Glaze v. Larsen , 203 Ariz. 399 ( 2002 )

OPINION

FLOÉEZ, J.

¶ 1 Appellant James Glaze challenges the trial court’s order granting appellee Eric Larsen’s motion to dismiss Glaze’s complaint for legal malpractice on the ground that the complaint was barred by the statute of limitations. Larsen had represented Glaze in a criminal matter, both at trial and on appeal. Glaze contends that the statute of limitations on his legal malpractice action did not begin to run until the criminal proceeding was dismissed with prejudice. We agree and reverse.

¶ 2 Because this issue involves a question of law, we review the trial court’s ruling de novo. See Manterola v. Farmers Ins. Exch., 200 Ariz. 572, 30 P.3d 639 (App.2001). Additionally, we bear in mind that the use of the statute of limitations as a defense is not favored. Id.

¶ 3 The material facts are undisputed. Following a jury trial, Glaze, then a Pima County deputy sheriff, was convicted of sexually abusing another deputy sheriff during an off-duty visit to her home. Judge Donfeld suspended the imposition of sentence and placed Glaze on probation for one year. This court affirmed Glaze’s conviction and probationary term on appeal. State v. Glaze, No. 2 CA-CR 96-0145 (memorandum decision filed Jan. 14, 1997). Larsen represented Glaze on appeal. Represented by different counsel, Glaze later filed a petition for post-conviction relief pursuant to Rule 32, Ariz. R.Crim. P., 17 A.R.S., in which he alleged Larsen had been ineffective at trial. Judge Donfeld summarily dismissed the petition, denying relief. Although this court granted Glaze’s petition for review, we denied relief. State v. Glaze, No. 2 CA-CR 97-0400-PR (memorandum decision filed June 23, 1998). Three months later, however, we granted Glaze’s motion for reconsideration, concluding that Glaze had raised a colorable claim of ineffective assistance of counsel because Larsen had failed to request a jury instruction on lack of sexual motivation. We therefore vacated our memorandum decision and remanded the case to Judge Donfeld for an evidentiary hearing.

¶ 4 After the evidentiary hearing, Judge Donfeld granted Glaze a new trial, finding that Larsen had been ineffective in failing to request a jury instruction on lack of sexual motivation. Specifically, Judge Donfeld found that “the failure to request this jury instruction was an oversight on the part of [Larsen]” and “the failure to request the instruction was prejudicial to [Glaze’s] case.” Before the retrial was held, however, Glaze filed a motion to dismiss the charges with prejudice. Finding that the county attorney’s office “ha[d] no intention to refile this matter” and that “this matter was commenced almost four and one-half years ago and finality is appropriate under the circumstances,” Judge Donfeld granted Glaze’s motion on July 6,1999.

¶ 5 Glaze filed this lawsuit against Larsen in December 2000. Arguing that the complaint was barred by the two-year limitations period in A.R.S. § 12-542, Larsen moved to dismiss the complaint pursuant to Rule 12(b)(6), Ariz. R. Civ. P., 16 A.R.S., Pt. 1. The trial court concluded that the statute of limitations period had begun, at the very latest, on September 30, 1998, when this court filed its order finding that Glaze had raised a colorable claim for relief based on ineffective assistance of counsel.¹ Because we had filed our order two years before the date Glaze filed his complaint, the trial court dismissed the complaint. This appeal followed.

¶ 6 Glaze contends that the statute of limitations period on his claim did not begin until Judge Donfeld dismissed the criminal case with prejudice because, until that time, his “injury or damage [was] speculative, remote, or uncertain.” The requirement in § 12-542 that a tort action “shall be commenced and prosecuted within two years after the cause of action accrues” applies to legal malpractice actions. Kiley v. Jennings, Strouss & Salmon, 187 Ariz. 136, 927 P.2d 796 (App.1996). “A claim for legal malpractice accrues when: (1) the plaintiff knows or reasonably should know of the attorney’s negligent conduct; and (2) the plaintiffs damages are ascertainable, and not speculative or contingent.” Id. at 139, 927 P.2d at 799. Put another way, “it is only when the litigation is terminated and the client’s rights are ‘fixed’ that it can safely be said that the lawyer’s misdeeds resulted in injury to the client.” Amfac Distrib. Corp. v. Miller, 138 Ariz. 155, 157, 673 P.2d 795, 797 (App.) (Amfac I), aff'd, 138 Ariz. 152, 673 P.2d 792 (1983) (Amfac II).

¶ 7 As both parties note, the questions of when a plaintiff is deemed to know of his or her attorney’s negligence and when the plaintiffs damages are regarded as ascertainable in the context of a criminal proceeding are issues of first impression in Arizona. Thus, both parties rely on case law from other jurisdictions to support their positions.

