On certification to the Superior Court, Appellate Division.
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
ALBIN, J., writing for a unanimous Court.
In this legal malpractice case, the Court determines when plaintiffs' cause of action accrued and whether their complaint was timely filed.
In February 1986, plaintiff Anthony Vastano suffered injuries when his automobile was involved in an accident with a commercial truck. He and his wife Geraldine, retained defendant, Gary Algeier, Esq., who filed a negligence action against the truck's owners. The case was subsequently bifurcated for separate trials on liability and damages. In the damages trial, which concluded on November 13, 1989, a jury awarded $41,400 in total to the plaintiffs (including the per quod claim). On February 5, 1990, the trial court granted plaintiffs' motion for a new trial on damages based on defense counsel's allegedly improper issuance of a subpoena and use of Anthony Vasano's medical records. On January 30, 1991, the Appellate Division reversed the trial court's grant of a new trial and reinstated the damages award.
On December 23, 1996, plaintiffs, represented by another attorney, filed a civil complaint against Algeier asserting two theories of legal malpractice. The first theory was based on Algeier's failure to have provided certain discovery, which led to the exclusion of plaintiff's economic expert's testimony at trial - affecting the amount of damages awarded the plaintiffs. The second theory was based on Algeier's failure to have informed the plaintiffs that an earlier settlement offer that had been rejected before trial had been renewed during the course of the jury's deliberations. That offer was substantially higher than the amount the jury ultimately awarded. Plaintiffs learned of the renewed offer sometime after the Appellate Division reinstated the damages award on January 30, 1991, when their new attorney found a reference to it in a footnote in the truck owners' appellate brief.
Algeier moved for summary judgment on the ground that plaintiffs did not file the malpractice action within the statute of limitations, the lawsuit having been filed more than six years after the jury rendered its verdict on damages (November 13, 1989) and more than six years after plaintiffs took possession of their file containing the brief that mentioned the renewed settlement offer (November 15, 1990). The trial court granted summary judgment in favor of Algeier, reasoning that a cause of action for legal malpractice accrues when the client suffers actual damages and discovers or should reasonably discover the facts supporting the claim. In respect of Algeier's discovery failures and derelict trial performance, the trial court held that the statute of limitations began to run on the return of the unsatisfactory damages award, and that in respect of the uncommunicated settlement offer, it began to run when plaintiffs took possession of their file from Algeier. In an unpublished opinion, the Appellate Division affirmed.
The Supreme Court granted plaintiffs' petition for certification.
HELD: Plaintiffs' complaint alleging legal malpractice, which was filed more than six years after they discovered, or through the use of reasonable diligence should have discovered facts essential to the claim, was barred by the statute of limitations.
1. The statute of limitations in a legal malpractice case does not commence until the client suffers actual damage and discovers, or through the use of reasonable diligence should discover, facts essential to the malpractice claim. (pp. 8-9)
2. As a matter of policy, delaying the accrual date of a malpractice action until completion of the appellate process would frustrate the goals of ensuring fairness to defendants and stimulating the diligent prosecution of claims before they grow stale. (pp. 9-10)
3. Even if Algeier's failings were not evident during trial (because some of the court's rulings were made at sidebar), by November 15, 1990, through the exercise of reasonable diligence, plaintiffs knew or should have known of the consequences of Algeier's failure to supply discovery and that his professional errors were a likely cause of the insufficient damages verdict. Plaintiffs had six years from that date to file their claim. The filing of their claim on December 23, 1996, was beyond the six year limitations period. (pp. 10-13)
4. The trial court's grant of a new trial did not effectively wipe the slate clean and extinguish any damages plaintiffs suffered. Nor were their damages speculative until the Appellate Division reinstated the damages award. Even if the Appellate Division had affirmed the grant of a new trial, at a minimum, plaintiffs would have suffered the additional costs of prosecuting their case a second time. It is not necessary for all or most of the damages to occur before the cause of action arises. Thus, plaintiffs had a legal right to institute and maintain a legal malpractice action as of November 15, 1990, the day they took possession of their file. (pp. 13-15)
5. Although a plaintiff's ability to discover the facts underlying a malpractice claim may be frustrated by an attorney who keeps critical information from him, that concern is not implicated here once the plaintiffs obtained possession of their case file, as they did not have an inability readily to detect the necessary facts. When plaintiffs took their file, they possessed all the information necessary to reveal malpractice without resort to the interpretive assistance of an expert. While there may be cases in which it would be unfair to conclude that the contents of an extraordinarily large file were reasonably discoverable on the day the client took possession of the file, this is not such a case. (pp. 16-18)
6. Giving plaintiffs the benefit of the discovery rule, they failed to file their cause of action within the six-year statute of limitations. Their ...