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301 Nebraska Reports

COLWELL v. MULLEN

Cite as 301 Neb. 408

Dr. Robert F. Colwell, Jr., D.D.S., and Dr. Robert F. 

Colwell, DDS, P.C., appellants, v. Sean Mullen, J.D., 

and Hancock & Dana, P.C., appellees.

___ N.W.2d ___

Filed October 26, 2018. No. S-17-889.

1. Limitations of Actions: Appeal and Error. The point at which a statute 

of limitations begins to run must be determined from the facts of each 

case, and the decision of the district court on the issue of the statute of 

limitations normally will not be set aside by an appellate court unless 

clearly wrong.

2. Summary Judgment. Summary judgment is proper when the pleadings 

and evidence admitted at the hearing disclose no genuine issue regarding any material fact or the ultimate inferences that may be drawn from 

those facts and that the moving party is entitled to judgment as a matter 

of law.

3. Summary Judgment: Appeal and Error. In reviewing a summary judgment, an appellate court views the evidence in the light most favorable 

to the party against whom the judgment is granted and gives such party 

the benefit of all reasonable inferences deducible from the evidence.

4. Limitations of Actions: Negligence. The period of limitations begins to 

run upon the violation of a legal right, that is, when an aggrieved party 

has the right to institute and maintain suit. If a claim for professional 

negligence is not to be considered time barred, the plaintiff must either 

file within 2 years of the alleged act or omission or show that its action 

falls within an exception to Neb. Rev. Stat. § 25-222 (Reissue 2016).

5. Limitations of Actions. The 1-year discovery exception of Neb. Rev. 

Stat. § 25-222 (Reissue 2016) is a tolling provision, but it applies only 

in those cases in which the plaintiff did not discover and could not have 

reasonably discovered the existence of the cause of action within the 

applicable statute of limitations.

6. Limitations of Actions: Malpractice. In order for a continuous relationship to toll the statute of limitations regarding a claim for malpractice, there must be a continuity of the relationship and services for the 

Nebraska Supreme Court Online Library

www.nebraska.gov/apps-courts-epub/

11/02/2018 09:11 AM CDT
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COLWELL v. MULLEN

Cite as 301 Neb. 408

same or related subject matter after the alleged professional negligence. 

Continuity does not mean the mere continuity of the general professional relationship.

7. ____: ____. Even where a continuous relationship exists, the continuous 

relationship rule is inapplicable when the claimant discovers the alleged 

negligence prior to the termination of the professional relationship.

8. Limitations of Actions: Torts. It is well accepted that when an individual is subject to a continuing, cumulative pattern of tortious conduct, 

capable of being terminated and involving continuing or repeated injury, 

the statute of limitations does not run until the date of the last injury or 

cessation of the wrongful action.

9. ____: ____. The continuing tort doctrine requires that a tortious act—

not simply the continuing ill effects of prior tortious acts—fall within 

the limitation period.

10. Appeal and Error. Claims not presented to or decided by the district 

court need not be addressed on appeal.

Appeal from the District Court for Douglas County: Peter

C. Bataillon, Judge. Affirmed.

John A. Svoboda and Adam J. Wachal, of Gross & Welch, 

P.C., L.L.O., for appellants.

William F. Hargens and Lauren R. Goodman, of McGrath, 

North, Mullin & Kratz, P.C., L.L.O., for appellees.

Heavican, C.J., Miller-Lerman, Cassel, Stacy, Funke, and

Freudenberg, JJ.

Heavican, C.J.

INTRODUCTION

Dr. Robert F. Colwell, Jr., D.D.S., and his self-named professional corporation (collectively Colwell), filed suit alleging malpractice against Sean Mullen and against Hancock 

& Dana, P.C. (collectively Mullen). Sean Mullen is an attorney licensed to practice law and works as a tax attorney 

at Hancock & Dana, an accounting firm. The district court 

granted Mullen’s motion for summary judgment, concluding 

that Colwell’s malpractice claims were barred by the statute 

of limitations set forth in Neb. Rev. Stat. § 25-222 (Reissue 

2016). We affirm.
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COLWELL v. MULLEN

Cite as 301 Neb. 408

FACTUAL BACKGROUND

Dr. Colwell was a dentist practicing primarily in Douglas 

County, Nebraska. In 2004, he agreed to purchase 50 percent of a dental practice currently being operated by Jeffrey 

Garvey. The purchase agreement envisioned that Dr. Colwell 

and Garvey would form separate professional corporations in 

their respective names and that those professional corporations 

would each own half of the practice. The practice would be 

operated as Midlands Oral Health, LLC (Midlands).

