NO. 87-371 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1988 

WALTER ADAM SCHWEITZER, 

Plaintiff and Counter-defendant, 

ESTATE OF ANDREW C. HALKO, 

Defendant and Counter-Plaintiff, 

ESTATE OF ANDREW C. HALXO, 

Third Party Plaintiff and Appellant 

-vsCLARKE M. DAWSON, 

Third Party Defendant and Respondent. 

APPEAL FROM: District Court of the Tenth Judicial District, 

In and for the County of Judith Basin, 

The Honorable Peter L. Rapkoch, Judge presiding. 

COUNSEL OF RECORD: 

For Plaintiff and Counter-Defendant, 

Defendant and Counter-Plaintiff: 

Howard F. Strause, Great Falls, Montana 

For Third Party Plaintiff and Appellant, 

Third Party Defendant and Respondent: 

William Conklin, (Dawson), Great Falls, Montana 

Bradley Parrish, (Schweitzer), Lewistown, Montana 

Submitted on Briefs: January 7, 1988 

Decided: March 25, 1988 

Clerk 
Mr. Justice John C. Sheehy delivered the Opinion of the 

Court. 

The Estate of Andrew Halko appeals from an order of the 

District Court, Tenth Judicial District, Judith Basin County, 

dismissing their claims against the defendant Clarke Dawson 

on the grounds that the applicable statute of limitations had 

run. We affirm. 

The Halko estate presents two issues on appeal. They 

are : 

1. Did the trial court err in granting summary judgment 

on the basis of the statute of limitations having run? 

2. Did the trial court err in granting summary judgment 

on the basis of the in - pari delicto doctrine? 

Andrew and Mary Halko were an elderly couple with 

significant land holdings. In 1977, the Halkos executed 

reciprocal mutual Wills. The Wills devised a segment of the 

Halko's property to Mary's sister and niece, Genevieve 

Schultz and Emily Hastings. Each Will provided that the 

testator would not change the Will once the other spouse was 

deceased. Mary Halko died in 1980 and was survived by her 

husband, Andrew. At the time of Mary's death, neither of the 

mutual and reciprocal Wills had been revoked or modified. 

After Mary's death, Andrew became displeased with Mary's 

relatives and decided to disregard the Will and sell that 

segment of property which under the terms of the Will would 

pass to Schultz and Hastings. 

Andrew sold the land to Walter Schweitzer, a neighboring 

farmer who had previously expressed an interest in purchasing 

the property. In October, 1980, Halko and Schweitzer entered 

into a lease agreement with an option to purchase. The 

agreement was a standard form document which Halko and 
Schweitzer filled out without the benefit of legal 

assistance. The document entitled "Earnest Money Receipt" 

granted Schweitzer a 12 month lease on the property with an 

option to purchase. The evidence indicates both parties 

believed that the agreement which they entered into was not a 

binding contract. 

After executing the document, Halko expressed a desire 

to have his attorney draw up "a legal contract" as he 

believed the document which he and Schweitzer had signed was 

"not binding enough." Schweitzer believed the "Earnest Money 

Receipt" agreement was a temporary agreement that would be 

finalized later. 

Halko consulted Clarke Dawson, a Great Falls attorney 

regarding the sale of the property to Schweitzer. Dawson had 

already been retained by Halko to handle the probate of Mary 

Halko's estate. As such, Dawson had knowledge of the 

reciprocal Will including the devise of the property (which 

was the object of the sale) to Hastings and Schultz. 

Dawson prepared an option agreement for Halko and 

Schweitzer which was executed in November, 1980. Subsequent 

to the execution of the option agreement, Halko requested 

Dawson to draft a new Will for him omitting the devises to 

Hastings and Schultz. Andrew Halko executed this Will in 

March, 1981. 

In April, 1981, Hastings and Schultz filed suit against 

Halko claiming Halko breached a contract with his wife made 

for their benefit. The District Court enjoined Halko from 

selling or disposing of the land. 

In October, 1981, Schweitzer attempted to exercise his 

option agreement with Halko. Halko refused as the temporary 

restraining order precluded any conveyance of the land which 

was the subject of the option agreement. Schweitzer sued 

Halko as a result of this breach. 
The lawsuit brought by Hastings and Schultz was 

eventually settled in March, 1984. An order was entered by 

stipulation of parties concluding the action. The order 

provided that all Wills executed by Andrew Halko subsequent 

to 1977 were legally void, the order further provided that 

the disputed land would pass to Schultz and Hastings 

following Halko's death. 

