Legal Malpractice opinion in D.C. declines to follow exhaustion of appeals rule
The legal malpractice suit arose out of a claim under a long-term disability policy. The plaintiff's claim for LTD benefits was denied, and she then retained an attorney to represent her in seeking reconsideration. On May 14, 1999, the insurer rendered a final decision denying the claim. The attorney agreed to bring a lawsuit on the plaintiff's behalf. However, the lawsuit was not filed until May 10, 2002, almost three years later.
The insurer moved to dismiss the suit as time-barred by a policy provision specifying that any action to recover benefits had to be brought within two years from the end of the time within which proof of total disability was required. The trial court granted the motion to dismiss.
The plaintiff discharged the attorney and hired new counsel, who filed a motion for reconsideration. This motion was denied on Jan. 7, 2004, and there was no appeal.
Nearly three years later, on Jan. 5, 2007, the plaintiff filed a legal malpractice action against the defendant in D.C. Superior Court. The defendant attorney moved to dismiss the complaint as barred by the three year statute of limitations. The defendant argued that the limitations period began to run on July 29, 2003, when the court dismissed the plaintiff's suit against the insurer. The plaintiff argued that the statute of limitations did not begin to run until her motion for reconsideration was denied on Jan. 7, 2004.
The trial court granted the defendant's motion to dismiss.
On appeal, the D.C. Court of Appeals affirmed.
The Court reasoned that the plaintiff could have initiated a malpractice actioin against the attorney immediately after the contractual deadline was missed for commencing an action against the disability insurer. In cases where an attorney has missed a deadline for filing suit, the injury occurred when the client's action was legally subject to dismissal, rather than the actual, but fortuitous, date of dismissal.
D.C. does follow the continous representation rule, under which a client's legal malpractice claim does not accrue until the attorney's representation concerning the particular matter in inssue is terminated, even if the client knows before then that her attorney has made an injurious error. However, in this case, the plaintiff by August 2003 knew that the attorney had missed the contractual filing deadline, and she had replaced him with new counsel. This was more than three years before she filed suit.
The plaintiff argued that the statute of limitations on her legal malpractice claim was tolled while her timely Rule 59(e) motion was pending, because there was no final, appealable judgment until the court denied that motion. The D.C. Court of Appeals rejected that argument. In situations where an attorney's error results in a loss at trial, the Court has specifically declined to adopt an "exhaustion of appeals rule", pursuant to which the cause of action for malpractice would accrue only when the adverse judgment is affirmed on appeal.