Nichols v. Swindoll

2023 Ark. 97

668 S.W.3d 493

Rebecca NICHOLS, Appellant

v.James SWINDOLL and Chuck Gibson, Appellees

No. CV-21-417

Supreme Court of Arkansas.

Opinion Delivered: June 8, 2023

Harry McDermott Fayetteville, and Robert S. Tschiemer, Mayflower, for appellant.

Barber Law Firm, PLLC, by: G. Spence Fricke and Adam D. Franks, Little Rock, for separate appellee James Swindoll.

KAREN R. BAKER, Associate Justice

Appellant Rebecca Nichols appeals from the Pulaski County Circuit Court's dismissal of her legal-malpractice complaint against her attorneys, appellees James Swindoll and Chuck Gibson (collectively, the "Attorneys"). On appeal, Nichols argues that the circuit court abused its discretion in granting the Attorneys’ motion to dismiss and finding that there were no facts in the complaint sufficient to toll the running of the statute of limitations based on fraudulent concealment. We affirm.

Nichols is a tractor-trailer driver. On or about November 23, 2014, Nichols was dispatched to Jonesboro, Arkansas, to pick up a trailer containing steel coils for transportation to Arkansas City, Kansas. Nichols attached the trailer to her truck and proceeded to Arkansas City. When Nichols entered the highway, the trailer swayed, causing the tractor trailer to overturn. According to Nichols, the cargo was not properly loaded and secured, which caused the cargo to dislodge and pull the trailer into a turnover wreck. Nichols hired the Attorneys to represent her in her personal-injury lawsuit. On September 21, 2017, her Attorneys filed her personal-injury complaint against John Does in the Baxter County Circuit Court. According to Nichols, the Attorneys were aware that they had until January 19, 2018, which was 120 days from the filing of the complaint, to serve the lawsuit or request an extension of service. The Attorneys failed to accomplish service or request an extension, and as a result, the statute-of-limitations period for the personal-injury claim expired. It is Nichols's position that although her personal-injury claim was barred by the statute of the limitations, her Attorneys continued her litigation despite knowing it was useless. Specifically, the Attorneys filed amended complaints against named parties in August 2018 and April 2019. Nichols alleged that, due to the Attorneys’ failure to complete service, the malpractice occurred on January 19, 2018.¹ From this date, Nichols had three years—until January 2021—to file her legal-malpractice claim against her Attorneys. However, Nichols did not file her malpractice complaint until February 22, 2021. On April 7, 2021, Nichols filed her first amended complaint, which incorporated her original complaint. Nichols alleged that, in order to prevent her from discovering her claim for malpractice, the Attorneys maliciously, willfully, and purposefully attempted to conceal the fact that she could no longer successfully litigate her personal-injury claim. Nichols alleged that her Attorneys were negligent and breached their fiduciary duty by fraudulently and maliciously hiding their malpractice from Nichols. Further, Nichols asserted that in March 2020, Swindoll informed her that he and Gibson had committed a separate malpractice in May 2019.² However, Swindoll assured Nichols that the judge might excuse their malpractice and allow her to continue with her lawsuit.

On March 31, 2021, Swindoll filed his motion to dismiss, and on April 16, 2021, he filed his motion to dismiss the amended complaint. Swindoll argued that the malpractice claim was barred by the statute of limitations. Swindoll asserted that Nichols's accident occurred on November 23, 2014, and therefore, the three-year statute-of-limitations period for her personal-injury claims expired on November 23, 2017. Therefore, Swindoll argued that Nichols was required to bring her legal-malpractice claim on or before November 23, 2020. As to Nichols's assertion of fraudulent concealment, Swindoll contended that Nichols asserted conclusory and insufficient allegations to toll the three-year statute-of-limitations period for the malpractice claim against Swindoll. He contended that the February 2021 malpractice complaint was therefore time-barred by the statute of limitations and should be dismissed. Swindoll moved for dismissal pursuant to Rule 12(b)(6) of the Arkansas Rules of Civil Procedure for failure to state a claim upon which relief can be granted. On April 2, 2021, Gibson filed a motion to dismiss asserting similar grounds.

During a May 21, 2021 hearing, the circuit court examined portions of the amended complaint and noted that it had not seen a specific date on which Nichols alleged that the Attorneys had taken any action to conceal the expiration of the limitations period. In reading portions of the complaint, the circuit court commented that Nichols alleged conclusions but did not cite any facts. The circuit court remarked that there is nothing to suggest that any of the Attorneys’ filings after January 2018—the last time the statute of limitations could have run—were intended to deceive Nichols. In closing, the circuit court granted the motion to dismiss based on the statute of limitations.