Colwell hired Mullen to assist him in forming his professional corporation. Mullen had apparently worked for Garvey 

in the past and was again retained by Garvey to form Garvey’s 

professional corporation. In addition, Mullen was retained by 

Dr. Colwell’s professional corporation, Garvey’s professional 

corporation, and Midlands as an accountant and tax attorney.

Midlands was formed as a going concern complete with various assets, including dental and office equipment and employees. In 2005, Midlands transferred control of its employees to a 

new corporation, Grobell, P.C. Grobell was owned by Garvey; 

apparently, Mullen assisted Garvey in the creation of Grobell 

and the transfer of the employees. Employees from a different 

dental practice that had been purchased by Midlands in 2004 

were also transferred to Grobell. All employees were then 

leased by Grobell to Midlands, apparently at an 18-percent 

leasing fee. Colwell claims that this was all done without his 

knowledge and that he was damaged because as a 50-percent 

owner of Midlands, he had to pay half of the lease fee. Colwell 

alleges that he learned of the transfer of employees in midMarch 2011 and of the leaseback fee in August 2011.

In addition, with Mullen’s assistance, Garvey also formed 

Vanguard Dental Solutions, Inc. (Vanguard). Vanguard was a 

service which charged a membership fee to participate, with 

members receiving a discount on dental services from participating care providers. Midlands was a participating provider 

with Vanguard, and Vanguard members paid less for dental 

services at Midlands. Colwell denies that he was ever informed 
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COLWELL v. MULLEN

Cite as 301 Neb. 408

of Garvey’s interest in Vanguard or of Mullen’s assistance in 

the formation of Vanguard. It is not clear from the record when 

Vanguard was created; Colwell apparently learned of its creation in August 2011.

In October 2010, Colwell formed RMR Enterprises, L.L.C. 

(RMR), for the purpose of constructing a new office building for Midlands. RMR expended over $100,000 to buy land 

and pay fees associated with the purchase. In February 2011, 

Mullen reviewed certain provisions of an operating agreement 

for RMR and billed Colwell for those services.

In April 2011, Colwell terminated his professional relationship with Mullen. He later engaged counsel to file suit against 

Garvey. Colwell and Garvey eventually settled in December 

2011. This current action for professional malpractice was 

filed on March 4, 2013. As amended, Colwell’s complaint 

alleged six acts of legal and accounting malpractice: that 

Mullen (1) failed to advise Colwell of Mullen’s conflict of 

interest; (2) transferred Midlands employees to Grobell without 

Colwell’s knowledge; (3) caused Colwell to pay 50 percent 

of an 18-percent administrative leaseback fee for the Grobell 

employees; (4) prepared and filed an erroneous Schedule K-1 

(K-1) for 2010 (alleged as legal malpractice) and for 2011 

(alleged as both legal and accounting malpractice), causing 

Colwell to pay income tax of $150,000 on income never realized; (5) allowed certain overpayments to Garvey; and (6) 

billed Colwell for work not performed.

Mullen filed several motions to dismiss and motions for 

summary judgment. One motion for summary judgment was 

partially granted on August 11, 2015. In that order, the district 

court granted summary judgment on Colwell’s claims that 

Mullen failed to disclose his conflict of interest, that Mullen 

transferred employees of Midlands to Grobell without Colwell’s 

knowledge, that Mullen prepared and filed an erroneous 2010 

K-1, and that Mullen allowed certain overpayments to be made 

to Garvey. As to each, the district court concluded that the 

claims were barred by the statute of limitations as set forth in 
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§ 25-222. A later motion for summary judgment addressed the 

remaining claims, specifically the leaseback fee, the erroneous 

2011 K-1, and the billing for work not performed. In an order 

dated September 16, 2015, the district court also found those 

claims to be barred by the applicable statute of limitations.

Colwell appeals.

ASSIGNMENTS OF ERROR

Colwell assigns, restated and consolidated, that the district 

court erred in (1) granting Mullen’s motion for summary 

judgment, (2) finding that his action was barred by § 25-222, 

(3) failing to find that Mullen’s actions constituted a continuing tort, (4) failing to find that the continuous representation 

applied to toll § 25-222, and (5) failing to find that there were 

numerous separate acts of malpractice which were timely 

brought under § 25-222.

