Title: Howard Bank v. Estate of Pope

State: vermont

Issuer: Vermont Supreme Court

Document:

NOTICE:  This opinion is subject to motions for reargument under V.R.A.P. 40
as well as formal revision before publication in the Vermont Reports.
Readers are requested to notify the Reporter of Decisions, Vermont Supreme
Court, 111 State Street, Montpelier, Vermont 05602 of any errors in order
that corrections may be made before this opinion goes to press.


                                No. 89-278


The Howard Bank, N.A.                        Supreme Court

                                             On Appeal from
     v.                                      Chittenden Superior Court

Estate of Frederic Pope, Jr.,                April Term, 1990
Pope & Pu, A Vt. Partnership;
Jack R. Abell, A. Jay Kenlan
and Keyser, Crowley, Banse,
Kenlan & Facey, Inc.


John P. Meaker, J.

Stephen J. Soule and Joseph E. Frank of Paul, Frank & Collins, Inc.,
  Burlington, for plaintiff-appellant

Robert R. McKearin and Robert L. Sand of Dinse, Erdmann & Clapp, Burlington,
  for defendants-appellees Estate of Pope and Pope and Pu

Robert D. Rachlin and Robert A. Miller, Jr., of Downs Rachlin & Martin,
  Burlington, for defendants-appellees Abell and Keyser, Crowley, Banse
  & Facey, Inc.

Elizabeth A. Glynn and R. Joseph O'Rourke of Ryan Smith & Carbine, Ltd.,
  Rutland, for defendant-appellee Kenlan


PRESENT:  Gibson, Dooley and Morse, JJ., and Mahady, D.J. and Martin, Super.
          J., Specially Assigned


     DOOLEY, J.   This is a legal malpractice action in which the main
question before us is whether the trial court erred in refusing to apply the
discovery rule to determine when the cause of action accrued, and, as a
result, in granting summary judgment for defendants.  We hold that the
summary judgment was erroneous and accordingly reverse and remand.
     Plaintiff, Howard Bank, lent money to the Rutland Industrial
Development Corporation and the Kors Company in order to buy equipment for
Kors, the ultimate beneficiary of the loans.  The money was loaned in three
separate transactions which occurred in 1978 and 1979.  The equipment was to
serve as security for the loans.  Plaintiff was unrepresented, but lawyers
for Kors, defendants Frederick Pope, Jr., Jack Abell and A. Jay Kenlan,
certified that plaintiff was fully secured.  In fact, the lawyers failed to
file financing statements naming Kors, and this led to extensive litigation
over the security after Kors went into bankruptcy in late 1980.  In March
1988, plaintiff sued the lawyers for damages caused by their alleged
malpractice.  The trial court held that in all cases more than six years had
elapsed since the alleged negligent act, and therefore the action was barred
by 12 V.S.A. { 511, the applicable statute of limitations.
     On appeal, plaintiff urges us to adopt an accrual rule based either on
the last date the injury could be avoided or on plaintiff's discovery of the
injury.  Since the trial court's action in this case, we have held that for
purposes of the six-year limitation period provided in 12 V.S.A. { 511, a
cause of action accrues at the time of the discovery of the injury.
University of Vermont v. W.R. Grace & Co., 152 Vt. 287, 290, 565 A.2d 1354,
1357 (1989).  We have also held that legal malpractice claims involving
economic loss are governed by { 511.  Fitzgerald v. Congleton, ___ Vt. ___,
___, 583 A.2d 595, 601 (1990).  Defendants argue that despite these
precedents we should not apply a discovery rule to legal malpractice
actions.  In fact, the policy reasons supporting use of a discovery rule in
malpractice actions are greater than in other areas.  See Neel v. Magana,
Olney, Levy, Cathcart & Gelfand,