Walter A. Farris v. William S. Todd

IN THE COURT OF APPEALS OF TENNESSEE
AT KNOXVILLE
WALTER A. FARRIS, ET AL. v. WILLIAM S. TODD, ET AL.
Direct Appeal from the Circuit Court for Sullivan County
No. C 32494 (L) William H. Inman, Senior Judge, Sitting by Designation
No. E1999-1574-COA-R3-CV - Decided May 3, 2000
This appeal involves the question of whether the Appellants, Walter and Gordon Farris, complied
with the statute of limitations when filing their complaint for legal malpractice and conversion. The
Appellees, William S. Todd and Thomas S. Dossett, filed a motion to dismiss the complaint because
it was barred by the applicable statute of limitations. Appellants moved to amend their complaint
to include declaratory judgment relief for determination of the ownership rights of the parties in a
particular art work. The Circuit Court for Sullivan County granted the motion to dismiss the
complaint and denied the motion to amend. We affirm in part and vacate in part the Circuit Court’s
judgment.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed in Part;
Vacated in Part and Remanded
GODDARD , P.J., delivered the opinion of the court, in which SUSANO and SWINEY , JJ, joined.
Larry C. Vaughan, Knoxville, Tennessee and Emmitt F. Yeary, Abingdon, Virginia, for the
appellants, Walter A. Farris and Gordon Farris
Thomas L. Kilday and Thomas J. Garland, Jr., Greeneville, Tennessee, for the appellees, William
S. Todd and Thomas D. Dossett
OPINION
JUDGE GODDARD delivered the opinion of the court.
This is an appeal from the Circuit Court’s dismissal of the Plaintiffs’ complaint because it
was barred by the applicable statute of limitations. Walter and Gordon Farris, Plaintiffs-Appellants,
raise the following issues, which we restate:
I. Whether the Trial Court erred in granting the motion to dismiss?
II. Whether the Trial Court erred in denying Plaintiffs’ motion to amend?
Over a period of 25 years, William S. Todd and Thomas D. Dossett represented Walter Farris
in various legal matters. Walter Farris signed an “Acknowledgment of Fee” document in 1970 and
1977. In the 1970 “Acknowledgment of Fee” document, Walter Farris agreed that Todd and
Dossett’s legal fees would be 25% of the value of the items recovered by their legal representation.
In the 1977 “Acknowledgment of Fee” document, Walter Farris reaffirmed the legal fees owed to
Todd and Dossett for various representation. In 1983 and 1987, Walter Farris assigned and sold a
total of 50% interest in the “Duke of Mantua” painting to Todd and Dossett. On June 27, 1997,
Walter Farris, Gordon Farris, William S. Todd and Thomas D. Dossett entered into an agreement.
The agreement distributed certain works of art among the parties, except for the “Duke of Mantua”
painting, and purported to be a “complete and final settlement of all matters between the parties.”
The agreement stated that each party owned 25% of the “Duke of Mantua” painting, but Mr. Todd
would have the exclusive right and authority to sell the “Duke of Mantua” painting pursuant to
irrevocable powers of attorney executed by the other parties simultaneously with the agreement.
On June 2, 1998, Walter and Gordon Farris filed a complaint against William Todd and
Thomas Dossett alleging legal malpractice, breach of contract, fraud, outrageous conduct, and willful
and intentional conversion of properties owned by the Plaintiffs. On July 8, 1998, Todd and Dossett
filed a motion to dismiss for failure to comply with the applicable one-year statute of limitations and
failure to state a claim upon which relief may be granted. During oral argument on the motion to
dismiss, Plaintiffs’ counsel moved to amend the complaint to seek declaratory judgment relief as to
the ownership of the art works referred to in the complaint. The Circuit Court denied the Plaintiffs’
motion to amend the complaint and granted Defendants’ motion to dismiss for failure to comply with
the one-year statute of limitations.