STANDARD OF REVIEW

[1] The point at which a statute of limitations begins to run 

must be determined from the facts of each case, and the decision of the district court on the issue of the statute of limitations normally will not be set aside by an appellate court unless 

clearly wrong.1

[2,3] Summary judgment is proper when the pleadings and 

evidence admitted at the hearing disclose no genuine issue 

regarding any material fact or the ultimate inferences that may 

be drawn from those facts and that the moving party is entitled 

to judgment as a matter of law.2 In reviewing a summary judgment, an appellate court views the evidence in the light most 

favorable to the party against whom the judgment is granted 

and gives such party the benefit of all reasonable inferences 

deducible from the evidence.3

1 Behrens v. Blunk, 284 Neb. 454, 822 N.W.2d 344 (2012).

2 Jordan v. LSF8 Master Participation Trust, 300 Neb. 523, 915 N.W.2d 399 

(2018).

3 Id.
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COLWELL v. MULLEN

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ANALYSIS

On appeal, Colwell argues that a variety of Mullen’s actions 

were malpractice and that the district court erred in dismissing 

the claims for being time-barred by the statute of limitations 

set forth in § 25-222. Colwell contends that the statute of limitations on these claims was tolled, either because the claims 

alleged continuing torts or because there was a continuous 

representation between him and Mullen. Colwell further asserts 

that additional acts of malpractice occurred within 2 years prior 

to the filing of the malpractice action. Because these matters 

were disposed of by summary judgment, we view the evidence 

in the light most favorable to Colwell.

Statute of Limitations for 

Professional Malpractice.

Section 25-222 sets forth the statute of limitations applicable 

to actions for professional malpractice and provides:

Any action to recover damages based on alleged professional negligence or upon alleged breach of warranty 

in rendering or failure to render professional services shall 

be commenced within two years next after the alleged act 

or omission in rendering or failure to render professional 

services providing the basis for such action; Provided,

if the cause of action is not discovered and could not be 

reasonably discovered within such two-year period, then 

the action may be commenced within one year from the 

date of such discovery or from the date of discovery of 

facts which would reasonably lead to such discovery, 

whichever is earlier; and provided further, that in no 

event may any action be commenced to recover damages 

for professional negligence or breach of warranty in rendering or failure to render professional services more than 

ten years after the date of rendering or failure to render 

such professional service which provides the basis for the 

cause of action.

[4] The period of limitations begins to run upon the violation 

of a legal right, that is, when an aggrieved party has the right 
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to institute and maintain suit.4 If a claim for professional negligence is not to be considered time barred, the plaintiff must 

either file within 2 years of the alleged act or omission or show 

that its action falls within an exception to § 25-222.5

Discovery Exception.

[5] This court has said that the 1-year discovery exception 

of § 25-222 is a tolling provision, but that it applies only in 

those cases in which the plaintiff did not discover and could 

not have reasonably discovered the existence of the cause of 

action within the applicable statute of limitations.6 Under the 

discovery principle,

“a cause of action accrues and the . . . discovery provision . . . begins to run, when there has been discovery of 

facts constituting the basis of the cause of action or the 

existence of facts sufficient to put a person of ordinary 

intelligence and prudence on inquiry which, if pursued, 

would lead to the discovery. . . . It is not necessary 

that the plaintiff have knowledge of the exact nature or 

source of the problem, but only knowledge that the problem existed.”7

Continuous Relationship Exception.

[6,7] This court has also, upon occasion, considered 

whether a continuous relationship might operate to toll the 

statute of limitations set forth in § 25-222. In order for such 

a relationship to toll the statute of limitations regarding a 

claim for malpractice, there must be a continuity of the relationship and services for the same or related subject matter 

after the alleged professional negligence.8 Continuity does 

not mean the mere continuity of the general professional 

4 Behrens v. Blunk, supra note 1.

5 Id.

6 Id.

7 Id. at 460, 822 N.W.2d at 349.

8 Behrens v. Blunk, supra.
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relationship.9 But even where a continuous relationship exists, 

this rule is inapplicable when the claimant discovers the 

alleged negligence prior to the termination of the professional 

relationship.10

Continuing Tort.