¶ 8 Citing Silvers v. Brodeur, 682 N.E.2d 811 (Ind.Ct.App.1997), and Gebhardt v. O’Rourke, 444 Mich. 535, 510 N.W.2d 900 (1994), Larsen urges us to follow the approach taken by states that allow a cause of action for legal malpractice to accrue prior to the “final resolution of the underlying criminal case.” In Silvers, the plaintiff received a thirty-five-year sentence after his attorney advised him to plead guilty to murder and attempted murder. More than two years later, the plaintiff filed a complaint against his attorney with the State Bar of Indiana, alleging that counsel had negligently represented him. Approximately five years later, the plaintiff successfully petitioned for post-conviction relief based on ineffective assistance of counsel during the plea bargaining process. Following a trial, the plaintiff was convicted of criminal recklessness and released from custody because he had already served the maximum sentence. Approximately one year after his trial, the plaintiff sued his attorney for legal malpractice.

¶ 9 Affirming the trial court’s grant of summary judgment in favor of the attorney and recognizing its state public policy favoring the use of the statute of limitations as a defense, the Indiana Court of Appeals held that a criminal defendant must commence a legal malpractice action against his or her attorney within two years of discovering the malpractice, even if the criminal proceeding is ongoing. The court noted that delaying the accrual of the malpractice claim until the criminal proceeding has terminated does not further the state’s goals of prompt presentation of claims and notice to defendants.

¶ 10 Similarly, the Michigan Supreme Court in Gebhardt held that the plaintiffs cause of action for legal malpractice had accrued before the termination of the criminal case against her. There, a jury had convicted the plaintiff of abetting a rape. After the plaintiff dismissed her attorney, she moved for a new trial on the ground that her attorney had “failed ... to provide a substantial defense.” 510 N.W.2d at 901. Finding there was insufficient evidence that plaintiff had an abettor, the trial court entered a judgment of acquittal. More than two years after she filed her motion for a new trial, the plaintiff sued her attorney for legal malpractice. The trial court dismissed that lawsuit as untimely, reasoning that the plaintiff had known about her attorney’s malpractice when she terminated his services.

¶ 11 In affirming the trial court’s ruling, the Michigan Supreme Court explained that having a claim accrue prior to the termination of the criminal proceeding “affords the opposing party a fair opportunity to defend, relieves the court system from dealing with ‘stale’ claims, and protects potential defendants from protracted fear of litigation.” Id. at 905. And, in rejecting the concern that a plaintiffs damages would be uncertain until the termination of the criminal proceeding, that court stated that “harm is established not by the finality of the damages, but by the occurrence of identifiable and appreciable loss.” Id. at 904. The supreme court further noted that its approach was consistent with its statute providing that the limitations period for a legal malpractice action is two years from the last date the attorney represented the plaintiff or six months after the plaintiff discovers or should have discovered the malpractice.

¶ 12 Glaze urges us to reject these authorities and follow the approach of courts in states such as Alaska that hold that a cause of action for legal malpractice in the criminal context does not accrue until the criminal proceedings against the plaintiff are final and the plaintiff has been exonerated.² See Shaw v. State, 816 P.2d 1358 (Alaska 1991). Even though the plaintiff in Shaw sued his criminal defense attorney for legal malpractice approximately fifteen years after his conviction, the court held that his lawsuit was timely because he had filed it within two years of his exoneration. The Supreme Court of Alaska explained that tolling the limitations period until the criminal proceeding against the plaintiff has terminated and the plaintiff has been exonerated promotes judicial economy because many of the issues raised in the post-conviction proceeding will be raised in the legal malpractice action as well, and the doctrine of collateral estoppel prevents a plaintiff from relitigating frivolous issues. Additionally, the court noted, this approach provides a bright-line rule, recognizes that the merits of a claim on appeal or for post-conviction relief are uncertain until the claim has been decided, and decreases the likelihood that attorneys and clients will become adversaries during the criminal proceeding.

¶ 13 The approach Glaze advocates is more consistent with our rule requiring claims to be based on ascertainable damages, see Kiley, and with Arizona public policy. See Manterola (Arizona disfavors defense of statute of limitations). Indeed, as the court in Shaw explained, tolling the limitations period until the criminal proceeding has ended furthers the important goals mentioned in the preceding paragraph.³ Cf. Amfac I, 138 Ariz. at 158, 673 P.2d at 798 (“[njothing could be more destructive to the attorney-client relationship” than requiring a plaintiff to second-guess his or her attorney’s actions or seek out other legal opinions). Moreover, the usual prejudice to the defendant caused by delay is less of a concern in cases involving legal malpractice that occurs during the course of litigation because the malpractice is usually recorded in court documents or transcripts. Id. And, as Division One of this court explained in Amfac I, tolling the limitations period for a legal malpractice action in this context gives the plaintiff the “peace of mind to allow the legal process to work fully and finally in hopes that his position will ultimately be vindicated and [the plaintiff] will not be forced to disrupt his relationship with his lawyer to preserve what he thinks may be a valid malpractice claim.” 138 Ariz. at 159, 673 P.2d at 799.