On June 7, 2021, the circuit court entered its written order granting the Attorneys’ motion to dismiss and dismissing Nichols's malpractice complaint with prejudice. The circuit court found that Nichols's claims for malpractice against her Attorneys are barred by the three-year legal-malpractice statute of limitations. Even if the proposed date for the Attorneys’ malpractice is applied—January 19, 2018—the three-year limitations period expired more than one month before she filed her February 2021 malpractice complaint. The circuit court further found that there were no facts in Nichols's complaint or amended complaint sufficient to toll the running of the statute of limitations based on fraudulent concealment. Specifically, the circuit court found that there were no facts stated showing the elements of fraud, and there were no facts stated showing that the alleged fraud was furtively planned and secretively executed.

Nichols timely appealed the circuit court's dismissal of her malpractice complaint to the Arkansas Court of Appeals. The court of appeals affirmed the circuit court's dismissal of her legal-malpractice lawsuit. Nichols v. Swindoll , 2022 Ark. App. 233, 2022 WL 1561180, opinion supplemented on reh'g , 2022 Ark. App. 399, 2022 WL 5065154. Nichols petitioned this court for review, which we granted on January 26, 2023. When we grant a petition for review, we treat the appeal as if it had been originally filed in this court. Nalley v. Adams , 2021 Ark. 191, 632 S.W.3d 297.

Point on Appeal

On appeal, Nichols argues that the circuit court abused its discretion in granting the Attorneys’ motion to dismiss and finding that there were no facts contained in the complaint sufficient to toll the running of the statute of limitations based on fraudulent concealment. She contends, as she did below, that her attorneys fraudulently concealed their malpractice and therefore prevented her from learning that they had committed malpractice until March 2020. Nichols also asserts that her Attorneys had a duty to speak rather than to remain silent with respect to their malpractice. Stated differently, it is Nichols's position that, because of the Attorneys’ fraudulent concealment, the statute of limitations was tolled until March 2020—the date that she was informed of the malpractice. According to Nichols, she had three years from March 2020 to bring her malpractice lawsuit against her Attorneys. She therefore contends that she timely filed her malpractice complaint on February 22, 2021.

The granting of a Rule 12(b)(6) dismissal is reviewed under the abuse-of-discretion standard. Ballard Grp., Inc. v. BP Lubricants USA, Inc. , 2014 Ark. 276, 436 S.W.3d 445. "In order to prevail on a motion to dismiss a complaint on the basis of a statute-of-limitations defense, it must be barred on its face." Hutcherson v. Rutledge , 2017 Ark. 359, at 3, 533 S.W.3d 77, 79. Once a defendant has affirmatively raised a statute-of-limitations defense, and it is clear from the face of the complaint that the action is barred by the applicable limitations period, the burden shifts to the plaintiff to prove by a preponderance of the evidence that the statute of limitations was in fact tolled. Id. at 4, 533 S.W.3d at 80. The statute-of-limitations period for legal-malpractice actions is three years. Ark. Code Ann. § 16-56-105(3) (Repl. 2005). Absent concealment, it begins to run upon the occurrence of the wrong. Delanno, Inc. v. Peace , 366 Ark. 542, 545, 237 S.W.3d 81, 84 (2006) (citing Goldsby v. Fairley , 309 Ark. 380, 831 S.W.2d 142 (1992) ). "Fraudulent concealment suspends the running of the statute of limitations, and the suspension remains in effect until the party having the cause of action discovers the fraud or should have discovered it by the exercise of due diligence." Shelton v. Fiser , 340 Ark. 89, 96, 8 S.W.3d 557, 561 (2000).

In order to establish fraud, a plaintiff must prove five elements under Arkansas law: (1) that the defendant made a false representation of material fact; (2) that the defendant knew that the representation was false or that there was insufficient evidence upon which to make the representation; (3) that the defendant intended to induce action or inaction by the plaintiff in reliance upon the representation; (4) that the plaintiff justifiably relied on the representation; and (5) that the plaintiff suffered damage as a result of the false representation. Ark. Dev. Fin. Auth. v. Wiley , 2020 Ark. 395, 611 S.W.3d 493 (citing Muccio v. Hunt , 2016 Ark. 178, 490 S.W.3d 310 ).

To show concealment, "not only must there be fraud, but the fraud must be furtively planned and secretly executed so as to keep the fraud concealed." Delanno , 366 Ark. at 545, 237 S.W.3d at 84. Though alleging fraud is necessary, it is not alone sufficient to toll the...