Kimmer v. Wright

396 S.C. 53

719 S.E.2d 265

Carol M. KIMMER, Personal Representative of the Estate of Richard Kimmer, deceased, Respondent,

v.Philip E. WRIGHT, Appellant.

No. 4902.

Court of Appeals of South Carolina.

Heard March 23, 2011.Decided Nov. 2, 2011.Rehearing Denied Dec. 19, 2011.

Warren C. Powell, Jr., of Columbia, for Appellant.

Thomas H. Pope, III, of Newberry, for Respondent.

HUFF, J.

Philip Wright appeals the trial court's order granting partial summary judgment to Carol M. Kimmer, as personal representative of the estate of Richard Kimmer,¹ in which the court held the statute of limitations had not run on Kimmer's legal malpractice action. We reverse and remand.

FACTS/PROCEDURAL HISTORY

On January 29, 1999, Kimmer was injured in a motor vehicle accident as he was driving to work for his employer, Murata. He hired attorney Philip Wright to represent him. Without notice to Murata, Wright settled Kimmer's claims with the at-fault driver's insurance carrier for his policy limit of $15,000 on June 16, 1999. Kimmer filed a Form 50 on June 18, 1999, and an Amended Form 50 on May 29, 2002, seeking workers' compensation benefits. Murata filed its Form 51 denying Kimmer's claim and asserting as a defense the third party action had been settled without consent. In a meeting at Wright's office, Wright informed Kimmer about his mistake in settling the third party claim and advised him to get another attorney due to the potential for Kimmer to file a claim against him. Wright followed up this conversation with a letter dated February 1, 2000. On that same date Kimmer signed a waiver of conflict recognizing he might have a right to make a claim against Wright due to his representation in the workers' compensation action but agreeing to let Wright continue to represent him in the personal injury case. Kimmer terminated Wright's representation of him on February 24, 2000.

In an order dated July 31, 2003, the single commissioner found Kimmer's injuries compensable because Murata provided him with a car allowance and mileage. However, the single commissioner denied Kimmer's claim, concluding the settlement of the third party claim, without notice to Murata, constituted an election of remedies and barred the workers' compensation claim. The Appellate Panel affirmed and adopted the order of the single commissioner. In its amended order, the circuit court reversed the order of the Appellate Panel, finding Murata suffered no prejudice as a result of the settlement without notice. It held Kimmer was totally and permanently disabled and was entitled to an award of total and permanent disability, less an offset for the third party settlement. This court reversed the order of the circuit court and reinstated the order of the Appellate Panel. Kimmer v. Murata of Am., 372 S.C. 39, 640 S.E.2d 507 (Ct.App.2006), cert. denied, (Oct. 18, 2007).

While the appeal was proceeding in the workers' compensation case, Wright and Kimmer entered into a tolling agreement on October 30, 2003, which provided the time period between the date of the agreement and its termination at no later than November 1, 2004, would not be included in determining a statute of limitations or laches defense. However, the agreement provided it would not be deemed to revive any claim that was already barred on that date. Kimmer brought this action on October 14, 2004. On May 13, 2005, Wright filed an amended answer asserting Kimmer's legal malpractice action was barred by the statute of limitations.

On June 20, 2005, the Honorable S. Jackson Kimball denied Wright's motion for summary judgment on the statute of limitations defense. The judge explained that the adverse ruling of the Workers' Compensation Commission would be the similar “trigger” event as the adverse jury verdict that triggered the running of the statute of limitations in Epstein v. Brown, 363 S.C. 372, 376, 610 S.E.2d 816, 818 (2005). The court held, “This Court believes that there is at least an issue of fact in the present case as to when [Kimmer's] awareness of the possibility of an error by [Wright] became sufficient to put him on notice that he actually had an existing legal malpractice claim against [Wright] as opposed to being told merely that he ‘may have’ a claim. The resolution of that possibility involved legal issues upon which, to this point, the Commission and the Circuit Court disagree.” Judge Kimball granted a stay of the legal malpractice action until the appeal of the workers' compensation case was completed.

After the supreme court denied certiorari of this court's decision in the workers' compensation case, both parties moved for summary judgment in the legal malpractice action. The motions were heard before the Honorable John C. Hayes. While Judge Hayes noted the facts suggested Kimmer had notice of a potential claim before the Commission's adverse decision, he held he was bound by Judge Kimball's determination that the statute of limitations was triggered by the Commission's order denying benefits. This appeal followed.

