No. 87-143 

- 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

LAWRENCE SCHNEIDER, 

Plaintiff and Appellant, 

-17sDefendant and Respondent. 

APPEAL FROM: District Court of the Twelfth Judicial District, 

In and for the County of Chouteau, 

The Honorable R.D. McPhillips, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Ralph T. Randono, Great Falls, Montana 

For Respondent: 

Ugrin, Alexander, Zadick & Slovak; Gary M. Zadick, 

Great Falls, Montana 

Submitted on Briefs: July 23, 1987 

Decided: October 6, 1987 

Filed: ocr 6 - 19871 

Clerk 
Mr. Justice L.C. Gulbrandson delivered the Opinion of the 

Court. 

Plaintiff appeals from the order of the Ninth Judicial 

District in and for Chouteau County, Montana, granting 

defendant's motion for summary judgment. We affirm. 

C.W. Leaphart is an attorney residing in Helena. In 

1979, Dr. Lawrence Schneider, a Helena dentist, and his wife, 

Lynne Schneider, approached Leaphart and asked that he 

represent them in a joint petition for dissolution. Leaphart 

agreed to the representation and recommended that the 

Schneiders work out a suitable property settlement on their 

own. 

Dr. Schneiderls accountant recommended that he frame 

part of the property settlement as maintenance for tax 

purposes. Dr. Schneider gathered from his discussions with 

the accountant and Leaphart that the maintenance payments 

must extend over a period of ten years to be tax deductible. 

Consequently, Dr. Schneider directed Leaphart to include a 

provision in the property settlement whereby Lynne Schneider 

would receive $1,000 a month in maintenance for ten years and 

a month. Leaphart advised Dr. Schneider that he could 

subsequently modify the property settlement agreement, but 

that any such modification should be in writing. 

Dr. Schneider then entered into discussions with Lynne 

concerning a side agreement to terminate the maintenance 

payments after twenty-six months. Dr. Schneider drafted an 

agreement to limit maintenance to twenty-six months and told 

Lynne that "it's not important to me whether you really sign 

this or not, just so you understand and agree with me as to 

the terms of the agreement we made." Lynne Schneider refused 

to sign the side agreement. 
The Schneiders agreed on the terms of the property 

settlement as drafted by Leaphart. The dissolution decree 

and property settlement agreement were entered in the 

District Court of Lewis and Clark County on November 3, 1979. 

In January of 1981, Dr. Schneider again attempted to obtain a 

side agreement from Lynne to limit maintenance payments to 

twenty-six months. Lynne again refused to sign such an 

agreement. In July of 1981, after making twenty-two $1,000 

maintenance payments, Dr. Schneider offered to pay in advance 

what he believed to be the remaining four payments on the 

condition that Lynne give him a release. Lynne did not 

respond to this offer. 

Approximately three months later, Dr. Schneider 

solicited the opinion of an accountant as to the necessity of 

the ten year maintenance provision in the property settlement 

agreement. On December 4, 1981, Dr. Schneider received The 

accountant's opinion that the ten year provision was 

unnecessary and that maintenance payments were properly 

deductible based on a twenty-six month term. That same day, 

Dr. Schneider had Leaphart send the twenty-sixth monthly 

maintenance payment to Lynne. Leaphart typed on the check 

that this payment was "the final payment due you per the 

understanding of [the date of the side agreement] ." On 

December 15, 1981, Dr. Schneider again sent Lynne a release 

for her signature. Lynne again ignored his correspondence. 

Dr. Schneider made no further maintenance payments as 

required by the property settlement. 

Lynne's refusal to cooperate prompted Dr. Schneider to 

suggest to Leaphart that litigation be instituted to resolve 

the matter. However, Dr. Schneider did not believe that 

Lynne would seek to enforce the maintenance provisions of the 

property settlement. Leaphart counseled Dr. Schneider not to 

sue Lynne because it appeared that Lynne would not demand the 
remaining maintenance payments. At Dr. Schneider's request, 

Leaphart provided an affidavit attesting to Lynne's having 

agreed orally to the twenty-six month side agreement. 

In January of 1984, Dr. Schneider attempted to sell two 

pieces of rental property located in Helena and jointly owned 

by Dr. Schneider and his dental partners. The title reports 

on the properties characterized the maintenance (as ordered 

in the decree of dissolution) as a lien. Lynne agreed to 

quitclaim her interest in one of the properties because the 

buyer was a friend. She refused to give the buyer of the 

second property a quitclaim deed. 