[8,9] It is well accepted that when an individual is subject to 

a continuing, cumulative pattern of tortious conduct, capable 

of being terminated and involving continuing or repeated 

injury, the statute of limitations does not run until the date of 

the last injury or cessation of the wrongful action.11 This “continuing tort doctrine” requires that a tortious act—not simply 

the continuing ill effects of prior tortious acts—fall within the 

limitation period.12 Nor can the necessary tortious act merely 

be the failure to right a wrong committed outside the statute of 

limitations, because if it were, the statute of limitations would 

never run because a tort-feasor can undo all or part of the 

harm.13 Rather, when a tort is continuing, although the initial 

tortious act may have occurred longer than the statutory period 

prior to the filing of an action, an action will not be barred 

if it can be based upon the continuance of that tort within 

that period.14

Mullen’s Actions Were 

Not Continuing Torts.

Colwell argues that some of the actions made by Mullen 

were continuing torts and that to the extent the actions continued within the 2 years prior to the filing of his complaint, his 

claims are not barred by the statute of limitations. On appeal, 

Colwell specifically references (1) the transfer of employees 

9 Id.

10 See Reinke Mfg. Co. v. Hayes, 256 Neb. 442, 590 N.W.2d 380 (1999).

11 Alston v. Hormel Foods Corp., 273 Neb. 422, 730 N.W.2d 376 (2007).

12 Id.

13 Id.

14 Id.
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from Midlands to Grobell, which required Midlands to pay 

an 18-percent leaseback fee; (2) the loss of income due to the 

formation of Vanguard; (3) damages from conflict of interest 

to dissolve Midlands without Colwell’s knowledge, occurring 

on or after March 9, 2011, and including June 30; (4) damages 

incurred by RMR in expending funds in preparation for building a new building for Midlands; (5) damages incurred as a 

result of falsification of a 2010 Form 1065 tax return and the 

accompanying K-1, which Colwell alleges Mullen continued 

to prepare from and after March 2011; (6) losses incurred as 

a result of preparation of the falsified 2011 Form 1065 and 

K-1; and (7) damages sustained as a result of Mullen’s providing personal accounting and legal services to Garvey, done to 

conceal Mullen’s and Garvey’s misconduct or to advocate for 

positions in conflict with Colwell’s interests.

[10] As an initial matter, we observe that while Colwell 

pled facts regarding Vanguard, RMR, and the dissolution of 

Midlands, as set forth in claims (2) through (4) above, he did 

not specifically allege any cause of action with regard to any 

alleged malpractice on these issues. Nor were these claims presented to or decided by the district court. As such, we need not 

address them on appeal.15

Moreover, Colwell’s complaint failed to allege that Mullen 

committed malpractice by working with Garvey to provide 

personal legal and accounting services to conceal their wrongdoing, as set forth in claim (7) above. As such, we also need 

not address those claims. Finally, the record establishes that 

the receiver for Midlands at the time of its dissolution, and 

not Mullen, filed the 2011 Form 1065 and associated K-1. 

As such, there is no merit to this claim, set forth as claim 

(6) above.

On these facts, the key time period this court is concerned 

with is between March 3, 2011, which was 2 years prior to the 

15 See American Fam. Mut. Ins. Co. v. Hadley, 264 Neb. 435, 648 N.W.2d 

769 (2002).
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filing of this action, and April 23, the day Colwell terminated 

his professional relationship with Mullen. Prior to that time, 

any claim would be barred by the statute of limitations; any 

subsequent action would not be malpractice for purposes of 

§ 25-222 because Mullen was no longer authorized to provide 

professional services for Colwell.

With this background, we turn to Colwell’s claim regarding Grobell, set forth above as claim (1). As the district court 

found, Mullen created Grobell on Garvey’s behalf in 2001 and 

Midlands employees were transferred at about that same time. 

Colwell contends that he continues to be injured by this transfer because Grobell charged Midlands an 18-percent leaseback 

fee on those employees, of which he paid 9 percent as a part 

owner of Midlands.

The record shows that the transfer of employees from 

Midlands to Grobell occurred in 2005, with no indication 

from the record that Mullen did anything further with respect 

to Grobell after that point. Colwell merely alleges that he lost 

money in the form of the 18-percent leaseback fee. Such is an 

ill effect of an earlier act, and not in itself a tortious act that 

occurred within the statute of limitations.16 There is no merit to 

this claim.

