Pursuant to Ind. Appellate Rule 65(D), this
FILED
Memorandum Decision shall not be regarded as Oct 10 2012, 9:17 am
precedent or cited before any court except for the
purpose of establishing the defense of res judicata, CLERK
of the supreme court,
collateral estoppel, or the law of the case. court of appeals and
tax court
ATTORNEYS FOR APPELLANTS: ATTORNEYS FOR APPELLEE
JOHN C. ECKERT:
BRIANE M. HOUSE
PETER A. SCHROEDER STEVEN M. BADGER
Norris Choplin Schroder LLP JONATHON W. HUGHES
Indianapolis, Indiana Bose McKinney & Evans LLP
Indianapolis, Indiana
ATTORNEY FOR APPELLEES
WILMER E. GOERING, II, AND
ALCORN, GOERING & SAGE, LLP:
DEBORAH A. KAPITAN
Kopka, Pinkus, Dolin & Eads, LLC
Crown Point, Indiana
IN THE
COURT OF APPEALS OF INDIANA
GRANDVIEW MEMORIAL GARDENS, LLC, )
KEITH MEFFORD, BRITTAN MEFFORD, )
RICHARD EBLEN and SHERRY EBLEN, )
)
Appellants-Plaintiffs, )
)
vs. ) No. 49A02-1111-PL-992
)
JOHN C. ECKERT, WILMER E. GOERING, II, )
and ALCORN GOERING & SAGE, LLP, )
)
Appellees-Defendants. )
APPEAL FROM THE MARION SUPERIOR COURT
The Honorable Timothy W. Oakes, Judge
Cause No. 49D13-1010-PL-43102
October 10, 2012
MEMORANDUM DECISION - NOT FOR PUBLICATION
SHEPARD, Senior Judge
A former client sued several of his lawyers and their firms for conflict of interest
and malpractice in connection with his purchase of a cemetery. The trial court decided
that the statute of limitation had run before the complaint was filed. We conclude that the
court was right as to conflict claims about which the client was well aware long before
the filing. As for certain malpractice claims against a second lawyer and his firm, we
1
think that summary judgment was inappropriate.
FACTS AND PROCEDURAL HISTORY
Because this appeal focuses on whether the statute of limitation ran before the case
was filed, the details of who did what and said what, and when, must necessarily be laid
out in some detail.
In 2005, Keith Mefford, who sold pre-need funeral packages for a living, decided
to buy a cemetery in Madison, Indiana, known as Grandview Memorial Gardens. He
hired attorney John C. Eckert, who was then a partner with Eckert, Alcorn, Goering, and
Sage, to advise him in completing the transaction.
Keith formed Grandview Memorial Gardens LLC (“Grandview LLC”) with
Eckert’s assistance. The LLC’s members consisted of Keith, his wife Brittan, and his
wife’s parents Richard and Sherry Eblen. Eckert also assisted Keith in negotiations to
1
We held oral argument on August 28, 2012, in Indianapolis. We thank the parties for their helpful
presentations.
2
buy the cemetery, and the sale closed in July 2005. The cemetery maintained trust
accounts, and Keith gained access to the accounts when he took ownership, though the
accounts continued to be held in the name of the cemetery’s seller, Madison Funeral
Service (“MFS”).
In the months following the purchase, Keith had trouble obtaining payments from
the trust accounts and determined that they contained insufficient funds to meet the
cemetery’s needs. He also discovered that the cemetery had serious drainage problems
that caused water to accumulate in lawn crypts. Grandview LLC informed MFS that it
would cease making payments under the sale agreement until the problems were
remedied. When Keith mentioned these problems to Eckert, Eckert determined that
litigation might be necessary and referred Keith to his partner Wilmer Goering. On June
14, 2006, MFS sued Grandview LLC for failure to make payments under the sale
agreement. A few days later, Grandview LLC, by Goering and his firm, filed a breach of
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contract claim against MFS.
In July 2006, Keith held a public meeting at the cemetery to address the trust
account shortages and drainage problems. Following the meeting, some individuals
(including a few who had purchased plots or other pre-paid services) formed a group
called the Grandview Volunteers to resolve the cemetery’s problems.
Eckert thought that additional legal assistance might be required to address the
trust account issues, so on September 27, 2006, Eckert, Goering, Keith, and Richard
2
The results of these lawsuits have not been provided in the record.
3
Eblen met with Cohen & Malad lawyers Richard Shevitz and Vess Miller. Keith
discussed the problems he had discovered at the cemetery. After this discussion,
individuals who had purchased pre-paid services at the cemetery became aware of Cohen
& Malad’s involvement and hired that firm to investigate a lawsuit regarding shortages in
the cemetery’s trust accounts.
After Eckert ended his “of counsel” office sharing relationship with Alcorn
Goering & Sage, he entered into a similar arrangement with J. Anthony Goebel in
February 2007. Eckert discussed the drainage problems with Goebel, and upon Eckert’s
suggestion Goebel met with the Volunteers on March 17, 2007. The Volunteers
subsequently hired Goebel to investigate a lawsuit with respect to drainage issues.
Goebel determined that the case would be best pursued as a class action and asked
attorney Stephen Pitt of Wyatt Tarrant & Combs, LLP (“WTC”), to assist with those
aspects of the lawsuit.
3
On April 1, 2007, a fire at the cemetery destroyed its office building. Grandview
LLC filed a claim with its insurer. Keith consulted with Goering about the claim, and
Goering “agreed to handle the matter” in addition to representing Grandview LLC in the
other lawsuits. Appellants’ App. p. 321. When the insurer requested a sworn statement
from Keith, he consulted with Goering. Based on Goering’s advice, he declined to
provide a sworn statement.
3
The State later charged four men, including Keith’s father Gary Mefford, with setting the fire.
4
On April 13, 2007, Eckert hosted a meeting to discuss issues at the cemetery with
Keith, Goebel, Pitt, representatives of the Volunteers, and others. Keith was under the
impression that Goebel and Pitt were there to help Grandview LLC with the drainage
problems and with insurance coverage issues for the fire. Consequently, Keith discussed
the cemetery’s problems with Goebel and Pitt.
Next, on April 20, 2007, Cohen & Malad filed a class action lawsuit, identified by
the parties as the Means case, against Grandview LLC and others regarding the trust
account shortages. Eckert called Keith shortly before the lawsuit was filed to inform him
that Grandview LLC would be a defendant. Keith found the news a “shocking
development.” Id. at 87. Goering filed an appearance for Grandview LLC in the Means
case. Appellees Goering and AGS’s App. p. 132.
Subsequently, on August 17, 2007, Goebel filed a class action lawsuit on behalf of
the Volunteers against Grandview LLC and others regarding the cemetery’s drainage
problems (“the Leathermon case”). Goebel listed Eckert’s law firm name on the
complaint as counsel for the Volunteers, though Eckert did not sign the complaint.
Goebel called Keith to inform him that Grandview LLC was a defendant, and Keith was
“shock[ed] and surprise[d].” Appellants’ App. p. 100. Pitt later filed an appearance for
the Volunteers. Goering represented Grandview LLC in the Leathermon case “for a brief
time.” Appellees Goering and AGS’s App. p. 132.
Grandview LLC’s insurer hired Richard Mullineaux of Kightlinger & Gray to
represent Grandview LLC in Leathermon. Mullineaux concluded that Eckert, Goebel,
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and Pitt had a conflict of interest. He called Eckert on October 12, 2007, to demand that
Eckert and Goebel withdraw from the case. Eckert eventually did move to withdraw, but
not until October 2008. On April 24, 2009, Grandview LLC filed a motion to disqualify
4
Goebel, Pitt, and WTC, which the court granted on March 31, 2012.
On March 25, 2009, Goering contacted the cemetery’s insurer to ask about the fire
claim. The insurer, through its attorney, told Goering that it had notified Keith and
Richard Eblen in January 2008 that the claim would be denied unless they cooperated
with the claims process. Goering told Keith that the insurer had denied coverage for the
fire loss and that he “would look into it.” Appellants’ App. p. 321.