Dr. Schneider met with Lynne on three occasions during 

the spring of 1984 in an attempt to obtain a release. Lynne 

responded by filing suit in the District Court of Lewis and 

Clark County to enforce the maintenance provisions of the 

property settlement agreement. The Lewis and Clark County 

District Court found that no side agreement existed and 

ordered that the parties be held to the terms of the original 

property settlement agreement. The case settled with Lynne 

receiving approximately $50,000 in property and cash. 

Dr. Schneider filed this action for professional 

malpractice in Chouteau County District Court against 

Leaphart on March 27, 1985, more than three years and three 

months after the accountant's opinion. Dr. Schneider alleged 

that Leaphart negligently drafted the property settlement 

agreement to include an unnecessary provision for 

maintenance. Leaphart answered and alleged, among other 

defenses, that Dr. Schneider's claims were barred by the 

statute of limitations. 

Dr. Schneider was deposed on July 18, 1985. On October 

22, 1985, Leaphart moved for summary judgment on the grounds 

that Dr. Schneider failed to file the action within the 

applicable statute of limitations for attorney malpractice as 
set forth in S 27-2-206, MCA. The District Court granted 

Leaphart's motion and Dr. Schneider appeals raising the 

following issues: 

(1) Was Dr. Schneider aware, as a matter of law, of 

all facts essential to his cause of action, before the start 

of the limitations period? 

(2) Was the limitations period tolled by the doctrine 

of "continuous representation?" 

(3) Should Leaphart be estopped to raise the statute 

of limitations in this action? 

The statute of limitations for attorney malpractice, 

S 27-2-206, MCA, provides as follows: 

An action against an attorney licensed to 

practice law in Montana or a para-legal 

assistant or legal intern employed by an 

attorney based upon the person's alleged 

professional negligent act or for error 

or omission in the person's practice must 

- be commenced within three years after the 

plaintiff discovers or through the use --- of 

reasonable diligence should have 

discovered -- the act, error or omission, 

whichever comes last, but in no case may 

the action be commenced after ten years 

from the date of the act, error, or 

omission. (Emphasis added.) 

The District Court found no genuine issue of material fact 

and granted summary judgment to Leaphart as a matter of law 

on the grounds that Dr. Schneider had not filed this action 

within the three-year statute of limitations. Dr. 

Schneider's burden on appeal is to establish that a genuine 

issue of material fact exists. Pretty On Top v. Hardin 

(1979), 182 Mont. 311, 315, 597 P.2d 58, 60. 

Dr. Schneider first argues that the District Court 

erred in concluding that he had "discovered" Leaphart's 

negligent act more than three years before the filing of this 

action. As his first issue implies, Dr. Schneider asserts 
that he must discover all elements of a cause of action, 

including his damages, before the statute of limitations 

accrues. Dr. Schneider contends that he did not discover his 

damages until he learned that the maintenance order was a 

lien on his property in February of 1984. The date of 

"discovery," he argues, is a genuine issue of material fact 

and it was improper for the District Court to enter summary 

judgment. 

Dr. Schneider urges this Court to adopt a new rule 

whereby the statute of limitations in a legal malpractice 

action would not run until the plaintiff discovers his actual 

and determinable damages. This relatively new rule, 

otherwise know as the "damage rule," has been recognized in 

several states. See, R. Mallen & V. Levit, 

Legal Malpractice, $3 390 (2d ed. 1981). However, Dr. 

Schneider's "damage rule" argument fails for two reasons. 

Initially, the Montana legal malpractice statute of 

limitations, 5 27-2-206, MCA, only allows the tolling of the 

statute of limitations until such time as the attorney's 

negligent act is discovered or through the use of reasonable 

diligence should have been discovered. Burgett v. Flaherty 

(Mont. 1983), 663 P.2d 332, 334, 40 St.Rep. 748, 751. There 

is no statutory requirement that the legal malpractice 

statute of limitations be tolled until a party discovers his 

or her damages. Section 27-2-206, MCA. 

Even if Montana recognized the "damage rule," which it 

does not, Dr. Schneider's argument fails because he knew or 

should have known the extent of his damages well within the 

three year statute of limitations. The decree of dissolution 

(including the maintenance provision) in this matter became 

an enforceable judgment upon entry by the Clerk of the 

District Court. Rule 54(a), M.R.Civ.P. At the time it was 

docketed, the maintenance provision in the decree of 
dissolution became a lien upon all of Dr. Schneider's real 

property in Lewis and Clark County. Section 25-9-301(2), 

MCA; Gaines v. Van Demark (1937), 106 Mont. 1, 74 P.2d 454. 