¶ 14 At oral argument, however, Larsen urged us to follow Division One’s decision in Commercial Union Insurance Co. v. Lewis and Roca, 183 Ariz. 250, 902 P.2d 1354 (App. 1995). In that case, an insurance company received a negligently drafted opinion letter from its attorneys in 1982. Based on that letter, the insurance company denied coverage to its insured, a construction company, for negligent construction of some townhouses. In 1987, the insurance company learned of its attorneys’ negligence when the insured’s trustee in bankruptcy sued it for breach of contract and bad faith refusal to settle. Following its settlement with the trustee several years later, the insurance company sued its attorneys for legal malpractice. Although Division One ultimately concluded that the insurance company’s tolling agreement with its attorneys had preserved the timeliness of its cause of action, the court explained that the company’s malpractice claim had accrued when the trial court denied its motion for summary judgment in the bad faith action; at that point, the company knew or should have known that its attorneys’ negligent advice had caused it to incur legal fees in defending the bad faith action. Thus, the accrual date for its legal malpractice action was not deferred until it had finally determined the total amount of its damages in the bad faith action. But, because the legal malpractice alleged in Commercial Union did not occur during the course of litigation, the reasoning in that case does not affect the result here.

¶ 15 As the court in Commercial Union acknowledged, “the Amfac cases stand for the proposition that, in the context of litigation, attorney negligence is not actionable until the case in which the malpractice arose is finally resolved.” 183 Ariz. at 255, 902 P.2d at 1359. In civil cases, this is so because the harm to the party aggrieved by the legal malpractice is not certain, fixed, or irreversible upon the trial court’s entry of judgment. Amfac II. If the aggrieved party “is successful on appeal, his damages will be considerably lessened or possibly eliminated.” Id. at 154 n. 2, 673 P.2d at 794 n. 2. Likewise, in criminal cases, the harm to the aggrieved party is uncertain until the termination of criminal proceedings because the criminal defendant is not harmed by his or her attorney’s malpractice if the defendant is properly convicted after a new trial. See Day v. Zubel, 112 Nev. 972, 922 P.2d 536 (1996). Because the alleged legal malpractice here occurred during litigation, the Am-fac cases require us to find that Glaze’s malpractice claim did not accrue until the criminal proceedings against him were resolved.

¶ 16 Accordingly, we conclude that Glaze’s claim for legal malpractice accrued on the date Judge Donfeld dismissed the criminal charge against him with prejudice. See Day. Glaze’s damages were uncertain before that date because he could have been convicted after retrial even had the jury received an instruction on lack of sexual motivation. Because Glaze commenced his legal malpractice action within two years of the date his claim accrued, the trial court erred in granting Larsen’s motion to dismiss the complaint. See § 12-542.

¶ 17 The judgment is reversed, and the case is remanded for further proceedings consistent with this decision.

1 . Even if we agreed that our order finding that Glaze had stated a colorable claim for ineffective assistance of counsel triggered the statute of limitations, Division One of this court has previously explained that the date we issue the mandate in a case is the date that fixes the completion of the appellate process. See Joel Erik Thompson, Ltd. v. Holder, 192 Ariz. 348, 965 P.2d 82 (App.1998). Thus, because our mandate was issued October 28, 1998, Glaze’s filing the action in December 2000 still would have been untimely, even if the mandate had triggered the accrual of the malpractice claim.

2 . Other states that delay accrual of causes of action for legal malpractice during the pendency of criminal proceedings include Florida, Illinois, Kentucky, New York, Oregon, and Virginia. See Steele v. Kehoe, 747 So.2d 931 (Fla. 1999); Griffin v. Goldenhersh, 323 Ill.App.3d 398, 257 Ill.Dec. 52, 752 N.E.2d 1232 (2001); Stephens v. Deni-son, 64 S.W.3d 297 (Ky.Ct.App.2001); Britt v. Legal Aid Soc'y, Inc., 95 N.Y.2d 443, 718 N.Y.S.2d 264, 741 N.E.2d 109 (2000); Stevens v. Bispham, 316 Or. 221, 851 P.2d 556 (1993); Adkins v. Dixon, 253 Va. 275, 482 S.E.2d 797 (1997). Cf. Day v. Zubel, 112 Nev. 972, 922 P.2d 536 (1996) (statute of limitations period on plaintiff's federal civil rights cause of action based on public defender’s representation during criminal proceeding did not begin until plaintiff's criminal proceedings terminated).

3 . As previously stated, Larsen represented Glaze at trial and on appeal; different counsel represented Glaze throughout his post-conviction proceeding. The dissent states that the concern expressed in Amfac I and Amfac II, that the attorney-client relationship may be strained by a pending malpractice action, does not exist in this case. This is so, the dissent maintains, because Larsen’s representation of Glaze had ended before Glaze alleged that Larsen had been professionally negligent. Although the record reflects that Glaze’s petition for review and his appeal were not simultaneously pending, in other cases, frequently the appeal and the petition for review proceed simultaneously. And often, as in this case, a criminal defendant’s trial attorney also represents him or her on appeal. Thus, the dissent’s observation would not be true in many cases.