In cases turning on questions of state law, a ruling from the South Carolina Supreme Court is typically the final word—unless the court later decides that it should have said things a little differently. That happened May 25, when the court published a substitute opinion extending further grace to litigants suing their attorneys for malpractice.
The court held that the statute of limitations in legal malpractice cases should remain tolled until the appellate courts finally resolve the underlying case in which the alleged malpractice occurred. The new rule provides a brighter line than the one offered in the court’s previous decision, which had held that the statute of limitations would be tolled while an appeal was pending, unless the client knew about harm earlier.
The case-within-the-case that started the rumpus involved a car dealership in Manning that was sued for allegedly hawking a lemon. The dealership lost at a 2006 trial and then lost its appeal in 2010. Shortly after the appeal was denied, the dealership sued attorney Scott Robinson and the firm Johnson McKenzie & Robinson, also of Manning, for malpractice, claiming that they failed to adequately prepare and try the case.
The lawyers denied the allegations and argued that the claim was barred anyway by the statute of limitations. Clarendon County Circuit Judge George James agreed, citing the state Supreme Court’s 2005 decision in Epstein v. Brown, which set the jury’s verdict as the starting point for the three-year window in which to file suit.
Epstein had been often criticized since it was handed down, and in its original decision last September, the Supreme Court overruled it by a 3-2 vote. The substitute opinion was a 5-0 decision, still canning Epstein, but for slightly different reasoning.
Justice Donald Beatty, who wrote both the original opinion and the substitute one, noted that a successful claim for legal malpractice requires proof that the client suffered actual damages as a result. That means that knowing that an attorney has made a hash of the case isn’t necessarily the same thing as a client knowing that he has a viable claim for malpractice on his hands.
“Consequently, until the appeal is resolved against the client, there is no legally cognizable cause of action for an attorney’s alleged malpractice,” Beatty wrote. “Upon resolution of the appeal, a cause of action for legal malpractice accrues triggering the statute of limitations.”
The court once again declined to adopt the continuous-representation rule, which permits the statute of limitations to be tolled during the period an attorney continues to represent the client on the same matter out of which the alleged legal malpractice arose, and is used in most states. The court said the rule was problematic because of potential scenarios where it might be unclear exactly when the representation had ended.
This time, the court’s opinion brought onside justices Jean Toal and John Kittredge, who had dissented from the original opinion. Toal’s dissent marked a shift in her position, since she had been one of the dissenters in Epstein, but the substitute opinion returns her to the camp she occupied in Epstein. (Chief Justice Costa Pleicones concurred separately in the decision.)
Andrew Epting and Michelle Endemann of Charleston represented the plaintiff car dealership, Stokes-Craven Holding Corp. Epting said that the new decision was substantially more favorable for his client. He praised the court’s amended ruling, saying that the types of cases that trigger malpractice lawsuits are frequently complicated and thus often overturned on appeal.
“What the Supreme Court, I think, is saying is, why are we going to start a statute of limitations in the malpractice case at a time when we may well reverse the underlying case? And that’s pretty logical,” Epting said. “It’s very, very hard to find any public policy reason why that doesn’t make sense or a legal reason why that doesn’t make sense.”
Susan Taylor Wall and Hal Frampton of McNair Law Firm in Charleston and Warren Powell of Bruner Powell Wall & Mullins in Columbia represented Robinson and Johnson McKenzie & Robinson. The attorneys did not reply to a voicemail message seeking comment.
The decision is flavored with at least a bit of irony—the rule that the statute of limitations can start running as soon as the appeal reaches a final resolution, handed down in a case where the court’s original decision turned out not to be so final after all.
The 19-page decision is Stokes-Craven Holding Corp. v. Robinson (Lawyers Weekly No. 010-045-16). The full text of the opinion is available online at sclawyersweekly.com.
Follow David Donovan on Twitter @SCLWDonovan