McMillan v. Landoe, Brown, Planalp, Kommers & Johnstone, P.C.

No. 88-171
I N THE SUPREME COURT O F THE S T A T E O F MONTANA
1988
WARREN A. McMILLAN,
P l a i n t i f f and A p p e l l a n t ,
-vs-
LANDOE, BROWN, PLANALP, KOMMERS
AND JOHNSTONE, P.C., and GENE I . BROWN,
D e f e n d a n t s and R e s p o n d e n t s .
A P P E A L FROM: D i s t r i c t C o u r t of t h e E i g h t e e n t h J u d i c i a l D i s t r i c t ,
I n and f o r t h e C o u n t y of G a l l a t i n ,
T h e H o n o r a b l e D a l e C o x , Judge p r e s i d i n g .
COUNSEL O F RECORD:
For A p p e l l a n t :
B r u c e E. Lee, B i l l i n g s , Montana
For R e s p o n d e n t :
Worden, T h a n e & Haines; S a m M. Warren, M i s s o u l a ,
Montana
S u b m i t t e d on B r i e f s : July 14, 1988
Decided: S e p t e m b e r 1, 1 9 8 8
Filed: SEB1 1988
Clerk
Mr. Justice John Conway Harrison delivered the Opinion of the
Court.
The plaintiff, Warren A. McMillan, appeals the order of
the Eighteenth Judicial District Court, Gallatin County,
Montana, dismissing his action for legal malpractice against
the defendants. The case was submitted to the District Court
on a stipulation of facts and judgment was rendered in favor
of defendant's motion for summary judgment. We affirm the
judgment of the District Court.
The stipulated facts reveal the following:
On October 14, 1976, the plaintiff entered into a
contract for deed for the purchase of real property from
Hilda Peterson. The total purchase price was $130,000.
Hilda Peterson borrowed $26,000 from George Stublar on
October 21, 1977, to cure a delinquent debt. Stublar took a
mortgage on the property denominated in plaintiff's contract
for deed as security. When he had not received repayment
from Hilda Peterson by June 18, 1981, Stublar filed suit
charging her with nonpayment of the loan. The attorney for
Stublar in that action was Gene Brown, a partner in the law
firm of Landoe, Brown, Planalp, Kommers & ,Johnstone, P.C.
Both Brown and the law firm are named defendants in this
present action.
Brown obtained a judgment for Stublar on November 23,
1981 and immediately obtained a writ of execution from the
Gallatin County Clerk of Court against Hilda Peterson in the
amount of $38,993.86, including interest and costs. A
sheriff's sale was held on December 1, 1981, at which Hilda
Peterson's interest in the Peterson/McMillan contract for
deed was sold. McMillan, who still owed. Hilda Peterson
$98,802 on the contract, purchased it at the sheriff's sale
for $39,000.
In February, 1982, Hilda Peterson filed a declaratory
judgment action against McMillan and the Montana Bank of
Bozeman, N.A., the personal representative of Stublar's
estate. The District Court dismissed as res judicata Hilda
Peterson's attempt to set aside the earlier judgment and
sheriff's sale. On her appeal to this Court, we noted a lack
of an entry of default judgment on the Stublar claim, a lack
of actual notice to Hilda Peterson of the sheriff's sale, and
a discount of almost $60,000 on the contract. We reversed
the summary judgment against Hilda Peterson and instructed
the District Court to annul and vacate the sheriff's sale.
Peterson v. Montana Bank of Bozeman, N.A. (Mont. 1984), 687
P.2d 673, 681, 41 St.Rep. 1575, 1584.
McMillan asserts in the present case that attorney
Brown and the law firm "failed, through acts of commission
and omission, to exercise due care in prosecuting the
sheriff's sale and did not prosecute [the judgment] . . . in
a proper and skillful manner." McMillan further asserts that
he had a right to rely on attorney Brown's legal work, and
that reliance cost him the benefit of the bargain struck at
the sheriff's sale, interest on money borrowed to make the
sheriff's sale purchase, and legal fees. The District Court
granted summary judgment to attorney Brown and his law firm
reasoning that Brown owed no professional duty of skill and
care to one not a client and not intended as a primary
beneficiary. The court also ruled that the action was barred
by the three-year statute of limitations in S 27-2-206, MCA.
Although two issues are presented for our
consideration, we find the statute of limitations issue
controlling. Therefore, no discussion of the other issue is
necessary. The issue before us is:
Did the District Court properly rule that the
three-year limitation would. not be tolled any later than
March 8, 1982, when counsel for McMillan appeared to defend
against Hilda Peterson's complaint?
Section 27-2-206, MCA, sets a limitation for actions
sounding in professional negligence against attorneys:
An action against an attorney licensed to
practice law in Montana or a paralegal
assistant or a legal intern employed by
an attorney based upon the person's
alleged professional negligent act or for
error or omission in the person's
practice must be commenced within3 years
after the plaintiff discovers or through
- - -of reasonable dilisence should
the use d
have discovered - -the act, error, or
omission, whichever occurs last, but 5
no case may the action be commenced after
10 years from the date of the act, error,
or omission. (~mphasis added.)
In the present case, the District Court ruled that
McMillan's complaint, filed November 7, 1986, was barred by
the statute because McMillan's attorney appeared in court to
defend against Hilda Peterson's request for declaratory
relief on March 8, 1982, some four years and eight months
earlier. McMillan appeals, claiming the statute was tolled
until this Court decided Peterson, supra, on August 16, 1984,
two years and three months before he filed his complaint.
McMillan argues that he suffered no injury until this
Court decided Peterson, supra. Therefore, he asserts the
statute cannot begin to run before August 16, 1984. However,
Montana law is very clear and to the contrary. The statute
begins to run on the date the plaintiff learned the facts, or
through reasonable inquiry should have learned the facts, of
the attorney's alleged negligent acts. Schweitzer v. Estate
of Halko (Mont. 1988), 751 P.2d 1064, 1066-67, 45 St.Rep.
611, 614; Schneider v. Leaphart (Mont. 1987), 743 P.2d 613,
616, 44 St.Rep. 1699, 1702; Burgett v. Flaherty (1983), 204
Mont. 169, 173, 663 P.2d 332, 334. There is no provision
that the statute of limitations begins to run only after
discovery of plaintiff's damages. Schneider, 743 P.2d at
616.
The facts complained of now, and which are alleged to
be professional negligence, were known to McMillan and the
attorney who represented him against Hilda Peterson's action
on March 8, 1 9 8 2 . Those facts form the basis for his
professional negligence complaint against attorney Brown. As
such, McMillan had until March 8, 1 9 8 5 to file his cause of
action against attorney Brown and the law firm of Landoe,
Brown, Planalp, Kommers & Johnstone, P.C. He failed to do
this and his action is properly barred.
Affirmed.
We concur: /'
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