On October 1, 2010, the Meffords, the Eblens, and Grandview LLC (collectively,
“the Grandview clients”) sued just about all the lawyers and firms mentioned above,
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alleging legal malpractice, constructive fraud, and breach of fiduciary duty. The present
appeal stems from the trial court’s grant of summary judgment to Eckert, Goering and
AGS, and Goebel on statute of limitation grounds. The trial court determined that the
Grandview clients were aware of any conflict of interest “by mid 2007,” so the statute of
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limitation barred their claims against all defendants. Id. at 17.
4
The outcomes of the Means and Leathermon cases have not been included in the record.
5
Pitt, WTC, Shevitz, Miller, and Cohen & Malad were eventually dismissed from the suit.
6
After the trial court issued its judgment, the parties negotiated a release as to Goebel. Therefore, he is
not participating in this appeal. Appellants’ App. p. 3.
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ISSUE
The Grandview clients’ issue on appeal is thus: whether the trial court erred in
granting summary judgment to Eckert, Goering, and AGS.
DISCUSSION
Summary judgment is appropriate only where there is no genuine issue of material
fact and the moving party is entitled to a judgment as a matter of law. Ind. Trial Rule
56(C). As with a trial court, a reviewing court construes all factual inferences in favor of
the nonmoving party and resolves all doubts as to the existence of a material issue against
the moving party. Dreaded, Inc. v. St. Paul Guardian Ins. Co., 904 N.E.2d 1267 (Ind.
2009). An appellate court may affirm summary judgment if it is proper on any basis
shown in the record. Pfenning v. Lineman, 947 N.E.2d 392 (Ind. 2011).
Here, the Grandview clients acknowledged before the trial court that all of their
claims are subject to a two-year statute of limitation. Appellants’ App. p. 174 (citing Ind.
Code § 34-11-2-4 (1998)). The key issue is determining when the two-year period began
to run.
Statutes of limitation are enacted upon the presumption that one having a well-
founded claim will not delay in enforcing it. Shaum v. McClure, 902 N.E.2d 853 (Ind.
Ct. App. 2009), trans. denied. They are favored because they afford security against stale
claims. Id. The determination of when a cause of action accrues is a question for the
court. Doe v. United Methodist Church, 673 N.E.2d 839 (Ind. Ct. App. 1996), trans.
denied. Under Indiana’s discovery rule, a cause of action accrues, and the statute of
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limitation begins to run, when a claimant knows or in the exercise of ordinary diligence
should have known of the injury. Pflanz v. Foster, 888 N.E.2d 756 (Ind. 2008). For a
cause of action to accrue, it is not necessary that the full extent of damage be known or
even ascertainable, but only that some ascertainable damage has occurred. Doe, 673
N.E.2d at 842.
We address the Grandview clients’ claims against Eckert separately from those
against Goering and AGS.
I. ECKERT: WHEN SHOULD THE CLIENT HAVE KNOWN?
The Grandview clients argue that the statute began to run on their claims against
Eckert on October 2, 2008, when Eckert moved to withdraw his appearance on behalf of
the Volunteers in the Leathermon case, and that their complaint, filed on October 1, 2010,
was therefore timely. In response, Eckert says the Grandview clients were aware, or
should have been aware, of Eckert’s alleged malpractice no later than when attorney
Mullineaux informed them of Eckert’s conflict in October 2007.
We find guidance on this point in Estate of Spry v. Batey, 804 N.E.2d 250 (Ind. Ct.
App. 2004), trans. denied. In that case, the Estate of Kelly Spry retained attorney Batey
to represent it in connection with the one-car auto accident that claimed Spry’s life.
Batey, on behalf of the Estate, settled with the driver of the car, releasing the driver and
all other parties from liability. A subsequent administrator sued the tavern at which Spry
and the driver had been drinking on the night of the accident. The tavern argued that the
release barred any claims against it. The Estate’s attorneys in the tavern litigation
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informed Batey about the release dispute and advised her to contact her insurer. In
response, Batey gave the Estate her opinion as to why the release did not apply to the
tavern. A month later, a court granted the tavern’s motion for summary judgment based
on the release, a judgment upheld on appeal.
