McOwen v. Zena , 2012 Ohio 4568 ( 2012 )

[Cite as McOwen v. Zena, 2012-Ohio-4568.]
STATE OF OHIO, MAHONING COUNTY
IN THE COURT OF APPEALS
SEVENTH DISTRICT
BARBARA McOWEN, )
) CASE NO. 11 MA 58
PLAINTIFF-APPELLANT, )
)
- VS - ) OPINION
)
THOMAS E. ZENA, )
)
DEFENDANT-APPELLEE. )
CHARACTER OF PROCEEDINGS: Civil Appeal from Common Pleas
Court, Case No. 09 CV 3019.
JUDGMENT: Reversed and Remanded.
APPEARANCES:
For Plaintiff-Appellant: Attorney Stephen Hanudel
326 North Court Street
Medina, OH 44256
For Defendant-Appellee: Attorney Douglas Taylor
11492 Youngstown-Pittsburgh Rd.
New Middletown, OH 44442
Attorney John Juhasz
7081 West Blvd., Suite 4
Youngstown, OH 44512
JUDGES:
Hon. Mary DeGenaro
Hon. Cheryl L. Waite
Hon. Joseph J. Vukovich
Dated: September 27, 2012
[Cite as McOwen v. Zena, 2012-Ohio-4568.]
DeGenaro, J.
{¶1} Plaintiff-Appellant, Barbara McOwen, appeals the February 10, 2011
decision of the Mahoning County Court of Common Pleas granting Defendant-Appellee's,
Thomas E. Zena, motion to dismiss her legal malpractice complaint. On appeal, McOwen
argues that the trial court erred in its determination of the termination date of the attorney-
client relationship and the date of the cognizable event. She alleges that she timely filed
her complaint for legal malpractice within the one-year statute of limitations.
{¶2} McOwen's arguments are meritorious. Construing the evidence in
McOwen's favor, she has pled facts sufficient to survive dismissal pursuant to Civ.R.
12(B)(6). She alleged she filed her complaint within one year of the unequivocal
termination of the attorney-client relationship on August 11, 2008 and/or within one year
of the cognizable event, namely, learning on August 13, 2008 that her case had been
dismissed, either of which results in the malpractice suit having been timely filed.
Accordingly, the judgment of the trial court is reversed and the case remanded for further
proceedings.
Facts and Procedural History
{¶3} McOwen contracted with Dragan Milentijevic, a general contractor, for the
construction of her home. When she became dissatisfied with Milentijevic’s work, she
retained Zena in October 2003 to represent her regarding claims against Milentijevic. On
August 10, 2009, McOwen filed a complaint for legal malpractice against Zena, which was
amended with leave of court on December 30, 2009. The following facts are taken from
the complaint and amended complaint:
{¶4} On February 10, 2004, Zena filed suit against Milentijevic on behalf of
appellant for $200,000 in compensatory damages and $150,000 in punitive damages.
Milentijevic filed a counterclaim and served a request for production of documents; Zena
failed to respond to both. McOwen regularly consulted Zena on the status of her case
and he assured her it was proceeding properly. On March 7, 2005, Milentijevic filed a
motion for default judgment on his counterclaim in an amount exceeding $315,000. On
that same date, he also filed a motion for sanctions to prohibit McOwen from introducing
evidence. Zena failed to respond to either motion, and on June 23, 2005, the trial court
entered default judgment on the counterclaim and granted the motion for sanctions.
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{¶5} McOwen was served with Milentijevic's motion for default judgment. Upon
receiving this motion, she asked Zena about it; he told her not to worry and that the
motion would be "easily disposed of."
{¶6} On June 23, 2005, Zena filed a voluntary dismissal of McOwen's case
pursuant to Civ.R. 41(A) without her consent or knowledge. Zena never informed
McOwen of the dismissal. For the next three years, McOwen regularly consulted with
Zena on the status of her case, and he repeatedly told her that her case was proceeding
properly and was still active. According to McOwen, Zena told her about "specific court
hearings, dates, depositions, continuances, and other related items that never existed."
{¶7} Around spring or summer 2008, McOwen became dissatisfied with the lack
of progress in her case. On July 25, 2008, McOwen sent a letter informing Zena that she
intended to dismiss him as her attorney and requested her file be available for pick up on
July 31, 2008. On that date, McOwen went to Zena's office but was told her file was not
available.
{¶8} On August 4, 2008, Zena filed a complaint on McOwen's behalf against
Adam & Eve Plumbing & Drain, Inc., a subcontractor who worked under Milentijevic on
the construction of McOwen's home. Zena filed this complaint without McOwen’s consent
and without consulting her.