LAW/ANALYSIS

A. Law of the Case

Wright argues Judge Hayes erred in holding Judge Kimball's order was the law of the case. Kimmer conceded this issue in his brief. “A denial of summary judgment does not establish the law of the case and is not directly appealable.” In re Rabens, 386 S.C. 469, 473, 688 S.E.2d 602, 604 (Ct.App.2010). Accordingly, we find Judge Hayes erred in this ruling.

B. Statute of Limitations

Wright argues the trial court erred in holding as a matter of law the statute of limitations had not run on Kimmer's malpractice claim. We agree.

The statute of limitations for a legal malpractice action is three years. S.C.Code Ann. § 15–3–530(5) (2005) (stating the statute of limitations for “an action for assault, battery, or any injury to the person or rights of another, not arising on contract and not enumerated by law” is three years); see also Berry v. McLeod, 328 S.C. 435, 444, 492 S.E.2d 794, 799 (Ct.App.1997) (finding section 15–3–530(5) provides a three-year statute of limitations for legal malpractice actions). The discovery rule applies in this action. See Kelly v. Logan, Jolley, & Smith, L.L.P., 383 S.C. 626, 632–33, 682 S.E.2d 1, 4 (Ct.App.2009) (applying discovery rule in legal malpractice action). Under the discovery rule, “the three-year clock starts ticking on the ‘date the injured party either knows or should have known by the exercise of reasonable diligence that a cause of action arises from the wrongful conduct.’ ” Martin v. Companion Healthcare Corp., 357 S.C. 570, 575–76, 593 S.E.2d 624, 627 (Ct.App.2004) (quoting Bayle v. S.C. Dep't of Transp., 344 S.C. 115, 123, 542 S.E.2d 736, 740 (Ct.App.2001)); see also S.C.Code Ann. § 15–3–535 (2005) (“[A]ll actions initiated under Section 15–3–530(5) must be commenced within three years after the person knew or by the exercise of reasonable diligence should have known that he had a cause of action.”). The supreme court explained reasonable diligence means

simply that an injured party must act with some promptness where the facts and circumstances of an injury would put a person of common knowledge and experience on notice that some right of his has been invaded or that some claim against another party might exist. The statute of limitations begins to run from this point and not when advice of counsel is sought or a full-blown theory of recovery developed. Under § 15–3–535, the statute of limitations is triggered not merely by knowledge of an injury but by knowledge of facts, diligently acquired, sufficient to put an injured person on notice of the existence of a cause of action against another.

Epstein v. Brown, 363 S.C. 372, 376, 610 S.E.2d 816, 818 (2005) (citation omitted).

Kimmer relies on Epstein to support her position the statute of limitations in a legal malpractice case does not start to run until an adverse judgment in the underlying action. We find this reliance is misplaced. In Epstein the supreme court refused to adopt the continuous representation rule, which holds the statute of limitations is tolled during the period an attorney continues to represent the client on the same matter out of which the alleged malpractice arose. Id. 363 S.C. at 380, 610 S.E.2d at 820. The supreme court similarly rejected Epstein's argument the statute of limitations should not be deemed to have run until the conclusion of the appeal of the underlying action because it was not until that date upon which he suffered “legal damages.” Id. Instead, the court held the statute of limitations had begun to run by the conclusion of the trial in the underlying action. Id. at 382, 610 S.E.2d at 821. The court cautioned:

We do not hold that, in all instances, the date of a jury's adverse verdict is the date on which the [statute of limitations] begins to run. To the contrary, we hold only that, under the facts of this case, Dr. Epstein knew of a potential claim against Brown by this date, at the latest.

Id. at 383 n. 8, 610 S.E.2d at 821 n. 8 (emphasis added).

Thus, the court did not establish a bright-line test the statute of limitations cannot begin to run until the jury's adverse verdict, but held, in that particular case, the latest it began to run was the conclusion of the trial. See also Kelly, 383 S.C. at 637, 682 S.E.2d at 6 (holding statute of limitations on Kelly's legal malpractice action began to run well before Kelly was dismissed from underlying action).

Kimmer asserts the statute of limitations was not triggered until the Commission's adverse ruling because until then he could not have established an injury that was proximately caused by Wright's negligence. He asserts until then there was a possibility the Commission would hold his claim was not compensable because it was not work-related or that the third-party settlement did not bar his claim. These issues could have been litigated in the legal malpractice action if necessary. See Doe v. Howe, 367 S.C. 432, 442, 626 S.E.2d 25, 30...