The Estate sued Batey for malpractice with respect to the release, to which Batey
responded that the statute of limitation barred the claim because the Estate was aware of
the claim when it sent her a letter advising her to contact her insurer. The Estate
responded that it was not aware of an injury until the tavern prevailed on summary
judgment. The trial court granted Batey’s motion for summary judgment. On appeal,
this Court concluded: (1) the Estate had been damaged by the release, not by the grant of
summary judgment to the tavern based on the release; and (2) the Estate was aware of the
alleged malpractice no later than when the Estate’s attorney warned Batey to contact her
insurer. Because the warning letter was sent more than two years before the Estate filed
its complaint, this Court affirmed the grant of summary judgment.
Here, Mullineaux informed the Grandview clients of Eckert’s conflict of interest
in October 2007, three years before they filed the complaint in this case. Just as in Spry,
the Grandview clients received direct advice from attorneys as to their other attorney’s
malpractice, and they knew or reasonably should have known that they might have a
claim against Eckert.
The Grandview clients contend that after the Means and Leathermon cases were
filed against Grandview LLC, Eckert spoke with Keith on both occasions and advised
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him not to worry about Grandview LLC’s status as a defendant because it was only for
form’s sake. They further contend that Eckert told Keith that he would look out for
Grandview LLC’s interests “on the inside.” Appellants’ App. p. 317. Finally, they note
Eckert told Keith to disregard Kightlinger & Gray’s view that Eckert had a conflict of
interest because, Eckert claimed, that firm was really representing Grandview LLC’s
insurer rather than the LLC itself. The Grandview clients say the statute should not have
begun to run in October 2007 because they did not know who to believe.
Having been made aware of Eckert’s conflict of interest by Mullineaux, it was not
reasonable for the Grandview clients to do nothing in the midst of competing advice. In
Spry, after the Estate told attorney Batey to contact her malpractice insurer, she wrote a
letter defending her conduct and contending that the claim against the tavern was still
valid. Attorney Batey’s attempt to defend her work did not delay the statute of limitation
or render the Estate unaware of its claim against her. Similarly, a reasonable person in
the current case would have acted against Eckert based on Kightlinger & Gray’s
identification of a conflict of interest or at least made an effort to determine which advice
7
was correct.
7
When Eckert moved into his new offices in February 2007, he told Keith that he purchased the building
from one of the owners of MFS, whom the Grandview clients were still suing. Eckert said that the
building was “a great bargain,” which caused Keith to conclude that Eckert “was dealing with [the LLC’s
adversary] for his own benefit, not the benefit of the LLC.” Appellants’ App. p. 332. It is unreasonable
for the Grandview clients to have spotted a possible conflict arising out of Eckert’s property transaction
but then fail to take any action when Mullineaux advised them of Eckert’s conflict in the Leathermon
case.
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Next, the Grandview clients assert that the statute of limitation was tolled by the
doctrine of continuous representation. As explained in Biomet v. Barnes & Thornburg,
791 N.E.2d 760, 765 (Ind. Ct. App. 2003), trans. denied, this doctrine applies “to delay
the commencement of the statute of limitations until the end of an attorney’s
representation of a client in the same matter in which the alleged malpractice occurred.”
In describing the basis for the rule, a panel of this Court said:
First, the continuous representation rule avoids disruption of the
attorney-client relationship and gives attorneys the chance to remedy
mistakes before being sued. At the same time, a client is not required to
constantly second-guess the attorney, and in some cases, be forced to obtain
other legal opinions regarding the attorney’s handling of the case.
Furthermore, a client may fully be aware that his attorney has erred to his
detriment and still be willing to place his confidence in the attorney’s
ability to correct the error. We see no compelling reason for interfering
with this fiduciary relationship.
Second, this rule does not limit the client’s ability to seek redress
immediately. The client may terminate the relationship without providing
the attorney an opportunity to mitigate the damages, and make a claim of
legal malpractice within two years of the date of termination. At the same
time, the rule prevents the client from having to adopt inherently different
litigation postures, thereby compromising the success of both proceedings,
by defending the attorney’s actions in the appeal of the underlying action in
which the alleged malpractice was committed and contesting the attorney’s
actions in the malpractice action. This rule further prevents an attorney
from defeating a malpractice claim by continuing representation until the
statute of limitations has expired.