{¶9} On August 11, 2008, McOwen wrote another letter to Zena, this time
informing him of her decision to dismiss him as her attorney and requesting that her file
be available for pickup. On August 13, 2008, McOwen learned that Zena had dismissed
her case against Milentijevic in June 2005. On August 14, 2008, McOwen obtained her
file from Zena's office.
{¶10} In her complaint and amended complaint, McOwen alleged that Zena's
negligent misconduct breached the standard of care he owed her as her attorney. She
claimed that as a direct and proximate result of this breach, she lost the opportunity to
recover $200,000 from Milentijevic and a default judgment in excess of $315,000 was
awarded against her. McOwen requested judgment against Zena for an amount in
excess of $500,000 plus pre- and post-judgment interest, costs, attorney fees, and any
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further relief she may be entitled to in law or equity.
{¶11} On December 16, 2009, Zena, with leave of court, filed a motion to dismiss
the action pursuant to Civ.R. 12(B)(6) for failure to state a claim upon which relief can be
granted. He argued that McOwen's complaint was barred by the statute of limitations and
should be dismissed. McOwen opposed Zena's motion to dismiss on December 28,
2009. On January 5, 2010, Zena filed a reply to McOwen's response in opposition to his
motion to dismiss. On January 19, 2010, McOwen filed a response to Zena's reply.
{¶12} On August 5, 2010, the magistrate issued a decision sustaining Zena's
motion to dismiss the complaint and amended complaint. The magistrate found that a
cause of action for legal malpractice must be brought within one year after the cause of
action accrues. The cause of action begins accruing upon either the termination of the
attorney-client relationship or when the client discovered or should have discovered the
injury, whichever date is later. The magistrate further found that McOwen discovered or
should have discovered the alleged injury long before she terminated her attorney-client
relationship with Zena on July 25, 2008. The magistrate concluded that the cause of
action accrued on July 25, 2008 and McOwen filed her complaint on August 10, 2009,
outside of the one-year statute of limitations. The magistrate did not state the date
McOwen discovered or should have discovered her injury.
{¶13} On August 17, 2010, McOwen filed objections to the magistrate's decision.
On September 27, 2010, Zena, with leave of the court, filed a reply to McOwen's
objections, and on October 12, 2010, McOwen filed a sur-reply. On February 10, 2011,
the trial court issued a judgment entry overruling McOwen's objections and adopting the
magistrate's decision, thereby sustaining Zena's motion to dismiss the complaint and
amended complaint.
Legal Malpractice – Statute of Limitations
{¶14} McOwen asserts two assignments of error on appeal. Because these
arguments are interrelated, they will be addressed together:
{¶15} "The trial court erred when it found that the attorney-client relationship
terminated on July 25, 2008."
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{¶16} "The trial court erred when it found that Appellant should have known about
her injury before she terminated the attorney-client relationship."
{¶17} "A motion to dismiss based upon a statute of limitations may be granted
when the complaint shows conclusively on its face that the action is time-barred." Doe v.
Archdiocese of Cincinnati, 109 Ohio St. 3d 491, 2006-Ohio-2625, 849 N.E.2d 268, ¶ 11.
An appellate court reviews a trial court's decision to dismiss a case pursuant to Civ.R.
12(B)(6) de novo. Perrysburg Twp. v. Rossford, 103 Ohio St. 3d 79, 2004-Ohio-4362, 814
N.E.2d 44, ¶ 5. In conducting the de novo review, this court must presume all factual
allegations contained in the complaint to be true and make all reasonable inferences in
favor of the nonmoving party. Mitchell v. Lawson Milk Co., 40 Ohio St. 3d 190, 192, 532
N.E.2d 753 (1988).
{¶18} R.C. 2305.11(A) provides that an action for legal malpractice "shall be
commenced within one year after the cause of action accrued * * *." The Ohio Supreme
Court has instructed courts to identify two dates to determine when the action accrues
and the statute of limitations begins to run:
[W]hen there is a cognizable event whereby the client discovers or should
have discovered that his injury was related to his attorney's act or non-act
and the client is put on notice of a need to pursue his possible remedies
against the attorney or when the attorney-client relationship for that
particular transaction or undertaking terminates, whichever occurs later.
Zimmie v. Calfee, Halter and Griswold, 43 Ohio St. 3d 54, 538 N.E.2d 398
(1989), at syllabus, applying Omni-Food & Fashion, Inc. v. Smith, 38 Ohio
St.3d 385, 528 N.E.2d 941 (1988).
{¶19} McOwen first contends that the trial court erred when it determined that the
date the attorney-client relationship terminated was July 25, 2008.
{¶20} "Generally, the attorney-client relationship is consensual, subject to
termination by acts of either party." Ruckman v. Zacks Law Group LLC, 10th Dist. No.