Our standard of review on a motion to dismiss is de novo without a presumption of
correctness because our inquiry is purely a question of law. Carvell v. Bottoms, 900 S.W.2d 23, 26
(Tenn. 1995). In considering a Rule 12.02(6) motion to dismiss, we are required to take the
allegations of the complaint as true, and to construe the allegations liberally in favor of the plaintiff.
Pemberton v. American Distilled Spirits Co., 664 S.W.2d 690, 691 (Tenn. 1984). A complaint
should be dismissed for failure to state a claim if it appears beyond doubt that the plaintiff can prove
no set of facts in support of the claim that would entitle the plaintiff to relief. Pemberton, 664
S.W.2d at 691.
The applicable statute of limitations for legal malpractice is one year, whether the action is
based in contracts or torts. See Tenn. Code Ann. § 28-3-104(a)(2) (1999). The claims of outrageous
conduct and fraud are included within the one year statute of limitations. Walter and Gordon Farris
argue that their complaint was filed within one year from the date of the June 27, 1997 agreement
between the parties. According to the Appellants, the 1997 agreement was the culmination of all the
alleged acts of legal malpractice by the Appellees. However, the complaint refers to acts of legal
malpractice which occurred prior to the 1997 agreement. During oral argument, Appellants’ counsel
conceded that the Appellants could allege no acts of legal malpractice within one year prior to the
filing of the complaint. Essentially, the Appellants allege a continuing tort violation for a period of
over 25 years.
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In legal malpractice actions, the statute of limitations period is governed by the discovery
rule. There are two elements of the legal malpractice discovery rule: (1) the plaintiff must suffer an
actual injury resulting from the defendant’s negligence and (2) the plaintiff must have known or
should have known that the injury was caused by the defendant’s negligence. See Carvell v.
Bottoms, 900 S.W.2d 23, 28 (Tenn. 1995). As previously noted, the professional relationship
between Walter Farris, William Todd and Thomas Dossett began more than 30 years ago. Walter
Farris signed many documents and relinquished physical possession of many works of art, including
the “Duke of Mantua” painting, many years prior to filing a complaint. There was actual injury
suffered, but if the injury was the result of the Appellees’ negligence, Walter Farris knew or should
have known more than one year prior to filing the complaint. The claim for legal malpractice is
barred by the one year statute of limitations.
Walter and Gordon Farris argue for the first time on appeal that their complaint alleged
conversion of personal property for which a three year statute of limitations applies. See Tenn. Code
Ann. § 28-3-105(2) (1999). The lower court did not address whether the complaint stated a claim
for conversion or whether the conversion claim was barred by the statute of limitations. It is
well-settled that issues not raised at trial may not be raised for the first time on appeal. Simpson v.
Frontier Community Credit Union, 810 S.W.2d 147, 153 (Tenn. 1991); Chadwell v. Knox County,
Tennessee, 980 S.W.2d 378, 384 (Tenn. Ct. App.1998).
The second issue raised by the Appellants is whether the trial court erred in denying their
motion to amend the complaint. The Appellants moved to amend the complaint to include a
declaratory judgment relief for determination of the ownership rights of the parties in certain art
works, particularly the “Duke of Mantua” painting. As a matter of course, parties are allowed to
amend their pleadings once at any time prior to a responsive pleading being served. See Tenn. R.
Civ. P. 15.01. The lower court stated that most of the complaint would be irrelevant and immaterial
with respect to a declaratory judgment action to determine the respective ownership rights of the
parties. The Court stated it would be best for the Appellants to file a new complaint seeking
declaratory judgment relief. We find that the Circuit Court abused its discretion in disallowing the
Appellants’ amendment. By allowing the amendment, the Circuit Court can determine the
ownership rights of the parties without the filing of a new complaint.
For the foregoing reasons the judgment of the Circuit Court is affirmed in part, vacated in
part and the cause remanded for further proceedings in accordance with this opinion. Costs of this
appeal are adjudged half against Walter and Gordon Farris and their surety and half against William
Todd and Thomas Dossett.
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