 879 N.W.2d 8, 10 (Minn.

App. 2016). “‘Some damage’ is defined broadly, and the cause of action accrues on the

occurrence of any compensable damage, whether specifically identified in the complaint

or not.” Veit, 879 N.W.2d at 10.

Frederick argues that Farrish Johnson committed separate acts of legal malpractice

from 2007 through 2011, thereby extending the limitations period. Frederick principally

relies on Devereaux v. Stroup, an unpublished case from this court to support his argument.

No. A07-0103, 2008 WL 73712 (Minn. App. Jan. 8, 2008). Unpublished opinions of the

court of appeals are not precedential, and, at best, can be of persuasive value. See Minn.

Stat. § 480A.08, subd. 3(c) (2014).

Devereaux involved a married couple who sued an attorney for legal malpractice

arising from two separate negligent acts occurring in 1997 and 2002. 2008 WL 73712 at

*1. On appeal, we held that the attorney committed separate and distinct acts of negligence

because the 1997 incident concerned allegedly bad advice that exposed the couple to civil

and criminal liability for conversion and theft. Id. at *3. But in 2002, the attorney’s

negligence not only worsened the couple’s position, but also aggravated the attorney’s

original negligence and increased the couple’s liability. Id. We held that the 1997

negligence claim was time-barred, but that the claim arising from the attorney’s 2002

negligent conduct was timely under Minn. Stat. § 541.05. Id. at *4.

5 Here, Frederick’s claim is factually distinguishable from Devereaux in two key

ways. First, after Frederick’s marriage in 2006, his successive interactions with Farrish

Johnson from 2007–2011 did not significantly worsen or enhance his losses in a way

similar to what the married couple in Devereaux experienced. Second, Farrish Johnson’s

alleged misconduct from 2006–2011 is limited to improper advice concerning the validity

of the antenuptial agreement. But the attorney in Devereaux engaged in wide-ranging and

distinct forms of misconduct in 2002 (improper advice, litigation-provoking delay tactics,

misrepresentations, and omissions) after only giving improper advice in 1997.

Here, following the legal reasoning in Herrmann v. McMenomy & Severson and

Antone, we conclude that Frederick’s claims are time-barred. 590 N.W.2d 641 (Minn.

1999). In Herrmann, a law firm gave a client negligent advice in 1986, which the owner

relied upon to engage in prohibited business transactions beginning the following year. Id.

at 642. The supreme court refused to consider the client’s continued business transactions

as causes of action or to allow his claims to proceed for damages incurred in later years.

Id. at 643-44. Following Herrmann, Antone involved a set of similar facts to the instant

case: a client who sued his attorney for legal malpractice because the attorney drafted an

invalid and unenforceable antenuptial agreement, which the client did not discover until

after he filed for divorce twelve years after the marriage. 720 N.W.2d at 333. The supreme

court held that the client’s cause of action accrued and the statute of limitations began to

run on the day that he married his ex-wife because on that day he lost his nonmarital-

property protections. Id. at 337-38. It declined to toll the limitations period so that the

client could start the clock on the date that he knew the full extent of his loss. Id. at 336.

6 Here, Frederick’s legal-malpractice claim would have survived a motion to dismiss

on the day that he married Gatliff because that was the moment when he no longer enjoyed

nonmarital protections to his property. Hence, when Frederick filed his legal-malpractice

claim nine years later, it was time-barred.

We conclude that the limitations period also applies to Frederick’s remaining claims

because they are within the penumbra of his legal-malpractice action. In Antone, the

supreme court collectively disposed of the client’s remaining breach-of-fiduciary-duty and

breach-of-contract claims under the limitations period when it dismissed his legal-

malpractice claim. Id. at 338. We do the same here. Frederick’s breach-of-fiduciary-duty

and negligent-misrepresentation claims allege the same elements in his complaint and are

alternate forms of pleading a legal-malpractice claim. See Padco, Inc. v. Kinney & Lange,

444 N.W.2d 889, 891 (Minn. App. 1989) (noting in a legal-malpractice claim, that a

breach-of-fiduciary-duty claim includes the same elements as a negligence claim).

Furthermore, both Frederick’s negligent-misrepresentation and reckless-misrepresentation

claims are akin to a legal-malpractice claim in that they center on the duty of care owed to

him by Farrish Johnson in their attorney-client relationship. See Florenzano v. Olson, 387

N.W.2d 168, 177-78 (Minn. 1986) (Simonett, J., concurring specially) (noting that

negligent and reckless misrepresentation “both judge the representer’s state of mind by an

objective standard of due care,” and reckless representation is wholly distinct from a claim

of intentional misrepresentation, which requires the representer to have the “intent to

deceive”).