07AP-723, 2008-Ohio-1108, ¶ 18, quoting Columbus Credit Co. v. Evans, 82 Ohio App.3d
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798, 804, 613 N.E.2d 671 (10th Dist. 1992). "Conduct which dissolves the essential
mutual confidence between attorney and client signals the termination of the attorney-
client relationship, an explicit statement terminating the relationship is not necessary."
Harman v. Wise, 7th Dist. No. 00 CA 50, 2001-Ohio-3489. A letter stating that the
representation has terminated can be an affirmative act that terminates the relationship.
Savage v. Kucharski, 11th Dist. No. 2005-L-141, 2006-Ohio-5165, ¶ 23.
{¶21} McOwen specifically claims that although she wrote Zena a letter on July
25, 2008 expressing her intent to terminate the attorney-client relationship, this letter did
not end the attorney-client relationship because Zena subsequently filed a complaint on
her behalf against Adam & Eve, a subcontractor who worked for Milentijevic in
constructing her home. She alleges that Zena's representation of her was not a general
practice relationship and that he represented her regarding the construction of her home;
therefore, Zena filing the complaint against the subcontractor extended the attorney-client
relationship. McOwen claims that this relationship did not terminate until she sent the
second letter to Zena on August 11, 2008.
{¶22} Construing the facts alleged in the complaint in the light most favorable to
McOwen as we are required to do so by Civ.R. 12(B)(6), the July 25, 2008 letter was not
an unequivocal termination of the attorney-client relationship contemplated by Ohio case
law. Rather, it was expressing McOwen's intent to do so, putting Zena on notice of
McOwen’s dissatisfaction with his representation, and affording him the opportunity to
cure that dissatisfaction. This is born out by Zena's act of filing a complaint against Adam
& Eve.
{¶23} The Second District found that an attorney's communications with his client
were not the termination date for statute of limitations purposes because they did not
show "an unequivocal intent" to terminate the relationship:
We agree with the trial court that McKinney's communications to Daniel * * *
do not show an unequivocal intent to terminate the attorney-client
relationship. At most, they indicate that McKinney had concluded that the
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contemplated appeal to the Supreme Court of Ohio was insupportable, so
that he could not, consistently with the standards of professional conduct,
file an appeal. But the communications also show that McKinney was
continuing to represent Daniel with respect to the proceedings in the trial
court, which were ongoing, despite the fact that the decree of divorce had
become final. For example, McKinney, in his letter of March 16, 2006,
discusses strategy for the show-cause hearing scheduled for April 14, and
also undertakes to inquire concerning possible settlement, should Daniel
wish him to do so. This is inconsistent with a termination of McKinney's
representation with respect to the divorce. Daniel v. McKinney, 181 Ohio
App.3d 1, 2009-Ohio-690, 907 N.E.2d 787, ¶ 47.
{¶24} However, for Civ.R. 12(B)(6) purposes, as pled in the complaint, McOwen’s
August 11, 2008 letter did inform Zena of her unequivocal decision “to dismiss him as her
attorney”. Other Ohio courts have found that similar letters between clients and attorneys
have signaled the end of the attorney-client relationship. See Duvall v. Manning, 11th
Dist. No. 2010–L–069, 2011-Ohio-2587, ¶ 11, 29 (letter from attorney to client stating “I
am terminating this relationship effective immediately” constituted termination of
relationship); Cook v. Caruso, 6th Dist. No. L-05-1208, 2006-Ohio-1982, ¶ 9, 28 (letter
informing attorney that client decided to retain other counsel and was terminating the
attorney’s services effective immediately was an unequivocal termination of the
relationship). Here, the “essential mutual confidence between attorney and client” was
dissolved by the August 11, 2008 letter. Harman at *3. Construing the allegations in the
complaint in the light most favorable to McOwen, the August 11, 2008 letter was the
unequivocal termination of the attorney-client relationship for statute of limitations
purposes, sufficient to survive Civ.R. 12(B)(6) dismissal.
{¶25} McOwen alternatively argues that the trial court erred in finding that she
discovered or should have discovered her injury long before she terminated the attorney-
client relationship.
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{¶26} This court has previously explained the concept of a "cognizable event"
within the statute of limitations for legal malpractice:
A "cognizable event" is an event that puts a reasonable person on notice
that "a questionable legal practice may have occurred." Cook v. Caruso,
6th Dist. No. L-05-1208, 2006-Ohio-1982, ¶ 14, citing Zimmie, 43 Ohio
St.3d 54. However, an injured person does not need to "be aware of the
full extent of the injury before there is a cognizable event." Cook, 2006-
Ohio-1982 at ¶ 14, citing Zimmie, 43 Ohio St. 3d 54. Rather, it is enough
that some noteworthy event, i.e. the cognizable event, has occurred which
does or should have alerted a reasonable person that his attorney may
have committed legal malpractice. Cook, 2006-Ohio-1982 at ¶ 4, citing
Zimmie, 43 Ohio St. 3d 54. "Knowledge of a potential problem starts the
statute to run, even when one does not know all the details." Halliwell v.