Colwell also alleges, set forth above as claim (5), that 

Mullen committed malpractice by filing a falsified 2010 Form 

1065 and associated K-1 for Midlands. Assuming that Colwell 

can maintain this cause of action, we conclude that it is barred 

by the statute of limitations. While Colwell now argues that 

Mullen’s billing records suggest that the 2010 forms were 

prepared in April 2011, in an interrogatory answered during 

discovery, Colwell indicated that he was aware in “January, 

2011 [or p]ossibly early February, 2011” that the 2010 K-1 was 

erroneous. This is supported by Mullen’s affidavit testimony 

that he filed the 2010 Form 1065 and K-1 “[i]n early 2011.” 

We find no error in the district court’s factual finding that the 

16 See Alston v. Hormel Foods Corp., supra note 11.
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2010 K-1 was prepared in January 2011. This date is prior to 

the March 3 date relevant to this analysis and is outside the 

limitations period.

There is no merit to Colwell’s assertion that the statute of 

limitations was tolled by the continuing tort doctrine.

Continuous Representation 

Doctrine Is Inapplicable.

Colwell also argues that the continuous representation doctrine applies to toll the statute of limitations as to Mullen’s 

alleged malpractice claim in assisting Garvey in the formation and organization of Vanguard. As noted above, Vanguard 

was the discounted dental fee arrangement in which members 

paid a fee to belong to a corporation owned by Garvey, then 

paid a reduced rate for dental services to Midlands, of which 

Colwell was half owner. Colwell argues that he was damaged 

because he earned half of a reduced fee, while Garvey earned 

the other half, as well as income from his ownership interest 

in Vanguard.

We again observe that while Colwell set forth some facts 

as to Vanguard in his first amended complaint, he did not set 

forth a cause of action specific to Mullen’s role in creating 

Vanguard. But in any case, we find the continuous representation doctrine inapplicable. The continuous representation doctrine requires “a continuity of the relationship and services for 

the same or related subject matter after the alleged professional 

negligence.”17 Continuity does not mean the mere continuity 

of the general professional relationship. Colwell claims that he 

was not aware of Vanguard’s existence. Colwell and Mullen 

could not have had a continuous relationship over a matter 

Colwell did not know existed and in which Mullen most decidedly did not represent Colwell. Rather, any continuity would 

have to be based on only the general professional relationship; 

we have held that this is insufficient to support the application 

17 Behrens v. Blunk, supra note 1, 284 Neb. at 462, 822 N.W.2d at 350.
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of this doctrine. Colwell’s argument regarding the continuous 

representation doctrine’s applicability to Vanguard is without merit.

Remaining Allegations of Malpractice Either 

Were Not Pled or Are Without Merit.

Colwell also argues that several of his claims allege separate acts of malpractice that occurred in the 2 years preceding 

the filing of his complaint. Specifically, Colwell alleges that 

Mullen (1) had a conflict of interest when he advised Garvey 

to dissolve Midlands; (2) billed Midlands for matters notwithstanding the pendency of the receivership, in violation of an 

ongoing conflict of interest; (3) knew that Midlands would 

likely be dissolved yet allowed Colwell to expend funds in 

connection with RMR; (4) falsified the 2010 Form 1065 and 

associated K-1; (5) falsified the 2011 Form 1065 and associated K-1; (6) failed to return Colwell’s file upon request; and 

(7) billed Midlands for personal work done for Garvey.

Most of these claims were not pled. Colwell did not plead 

that Mullen had a conflict of interest in advising Garvey to dissolve Midlands or that Mullen billed Midlands for work done 

during the pendency of the receivership. Nor did Colwell specifically plead any cause of action relating to RMR, the refusal 

to return his file, or any work on Garvey’s behalf billed to 

Midlands. In addition, as is noted above, the 2011 Form 1065 

and associated K-1 were not prepared by Mullen.

The only remaining claim regards the 2010 Form 1065 and 

associated K-1, which claim, as noted above, was barred by 

the statute of limitations. As such, there is no merit to any of 

Colwell’s arguments on his separate claims of malpractice.

CONCLUSION

The order of the district court granting Mullen’s motion for 

summary judgment is affirmed.

Affirmed.

Papik, J., not participating.