Channel, et al. v. Loyacono, et al.


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Docket Number: 2005-CA-01395-SCT

Supreme Court: Opinion Link
Opinion Date: 04-19-2007
Opinion Author: COBB, P.J.
Holding: Affirmed in part; Reversed and Remanded in part

Additional Case Information: Topic: Legal malpractice - Statute of limitations - Fraudulent concealment - Res judicata - Waiver - Estoppel - Accord and satisfaction
Judge(s) Concurring: SMITH, C.J., WALLER, P.J., DIAZ, EASLEY, CARLSON, GRAVES, DICKINSON AND RANDOLPH, JJ.
Procedural History: Dismissal
Nature of the Case: CIVIL - LEGAL MALPRACTICE

Trial Court: Date of Trial Judgment: 01-25-2005
Appealed from: Hinds County Circuit Court
Judge: W. Swan Yerger
Disposition: Dismissed Appellant's case with prejudice
Case Number: 251-04-3-CIV

  Party Name: Attorney Name:  
Appellant: SARENTHIA CHANNEL; PEGGY CRIST; THERESA EDWARDS; PATRICIA GUTHRIE; JANE HAMILTON; HELEN HEARD; ALICE MCCRAVEN; BERTHA MIXON; JENNIE PARKER; JAMES REED, JR.; GLENDA RIVERS; MOLLY ROBINSON; PAMELA ROBINSON; KAREN THORNTON; VIRGINIA TOWNSEND; VERA WELLS; MARY WHITTINGTON; LINDA WILLIAMS; AND PEGGY WINTERS




RONALD W. LEWIS DAVID G. HILL DAVID MINYARD



 

Appellee: PAUL KELLY LOYACONO AND E. SCOTT VERHINE GLENN GATES TAYLOR CHRISTY MICHELLE SPARKS  

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Topic: Legal malpractice - Statute of limitations - Fraudulent concealment - Res judicata - Waiver - Estoppel - Accord and satisfaction

Summary of the Facts: Various clients of attorneys Paul Kelly Loyacono and E. Scott Verhine filed a suit against the attorneys asserting for legal malpractice, negligence, and conspiracy in connection with the settlement agreements. Loyacono and Verhine filed their Motion to Dismiss, or, Alternatively, for Summary Judgment on the grounds that, both as a matter of law and undisputed fact, that the clients’ claims were barred by the statute of limitations, res judicata, collateral estoppel, waiver and estoppel, accord and satisfaction, and settlement and release. The court granted the motion, and the clients appeal.

Summary of Opinion Analysis: Issue 1: Statute of limitations The plaintiffs argue that in Mississippi, the rule for an attorney malpractice case is that the statute of limitations does not begin to run against the clients’ claims until the representation regarding the transaction at issue is complete, and that the representation concerning their settlements would not have been complete until the clients received the settlement funds, bringing the action within the three-year statute of limitations. The statute of limitations in a legal malpractice action properly begins to run on the date the client learns or through the exercise of reasonable diligence should learn of the negligence of his lawyer. The plaintiffs claim that they relied on the judgment, loyalty, integrity, truthfulness, and competence of Loyacono and Verhine in handling the claims and that because Loyacono and Verhine misled them, they had insufficient information to know of the alleged wrongdoing at the time Loyacono and Verhine supposedly committed malpractice. However, they contradict themselves by stating that several of the plaintiffs contacted another attorney. This shows that some of the plaintiffs not only had sufficient information to know of an alleged wrongdoing, but that they actually suspected wrongdoing and sought the advice of another lawyer. For these plaintiffs, their claims would be barred by the statute of limitations. However, this may not be the case with all of the plaintiffs. If there are any plaintiffs who did not have notice of the alleged wrongdoing of Loyacono and Verhine, then the claims of those plaintiffs would not be barred by the statute of limitations. Therefore, this issue must be tried on remand. Issue 2: Fraudulent concealment The plaintiffs argue that the statute of limitations was tolled in this case because Loyacono and Verhine fraudulently concealed their negligence. The party purporting that there was fraudulent concealment must show that some affirmative act or conduct was done and prevented discovery of a claim, and due diligence was performed on their part to discover it. The plaintiffs offer no evidence to back up this bare assertion. While they do make allegations of fraudulent and negligent acts committed by Loyacono and Verhine, the plaintiffs make no offering of any affirmative act designed to conceal a cause of action. Issue 3: Res judicata The trial court held that the plaintiffs’ claims against Loyacono and Verhine were barred by res judicata. While this cause of action did arise out of the same body of operative fact as the motions filed in the previous cases, a finding that the identity of the cause of action is met in this case for the purposes of res judicata would not be in keeping with the purpose for the res judicata doctrine. In filing the malpractice action against Loyacono and Verhine, the plaintiffs did not split a claim. Rather, the malpractice action was separate and distinct from the original claims filed by Loyacono and Verhine for the plaintiffs. If the plaintiffs had filed a case against Loyacono and Verhine alleging negligence, and, after the conclusion of that case, filed a second action against Loyacono and Verhine alleging fraud, the second action could be properly barred by the doctrine of res judicata or claim preclusion. However, this is an original action alleging legal malpractice. In addition, this is a distinct action, not previously litigated to a final determination, and the claims of the plaintiffs are not barred by collateral estoppel. Issue 4: Waiver The trial court found that the plaintiffs’ claims were barred by doctrines of waiver and estoppel. Waiver is voluntary surrender or relinquishment of some known right, benefit or advantage; estoppel is the inhibition to assert it. In order to establish that a claim is barred by estoppel, three essential elements must be proven: a representation that later proves to be untrue, an action by the person seeking to invoke the doctrine, such action being taken in reliance on the representation, and a resulting detriment to that person arising from his action. There are no facts stated to show, and there are no specific allegations asserting that Loyacono and Verhine suffered any detriment by negotiating the settlement agreements on behalf of the plaintiffs. On the contrary, Loyacono and Verhine were paid a fee and actually prospered from the negotiations and settlements. Therefore, the plaintiffs’ claims were not barred by estoppel. In addition, the plaintiffs did not waive any right to sue for malpractice simply because they accepted the settlement funds. Issue 5: Accord and satisfaction The court found that the plaintiffs’ claims were barred by accord and satisfaction and settlement and release. Under Mississippi law, there are four elements of accord and satisfaction: something of value offered in full satisfaction of a demand; accompanied by acts and declarations as amount to a condition that if the thing is accepted, it is accepted in satisfaction; the party offered the thing of value is bound to understand that if he takes it, he takes subject to such conditions; and the party actually does accept the item. The plaintiffs did not demand anything of Loyacono and Verhine except reasonable care in legal service. The settlements did not release Loyacono and Verhine from liability and future claims. Furthermore, Loyacono and Verhine provided nothing of value to the plaintiffs. Therefore, accord and satisfaction does not bar the plaintiffs’ claims.


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