Bruner (Dec. 14, 2000), 8th Dist. Nos. 76933, 77487. Lincoln Gen. Ins. Co.
v. Pipino, 7th Dist. No. 06 MA 125, 2007-Ohio-5046, ¶ 21.
{¶27} McOwen first claims that she was not actually injured until June 23, 2006,
one year after Zena filed the Civ.R. 41(A) voluntary dismissal of her lawsuit. She thus
contends that any event before that date cannot be considered as a cognizable event.
However, "[t]he Ohio Supreme Court has never held that a party must be aware or suffer
the full extent of his injury before there is a cognizable event triggering the statute of
limitations in a legal malpractice action." Griggs v. Bookwalter, 2d Dist. No. 21220, 2006-
Ohio-5392, ¶ 20. McOwen alleged in her complaint that she was injured by the default
judgment entered against her on June 23, 2005. The complaint also alleges that Zena
negligently failed to respond to Milentijevic's pleadings during the course of litigation.
While McOwen may not have suffered the full extent of her injury until June 23, 2006, this
does not preclude a finding of a cognizable event before that date.
{¶28} Zena claims that McOwen's receipt of the motion for default judgment was a
cognizable event that should have put her on notice of the wrong. McOwen argues that
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the motion did not put her on notice of questionable legal practices because of Zena's
representations to her. Specifically, that she regularly consulted with Zena regarding the
status of her case and that he misrepresented to her that the case was proceeding
properly. She notes that she received a copy of Milentijevic's default judgment motion in
March 2005 and when she contacted Zena, he told her not to worry about this motion.
Thus, she alleges that Zena's misrepresentation should toll the statute of limitations
based on equitable estoppel.
{¶29} To determine whether McOwen should have been put on notice, we use an
objective standard to evaluate whether McOwen should have discovered the alleged
malpractice in the exercise of reasonable diligence. "Reasonable diligence thus entails
some effort by the client to dispel his confusion, doubt, or suspicion." Woodrow v.
Heintschel, 194 Ohio App. 3d 391, 2011-Ohio-1840, 956 N.E.2d 855, ¶ 41 (6th Dist.).
{¶30} Based on the allegations in the complaint, McOwen had no reason to
suspect any questionable legal practices after receiving the motion for default judgment.
Upon receipt of the motion, McOwen alleges that she did consult with Zena and he
assured her that he would take care of the motion. This was a reasonable effort to
address her concern regarding the default judgment motion, especially considering her
allegations that Zena told her about court hearings and depositions scheduled after that
date. Thus, McOwen's reliance on Zena's representations was reasonable, and she had
no other reason to suspect any wrongdoing.
{¶31} As the procedural posture of this appeal is the dismissal via Civ.R. 12(B)(6),
we must make all reasonable inferences in McOwen's favor. Given the allegations in
McOwen’s amended complaint, she did not have any reason to know of the default
judgment; it alleges that Zena never informed McOwen that default judgment was
entered, that he voluntarily dismissed her case and failed to refile, and that he
misrepresented the status of her case for the next three years. He also refused to hand
over her file as requested. Taking these allegations as true, one could conclude that no
cognizable event occurred during this time to put McOwen on notice of the alleged
malpractice.
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{¶32} McOwen claims that she became dissatisfied with the lack of progress in
her case around spring or summer 2008. Courts have considered a client's
dissatisfaction with his or her attorney in determining whether a cognizable event
occurred. See, e.g., Griggs at ¶ 22. Here, Zena told McOwen that her case was
proceeding properly, specifically telling her about court hearings, depositions, and
continuances. Thus, it was reasonable that McOwen would not have known that the lack
of progress was related to Zena's malpractice.
{¶33} Construing the allegations in the complaint in her favor, the earliest date that
McOwen should have been aware of her injury was August 13, 2008, when she alleges
that she learned her case had been dismissed by Zena. Because McOwen filed her
complaint on August 10, 2009, less than one year later, the trial court erred in dismissing
her complaint as barred by the statute of limitations.
{¶34} In sum, McOwen's arguments are meritorious. The trial court erred in its
determination of the date the attorney-client relationship terminated and the date of the
cognizable event. Construing the evidence in McOwen's favor, she pled facts sufficient to
survive dismissal that she terminated the attorney-client relationship on August 11, 2008
and that the cognizable event occurred on August 13, 2008, when she learned that her
case had been dismissed. Because McOwen filed her malpractice action within one year
of the last triggering event, the legal malpractice complaint is timely on its face.
Accordingly, the judgment of the trial court is reversed and the case remanded for further
proceedings.
Waite, P.J., concurs.
Vukovich, J., concurs.