7 II. The district court did not err in denying Frederick’s “claim” of equitable tolling on the grounds of fraudulent concealment.

Fraudulent concealment is an equitable doctrine, and we generally review a district

court’s decision whether to grant equitable relief for an abuse of discretion. Minn.

Laborers Health & Welfare Fund v. Granite Re, Inc., 844 N.W.2d 509, 513 (Minn. 2014).

Under Minnesota law, the limitations period can be tolled “when the plaintiff can

demonstrate that the defendant engaged in fraudulent concealment” of material facts that

would lead to the discovery of the plaintiff’s cause of action. Lamere v. St. Jude Med.,

Inc., 827 N.W.2d 782, 788 (Minn. App. 2013). There is not a clear definition of what

constitutes “fraudulent concealment.” See Wild v. Rarig, 302 Minn. 419, 450, 234 N.W.2d

775, 795 (1975) “[T]he threshold necessary to trigger equitable tolling is very high, lest the

exceptions swallow the rule.” Sanchez v. State, 816 N.W.2d 550, 562 fn.10 (Minn. 2012)

(quotation omitted) (addressing equitable tolling of postconviction statutes).

Fraudulent concealment occurs in an attorney-client relationship when “there was

an affirmative act or statement which concealed a potential cause of action, that the

statement was known to be false * * *, and that the concealment could not have been

discovered by reasonable diligence.” Williamson v. Prasciunas, 661 N.W.2d 645, 650

(Minn. App. 2003) (citing Herrmann, 590 N.W.2d at 641; Haberle v. Buchwald, 480

N.W.2d 351, 357 (Minn. App. 1992), review denied (Minn. Aug. 4, 1992)). In other words,

to establish fraudulent concealment, Frederick must show that: (1) Farrish Johnson made a

statement or statements that concealed Frederick’s cause of action; (2) the statement or

8 statements were intentionally false; and (3) the concealment could not have been

discovered by reasonable diligence. See Haberle, 480 N.W.2d at 357.

Here, the record demonstrates that Frederick has not set forth sufficient facts to

establish that Farrish Johnson concealed his cause of action. There is no evidence that

Farrish Johnson fraudulently concealed Frederick’s legal-malpractice claim to prevent him

from bringing it at an earlier date. See Hydra-Mac, Inc. v. Onan Corp., 450 N.W.2d 913,

919 (Minn. 1990) (holding that a claim of fraudulent concealment requires the party to

show that the cause of action was actually concealed). Frederick had a copy of the

antenuptial agreement in 2006, and it was clear on its face that the agreement lacked the

requisite witnesses’ signatures. Additionally, Frederick did not plead that Wallerich made

intentionally false statements concerning the validity and enforceability of the antenuptial

agreement; rather, he pleaded that Farrish Johnson “failed to use reasonable care or

competence” in obtaining the information or communicating it to him, which is more akin

to a negligence action. See Williamson, 661 N.W.2d at 651-52 (stating that in order to

prove fraudulent concealment, appellant must demonstrate that statements were

intentionally false). The district court properly denied tolling of the limitations period.

III. The district court did not abuse its discretion by denying Frederick’s motion to amend the complaint.

Minn. R. Civ. P. 15.01 authorizes the district court to liberally grant leave to amend

pleadings “when justice so requires.” “Generally, the decision to permit or deny

amendments to pleadings is within the discretion of the district court and will not be

reversed absent a clear abuse of discretion.” Johns v. Harborage I, Ltd., 664 N.W.2d 291,

9 295 (Minn. 2003). Amendments to pleadings may be denied if it will accomplish nothing.

Envall v. Ind. Sch. Dist. No. 704, 399 N.W.2d 593, 597 (Minn. App. 1987), review denied

(Minn. Mar. 25, 1987).

The district court did not abuse its discretion in denying Frederick’s motion to

amend. The fact that his financial losses became ascertainable upon his divorce is

immaterial because the limitations period began to run on the day he suffered some

damage, which was the day he married. See Veit, 879 N.W.2d at 10. Further, because

Frederick’s gross-negligence claim arose from the same set of events as his other claims,

it is similarly time-barred.

Affirmed.