Id. at 766-67 (citations and footnote omitted).
The facts before us do not line up favorably with these principles. After all,
Mullineaux actually told the Grandview clients about Eckert’s conflict, providing them
with sufficient information to investigate or take action. The Grandview clients were
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thus not forced to obtain another legal opinion or to second-guess Eckert because
Mullineaux provided them with the necessary information in the course of his
representation. Furthermore, application of the rule of continuous representation makes
little sense here because the harm caused by Eckert happened before Mullineaux
informed the Grandview clients about the conflict, and Eckert could not have corrected
his misconduct at that point. Finally, as the Biomet panel observed, clients remain free to
terminate the attorney-client relationship and seek redress at any time, so the Grandview
clients reasonably could have done so after being advised of Eckert’s conflict in October
2007.
We conclude that the doctrine of continuous representation does not toll the statute
of limitation here. The trial court did not err by granting summary judgment to Eckert
based on the statute of limitation.8
II. GOERING, AGS, AND THE INSURANCE CLAIM
The Grandview clients contend that there are disputes of material fact as to
whether Goering and AGS negligently mishandled their fire insurance claim. Goering
and AGS say that they are entitled to summary judgment on the fire insurance claim
because they did not represent the Grandview clients in that matter. They further argue
that the Grandview clients should have discovered any malpractice no later than January
2008, so the complaint was tardy.
8
Finally, the Grandview clients assert that Eckert’s misconduct was “egregious” and against public
policy, which should discourage deception and conflicts of interest between attorneys and clients.
Appellants’ Br. p. 21. There is a countervailing policy at work here, of course, that parties should pursue
claims in a timely manner.
12
The elements of legal malpractice are as follows: “(1) employment of an attorney,
which creates a duty to the client; (2) failure of the attorney to exercise ordinary skill and
knowledge (breach of the duty); and (3) that such negligence was the proximate cause of
(4) damage to the plaintiff.” In re Estate of Lee, 954 N.E.2d 1042, 1046 (Ind. Ct. App.
2011), trans. denied.
Here, after a fire destroyed the cemetery’s office building in April 2007, Keith
discussed his insurance claim with Goering. Goering “agreed to handle the matter,” and
Keith provided him with information. Appellants’ App. p. 321.
Subsequently, the insurer demanded that Keith provide a sworn statement, and
Keith sought Goering’s advice. Keith declined to provide a sworn statement “based on
[his] conversation with Goering.” Id. Keith believed that Goering was in charge of the
matter and that any communications from the insurer were being directed to Goering. In
March 2009, Goering wrote to the insurer’s counsel, stating that “we would like to get the
insurance claim resolved as soon as possible” and that he was willing to schedule an
examination. Appellees Goering and AGS’s App. p. 99. One could reasonably infer
from these facts that: (1) Goering and AGS were employed by the Grandview clients to
represent them with respect to the insurance claim; and (2) the representation continued
through at least March 2009, within two years of the filing of the complaint. See Matter
of Anonymous, 655 N.E.2d 67, 70-71 (Ind. 1995) (determining that an implied attorney-
client relationship was formed where attorney and client met on several occasions and
discussed a wrongful-termination lawsuit).
13
Goering and AGS contend that Keith addressed the fire insurance loss without
their assistance and that Keith was aware of any malpractice no later than January 2008,
when the insurance company denied the claim. This is a request to view the evidence in a
light most favorable to the movant.
We conclude that the statute of limitation does not bar the Grandview clients’
claim against Goering and AGS for negligently handling the fire insurance claim and that
there is a dispute of material fact as to whether the Grandview clients and Goering and
AGS had an attorney-client relationship with respect to that matter. We reverse the trial
court’s grant of summary judgment to Goering and AGS.
CONCLUSION
For the reasons stated above, we affirm the trial court’s grant of summary
judgment to Eckert and reverse it as to Goering and AGS.
Affirmed in part, reversed in part, and remanded.
BRADFORD, J., and BROWN, J., concur.
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