Consequently, Dr. Schneider is charged with at least 

constructive knowledge of the liens against his real property 

as of the date the decree was entered in District Court; 

November 3, 1979. 

Dr. Schneider received the accountant's opinion and 

became aware of Leaphart's alleged negligence on December 4, 

1981. He was aware at that time that the maintenance 

provision required monthly payments of $1,000 for ten years 

and a month. Dr. Schneider also repeatedly attempted to get 

Lynne to reduce his maintenance obligations. Given these 

circumstances, the District Court was correct in concluding 

that no genuine issue of material fact existed as to when Dr. 

Schneider discovered Leaphart's alleged negligent act. 

As to the second issue in this appeal, the material 

facts are not in dispute. Accordingly, Dr. Schneider's 

second issue presents this Court with a question of law. We 

are then free to review the District Court's legal analysis 

and draw our own conclusions. Sharp v. Hoerner Waldorf Corp. 

(1978), 178 Mont. 419, 423, 584 P.2d 1298, 1300. Our 

analysis leads us to agree with the District Court. 

Dr. Schneider urges this Court to adopt the doctrine of 

"continuous representation" in the context of legal 

malpractice actions. His argument is that the three year 

legal malpractice statute of limitations must be tolled until 

such time as an attorney ceases to represent a plaintiff. 

The District Court found that, as a matter of law, Montana 

does not recognize the doctrine of continuous representation 

in legal malpractice actions. 

Dr. Schneider is correct in pointing out that this 

Court has not directly addressed this issue in the past. 
However, this Court has noted that "[slection 27-2-206, MCA 

does not suspend accrual until the 'attorney-client' 

relationship has been terminated." Burgett, 663 P.2d at 334, 

40 St.Rep. at 751. Some states, like California, have seen 

fit to codify the "continuous representation" doctrine into 

their legal malpractice statutes of limitations. Compare 

Cal.Code Civ.Proc. § 304.6(a)(2). The doctrine of continuous 

representation is absent from the Montana legal malpractice 

statute and we decline to judicially adopt such a provision. 

Accordingly, the District Court was correct in refusing to 

apply the doctrine of continuous representation to toll the 

statue of limitations in this matter. 

In his final issue, Dr. Schneider argues that Leaphart 

should be estopped from pleading the statute of limitations. 

Dr. Schneider contends that Leaphart's advice not to sue 

Lynne Schneider prevented him from discovering his damages 

and for this reason alone Leaphart should be estopped from 

claiming that the statute of limitations had run. Regardless 

of what Dr. Schneider knew or did not know about his damages, 

we again emphasize that he needed only to discover Leaphart's 

alleged negligent act for the statute of limitations to 

commence. 

The District Court applied the elements of estoppel to 

the facts and ruled in Leaphart's favor. See Keneco v. 

Cantrell (1977), 174 Mont. 130, 136, 568 P.2d 1225, 1228. 

However, the District Court need not have addressed the 

elements of estoppel because concealment of damages, as 

argued by Dr. Schneider, is not material to an estoppel 

argument under the specific circumstances of this case. 

For a viable estoppel argument, Dr. Schneider must 

first present evidence that "conduct, act, language or 

silence amounting to a representation or a concealment of 

material facts . . . " by Leaphart prevented discovery of 
Leaphart's alleged negligent act. Keneco, supra. Dr. 

Schneider fails to address this point and we are under no 

duty to anticipate his argument to establish the existence of 

a genuine issue of material fact. Larry C. Iverson, Inc. v. 

Bouma (1981), 195 Mont. 351, 374, 639 P.2d 47, 59. 

The first issue in this appeal is dispositive of the 

last issue. Dr. Schneider became aware of Leaphart's alleged 

negligence no later than the date he received the 

accountant's opinion. His lcnowledge of the alleged faulty 

maintenance provision, as drafted by Leaphart, was sufficient 

to begin the running of the three-year statute of 

limitations. Accordingly, no genuine issues of material fact 

exist as to when Dr. Schneider discovered Leaphart's alleged 

negligent act. We hold that the three-year statute of 

limitations, as set forth in S 27-2-206, MCA, had run and 

summary judgment was proper under the particular facts of 

this case. 

Affirmed. # 

We concur: A A Justic