Halko died in July, 1984, and his estate succeeded him 

as the defendant in the suit initiated by Schweitzer. 

In 1985, the Estate of Halko filed a third party 

complaint (which it later amended) against Clarke Dawson 

alleging malpractice, breach of contract, and breach of 

indemnity in this matter. Halko's estate contended that 

Dawson exposed Halko to liability either to Schweitzer or to 

Schultz and Hastings when he drafted the option agreement. 

The Estate further contends that Dawson committed malpractice 

in: drafting the March 9, 1981 Will and omitting the devise 

to Schultz and Hastings, and allowing Halko to exercise the 

revised Will. 

Dawson moved for summary judgment claiming that the 

estate's claims were barred by the statute of limitations. 

The court received briefs from both parties as well as 

affidavits and other materials. 

In June, 1987, the District Court filed an order 

granting the motion for summary judgment. The court held 

that the claims were barred by the statute of limitations 

finding, as a matter of law, that Andrew Halko had knowledge 

of Dawson's acts more than three years before the third party 

complaint was filed by his estate. In the alternative, the 

District Court found that Halko had been in - pari delicto with 

Dawson, as to all matters at issue. The court held that 

Halko's estate is charged with Halko's knowledge and as such 
the claims are barred on grounds of - in pari delicto. From 

this order, plaintiffs appeal. 

In pursuing a third party complaint against Dawson, the 

estate stands in the shoes of the decedent Halko. Section 

27-1-501, MCA. As such, Halko's knowledge concerning the 

alleged malpractice on the part of Dawson is imputed to his 

estate. 

As the District Court correctly noted all of the counts 

of the original and amended complaint, regardless of how they 

are described sound in legal malpractice. The specific 

statute of limitations for legal malpractice is 5 37-2-206, 

MCA, which provides: 

27-2-206. Actions for legal malpractice. An 

action against an attorney licensed to practice law 

in Montana or a paralegal assistant or a 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 3 years after the plaintiff 

discovers or through the use of reasonable 

diligence should have discovered the act, error, or 

omission, whichever occurs last, but in no case may 

the action be commenced after 10 years from the 

date of the act, error, or omission. 

Recently, this Court construed 5 27-2-206, MCA, in 

Schneider v. Leaphart (Mont. 1987), 743 P.2d 613, 616, 44 

St.Rep. 1699, 1702, where we stated: 

. . . 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 27-2-206, MCA. 

It is the knowledge of facts essential to the cause of 

action for legal malpractice, not knowledge of legal theories 
upon which an action is based that determines when a cause of 

action for legal malpractice accrues. Burgett, 663 P.2d at 

334, 40 St.Rep. at 751. 

In the immediate case, the acts complained of were 

committed by Dawson considerably more than three years prior 

to the bringing of this action. Dawson drafted and had Halko 

execute a "formal" option agreement with Schweitzer on 

November 15, 1980. Clearly, Halko was cognizant of the facts 

constituting the alleged wrong as he was an active 

participant in those acts. For purposes of the summary 

judgment motion, any claim based on this allegedly wrongful 

act expired in November, 1983. 

The second alleged wrongful act occurred when Dawson at 

Halko's request drafted the subsequent Will which Halko 

executed March 9, 1981, deleting the devises to Emily 

Hastings and Genevieve Schultz. Again, Halko almost 

certainly had knowledge of the facts that eventually gave 

rise to his estate's cause of action, at the very least he 

had sufficient information to allow him to discover the facts 

through the use of reasonable diligence. The very latest 

Halko became aware of Dawson's alleged act of malpractice in 

redrafting the Will was April 21, 1981, when Halko was sued 

as a result of this new Will by Hastings and Schultz. For 

the purposes of the summary judgment, any claim resulting 

from the allegedly wrongful act of redrafting Halko's Will 

expired long before Halko's estate brought the immediate 

action. 

As we have found, the plaintiffs' action is barred by 

the statute of limitations (5 27-2-206, MCA) we need not 

address the - in pari delicto issue. 

Affirmed. 

We Concur: