# FILED April 8, 1998 Cecil W. Crowson Appellate Cou rt Clerk IN THE COURT OF APPEALS OF TENNESSEE,

AT NASHVILLE

_______________________________________________________ ) CARVER PLUMBING COMPANY , ) Davidson County Circuit Court INC. , ) No. 95C-2130 ) Plaintiff/Appella

nt. ) ) VS. ) C.A. No. 01A01-9708-CV-00377 ) MARTHA CONE BECK , ) ) Defendant/Appellee. ) )

______________________________________________________________________________ From the Circuit Court of Davidson County at Nashville. Honorable Walter C. Kurtz, Judge
John L. Whitfield, Jr. , MOODY, WHITFIELD & CASTELLARIN, Nashville, Tennessee Attorney fo

r Plaintiff/Appell

ant.
Winston S. Evans , EVANS, JONES & REYNOLDS, Nashville, Tennessee Attorney for Defendant/Appellee.

OPINION FIL

ED: REVERSED AND REMAN DED FARMER, J. HIGHERS, J. : (Concurs) LILLARD, J. : (Concurs)Plaintiff Carver Plumbing Company, Inc. (Carv er Plumbing), appeals the trial court’s order entering summary judgment in favor of Carv er Pl umb ing’ s fo rme r at tor ney, Defendant/Appellee

Martha Cone Beck (B eck). We reverse the trial court’s judgment based on our conclusion that a

genuine issue of material fact exists as to whether

Carver Plumbing’ s action against Beck is barred

by the one-

year statu te of limitations app

licable to lega

l malpractice ac

tions.

For purposes o f these sum mary judgment p roceedings , the following facts were undisputed. In March 1993, Carver Plumbing retained Beck to collect money it wa s owedfor work performed

on a renovation project

at the International Plaza building in Nashville. Premier Builders
was the general co ntractor on the renovat ion project , and Carver Plumbing was one of the subco ntracto rs which performed work on the project pursuant to a subcontract with Premier Builders. The International Plaza building was owned by Equitable Pacific Partners. After Carver Plumbing performed the work as agreed, Premier Builders failed to pay it the balance dueunder the subcontract. Consequently, Carver Plumbing retained Beck.

Robert Carver, the pre

sident of Ca

r ver Plumbing, initially met with Beck when he hiredher. During this meeting, Carver told Beck that he

wanted to

fil e a l ien agai nst the pro pert y. This was the first time that either Carver or Carver Plu

mbing had found it necessary to file a mechanic’s lien, and Carve r’s knowledge of such liens was limited. Throughout Beck’s representationof Carver Pl umbing, Car ver c omm uni cat ed w ith Beck ’s a ssi sta nts . Pr ima ril y, Carver dealt with Beck’s son and legal assistant, Bill Beck.

After being retained by Carver Plumbing, Beck prepared and filed a “Notice for Furnisher’s Lien” on March 15, 1993, in which Beck notified both Equitab l e Pacific Partners and P remier Builders that Carver Plumbing was claiming and holding a mechanic’s lien on t h e International

Plaza building in the amount of $17, 000. T he notice, which was signed by Robert Carver, erroneously indicated that Carver Plumbing was claiming a mecha nic’s lien p ur suant to TennesseeCode Annotated section 66-1-101 et seq . T he statutes establishing Carver Plumbing’s right to a mechanic’s lien actually were codified at section 66-11-101 e t seq . See T .C.A. §§ 66-11-101 to 66-11-208 (1993).In Ap ril or May of 1993, Robert Carver became upset when he hea rd that other subcontractors were collecting money for their work on the project. When Carver confron

ted Bill Beck about this development, Carver w as assure d that Beck was d oing every

thing she could to collect the money owed t o Carver Pl umbing. So metime in 1 993, altho ugh it is no t clear when, Carver and Bill Beck

engaged in a heated argument over Beck’ s handling of Carver Plumbing’s case. During this argument, Bill Beck advised Carver to hire another lawy er if h e d id not like the way Beck was handling the case. Carver consulted another attorney but the second attorne y advised Carver to stay with hi

s original att

orney if possible because she had all of the case records and documents. When Carver called Beck’s office to request the Carver Plumbing file, Bill Beck, who by then had calmed down, asked Carver to return to the office to talk. Thereafter, Beck continued to represent Carver Plumbing.

Under the Tennessee st

atute relative to

mechanic’s lien

s, Beck had ninety

(90 ) days from the time of

filing notice of the lien in which to file suit to enforce the lien. See T.C .A
. § 66-11-115(c) (1993) (providing that mechanic’s lien shall continue for 90 d ays from date of notice andthat, if suit for

enforcement is brought within 90-day period, lien shall continue until termination of suit). Despite this statute, Beck failed to file a suit to enforce t he lien agains t the building’s owner, Equitable Pacific Partners, within the 90-day period.

In November

1993, Beck filed a lawsuit on behalf of Carver Plumbing against the project’s general contractor, Premier Builders. That same mon th, an other one of Beck’s legal assistants sent a copy of the complaint with a tra nsmittal letter to Robert Carver. The face of the complaint indicated that the only entity being sued was Premier Builders and, in fact, the complaint didnot even mention Eq uit able Pacific Partners. In May 1994, a defa ult judgment was entered ag a inst Premier Builder

s. Ultimately

, the default judg

ment proved to be u

ncollectible bec

ause Premier Builders filed for bankruptcy.

On January

19, 1995, Beck wrote a letter to Robert Carver in which she advised him of the status of his ca

se. As pertinent to

this lega l malpractice action, Beck’s letter contained the following paragraph:It is my understanding from talking with Bill [Beck] that you did not wish to bring suit against Equitable Pacific Partners because a relative of yours worked fo

r them. Based on this desire we did not include Equitable Pacific in the law

suit and the time has now passed in which we can now file suit against them.
According to Carver, his rec eipt of this letter w

as the first time

he realized (1) that Carver Plumbing hada potential lawsuit against Equitable Pacific Partners and (2) that Beck had failed to file such a lawsuit within the time required by law.

On July 5, 1995, Carver Plumbing filed this action for legal malpractice against B eck in which it asserted

that Beck was ne

gligent in fail

in g to file a lawsui

t against Equitab

le Pacific Partners within the statute of limitations for enforce m ent of the mechanic’s lien. After filing her answer, Beck filed a motion for summary judgment in which she contended, inter alia , that Carver Plumbing’s action was barred by the one-year statute of limitations applicable to legal malpractice actions. See T.C.A. § 28-3-104(a)(2) (Supp. 1990). In moving for summary judgment, Beck submitted the affidavits of herself and Bill Beck, which averred that Beck did not f

ile a suit agains

t Equitable Pacific Partners to enforce the lien because

Robert Carver ins

tructed them not to

file such
a su it. According to

the Becks, Carv

er did not wish to sue

Equitable Pacific

Partners b ecaus e Carver’s brother-in-law worked for the partnership as manager of the Internati onal Plaz a building.

In his opposing af

fidavit an d deposition, Rober t Carver denied e

ver giving the

se instructions to Beck

or to any of her assistants, and he averred that he instead instructed B eck to sue “whoever had to be sued” to collect the money. Carver was aware that Beck, on

Carver Plumbing’s behalf, filed a lawsuit against Premier Builders in the fall of 1993. Carver also

acknowledged that the documents filed in the lawsuit revealed that the only defendant was Premier Builder s and, further, that Carver

received no doc

uments indicating

that a suit had bee

n filed against

the building’s owner, Equitable Pacific

Partners. Carve

r explain ed, however , that he was not even aware that Carver Plumbing had a pote

ntial lawsuit aga

inst Equitable Paci

fic Partners. This was Carver’ s first experience with filing a mechanic’s lien, and Carver’s understanding of such liens was limited to the knowledge that the claimant was required to “[j]ust put a lien on the property and sue.” Carver relied
on Bill Beck’s representations that Beck w as d oing everything she could to pursue Carver Plumbing ’s cla im. Carver also relied on Beck’s professional knowledge and expertise to pursueCarver

Plumbing’s claim against the appropriate parties. Carver maintained that he did not learn of Beck’s failure to timely

pursue a potentia

l claim against E

quitable Pacific

Partners u

ntil Carver received Beck’s letter of January 19, 1995. Specifically , Carver testified that
Again, I was to

l d everything was being done that could be done. I didn’t know.

You know, I did

n’t know about a lawsuit against [Equitable Pacific Partners]. I thought -- I didn’t know y ou could file a lawsuit

against them. I

was relying on [Beck] to represent me to do whatever it took to collect my money.

Based on the foregoingevidence, the trial court granted Beck’s motion for summary judgment, ruli ng that

Carver Plumbing’s legal malpractice action was untimely bec ause Robert Carver either knew or sh

ould have known as

e arl y as 1993 tha

t Beck had faile

d to file a suit to enforceth e li en against Equitable Pacific Partners within the time required by law. This appea l followed.

In reviewing the t rial court’s dec

ision, we are re

minded that su mmary judg ment is appropriate

on ly when the parties’ “pleadings, depositions, answers to interroga tories, and admissions on file, together with the affidavits, if any, show that there isno genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” T.R.C.P. 56.04. In determining whether or not a genuine issue of materi al fact ex ists for purposes of summary judgment, the trial court is required to consider the q uestion in

the same manner as a motion for directed verdict made at the close of the plaintiff’s proof. Byrd v. Hall, 847 S.W.2d 208, 210 (Tenn. 1993). That is, “the trial court must take the strongest legitimate view of the evidence in favor of the nonmoving party, allow all reasonable infe r ences in favor o

f that party

, and discard all countervailing evidence.” Id . at 210-11.

Our review of the trial court’s decision also is guided by a series of Te n n essee Supreme Court decisions, which have developed a specific formulation o f the “disc overy rule” applicable

to the issue of when a legal malpractice action accrues

for statute of limit

ations purposes. See Carvel

l v. Bot toms , 900 S.W.2d 23 (Tenn. 1995); Chambers v. Dillow , 713 S.W.2d 896 (Tenn. 1986); Security Bank & Trust Co. v. Fabricating, Inc. , 673 S.W.2d 860 (Tenn. 1983), cert. denied , 469 U.S. 1038 (1984); Ameraccount Club, Inc. v . Hill , 617 S.W.2d 876 (Tenn. 1981). In the m ostrecent

of these deci s ions, the supreme court concluded that the “legal malpractice discovery rule” is composed of two dis

tinct elements: (1 ) th e pla intiff must have suffered a legally cognizable or actual injury as a result of the defendant’s negligence; and (2) the plaintiff either must have known
or in the exercise of reason able dil igence should have known that the injury was caused by the defendant’s negligence. Carvel l v. Bot toms , 900 S.W.2d at 28.

In the present case

, the parties do not

dispute that Carver Plumbin

g suffered a le

gally
co gnizable injury in June 1993, when the 90-day time period for filing a suit to enforce the mechanic’s lien expired. See, e.g. , Smith v. Petkoff , 919 S.W.2d 59 5, 597 (Tenn. App. 1995) (holding that plaintiff suffered “actual injury” or “lega lly cognizable injury” on dat e st atute of limitations ran as to underlying claim). Accordingly , this appeal focuses on the second element of the discovery r

ule andrequires this court to determine only one issue: whether Robert Carver knew
or in the exercise of reasonable diligence should have known more than one year prior to filing the present lawsuit that Carver Plumbing suffered an injury as a result of B eck’s negligence.

In discussing this se

cond element,

the supre me court has indicated that the “knowledge” component of the discovery rule may be supp orted by ev idence of actual or constructive knowledge of the injury. Carvel l v. Bot toms , 900 S.W.2d at 29. As a general rule, the one-year statute of limitations for legal malpractice actions begins to run when t he plaintiff has actual knowledge that he has been injured as a result of the defendant’s brea ch of the appropriate legal standard. Id . Under the theory of constructive knowledge, however, the statute of limitations may begin to run at an earlier date if the evidence shows that the plaintiff is aware of facts sufficient to puta reasonable person on notice tha t he has suffered an injury as a result of the defendant’ s wrongful conduct. Id
.

In Gatlinburg Summit Horizontal Prop erty Regime Council of Co-Owne rs, Inc. v. Jarvis , No. 03A01-94 04-CV-00135 , 1995 WL 10343 (T enn. App. Jan. 11, 19

95), this court simil

arly
was faced with the iss

ue of when the sta

tuteof limitations for legal malpractice begins to run where the alleged injury

is the attorney ’s failure to file an action within

the applicable st

atute of limitations. In that case, the pla

intiff’s attorne

ys failed to

file a suit for con

struction defec

ts against a

n architecturalfirm within

the applicable th

ree-yea r statute of limitat

ions. See T.C.A. § 28-3-105(1)(Supp. 1989). When the suit was filed ag ainst the archite

ctural firm in fe

deral court, the

plaintiff did notknow that the suit wa

s untimely

because one of the plaintiff’s attorneys erroneously advised the plaintiff that the statute of

limitations for con

struction defec

ts was four y

ears i nstea d of three. Gatlinburg

Summit , 1995 WL 10343, at *1. The plaintiff first learned that the suit m ight be untimely when the architectural firm filed its answer asserting the affirmative defense ofthe threeyear statute of limitations. Id . The untimeliness of the suit was confirmed when the federal district court granted summar

y judgment t

o the architecturalfirm based on this defense. Id . Sometime later, the plaintiff brought

a suit for legal malpractice against its attorneys base d on their failure to t

imely file the suit for construction defects against the architectural firm. Id. , at *2.

In holding that the statute of limitations for legal malpractice began to run when the architecturalfirm filed its

answer asserting the statute of limitations defense in the underlying action, this court reasoned:

Our study of the various cases dealing with thequestion under consideration here leads us to the conclusion that each case must be determinedindividually

and under its o

wn p eculiar circums

tances. Stated differe ntl y, there is no rule th at can be univer

sally applie

d to determine when the statute of limitations in legal malpractice actions commences to run.

. . . it would appear that the [plaintiff] in this case knew or should have known, by the exercise of reasonable care and diligence, that the alleged malpr actice had occurred when the [architectural firm] in the FederalDistrict Court case filed [its] answer asserting the affirmative defense of the statute of limitations. . . . We are of the opinion and hold thatthe statute of limitations began to run on the date th

e [architectura

l firm] in the Federal District Courtanswered asser

ting the affirma

ti ve d efense of the three-year statute of limitatio

ns. At that time, (1) the attorneys had committed negligence, (assuming that the allegations of negligence are true for the purposes of this appeal) (2) the client had been injured by the negligence

because the statute had

expired . . . , and (3) the [plaintiff] haddiscov e red, or in the exercise of reasonable care and diligence, should have discovered, the existence of the facts constituting negligence

and injury or damage caused by the attorneys’ neg

ligence. In C a ledonia Leasing and Equipment Co., Inc. v. Armstrong, et al , 865 S.W.2d 10 (Tenn. App. 1992), we find the following t eaching:

A cause of action

for legal malpractice

accrues andthe statute of limitations commences to run when (1) the attorn ey has committ ed neglige nce, (2) the client has beeninjuredby that negligence, and (3) the client discovers, or in the exercise of reasonable careanddiligence, should have discove red the existence of the facts constituting negligence and the injury caused by the attorney’s neg

ligence. (citations omitted). In the final analysis, we are of the opinion that all the requirements

of Caledonia were met when the [plaintiff] learned that th e [archi tectural firm was] relying on the three-y ear statute of limitations as a bar to . . . [the plaintiff’s] action.
Gatlinburg Summit , 1995 WL 10343, at *3.

After carefully reviewing the evidence pre sented in this case, we c onclude th at a genuineissue of material fact exists as to whether Robert Carver knew or should have known more than one year

prior to filing this legal malpractice action that Beck had committed negligence and that this negligence had caused injury to Car

ver Plumbing. When

viewed in

the light most favo

rable to Carver Plumbing , t his evidence reveals that Carver instructed Beck to sue “whoever had to be sued” to collect the money that Premi er Builders owed to Carv er Plumbin g. Instead of f iling suit to enforcethe lien against

Equitable Pacific

Partners within the

90-day time

limit, Beck later

sued only Premier Builders to reco

ver the debt. Car

ver was not awar

e, nor did Beck apparen

tly advise Carver, that a suit to enforce the lien could be filedagainst the build

ing’s owner, Eq

uitable Pacific Pa

rtners. Acco rdi ngly, Carver did not question Beck’s decision in the fall of 1993 to sue only Premier Builders and no other party. Carver was rely ing on Beck’s professional know ledge and exper

tise to handle Carver Plumbing’s case

and, until he received Beck’s letter of January 19, 1995, Carver w as unaware that a l awsuit

also could have be

en pursued aga

inst Equitable Paci

fic Partners. Un

der these circumstances,

a genuine issue

of material fac

t remains as to whe

ther Carver kne

w, or in the exercis

e of reasonable dilig

ence should

have known, prior to receipt of the January 19, 1995, letter (1) that Carver Plumbing had a potential lawsuit against Equitable Pacific Partne rs , and (2) that the applicable statute of limitations for filing such a lawsuit had expired.

In reversing the t

rial court’s orde

r granting summ

ary judgme

nt to B eck, we distinguish

the facts of this case from those found in Banton v. Marks , 623 S.W.2d 113 (Tenn. App. 1981). In Banto n v. Marks , the defendant attorneys timely broug ht a cause of action against the driver of the vehicle wh

o caused the wron

gful death of the

plainti ff’ s hu sba nd, but the att orn eys failedto sue the treating hospital or physician within the applicable statute of limitations for medicalmalpra ctice actions. Banton v. Marks , 623 S.W.2d at 114. Thereafter, the plaintiff sued he r

att orn eys for legal malpractice. Id . In affirming the trial court’s grant of summary judgment to the defendant attorneys,

this court first not

ed the legal pre

sumption that the pla

intiff was deeme

d to know the law, i.e. the applicable statute of limitations for medical malpractice actions. Id . at 115. Inasmuch as the plaintiff knew that the defendants had not filed a medical malpractice action on the date that the statute

of limitations expired, we held that the plaintiff either discovered or reasonably should have discovered the attorneys’ neglige nce on that date. Id . at 116. In contrast to the present
c ase, however, the plaintiff in Banton v. Marks knew that she had a cause of action against the hospital and physician

who treated her husband and, in fact, the plaintiff had requ est ed h er at tor neys
on numerous occasions to bring a medical malpractice action against these parties. Id . at 114. Here,
even if we presumed that Car ver was aware of

the statutory

time limit for enfor

cing the lien, thi

s knowledge would have been meaningless absent the acc ompanying knowledge that Carver Plumbing hada right of actio

n against Equita

ble Pacific Partn

ers under the sta

tute, a knowle

dge Carve r disavowed having until receipt of Beck’s January 19, 1995, letter.

For similar reasons, we reject Bec k ’s contention that

Robert Carver ha

d at least constructive knowledge of the alleged malpractice at various times throughout 1993, such as when Carve r began expressing dissatisfaction with Beck’s representation of Carver Plumbing or when Carver received copies of court documents indicating that suit had been filed

only against the general contractor, Premier B uilder s. In this regard, we first note that the evidence in the record doe s not make clear whe ther Carver’s dissatisfacti on with Beck’s services preceded or followed the expiration of the 90-day

limitations period f

or filing suit to en

force the lien. I

nasm uch as Car ver Plumbing suffered no legally cognizable injury until the limitations period expired, we question the relevance of any dissatisfaction expressed by Carver p

rior tothe expiration of this period. At most, we believe that this evidence creates a question of fact as to whether Carver should have had notice of Beck’s impending negligence. See, e.g. , Woods & Woods v. Lewis , 902 S.W.2d 914, 917 (Tenn. A pp. 1994) (holding that, de

spite client’s diss

atisfaction with

services of attorney, where client was layman without expertise as to professional standards for attorney s, and was not subject to any startling develop m ent in proceedings which would suggest negligence of his attorne y in handling case, jury question was presented as to whether client knew or reasonably should have known that his defe nse was be ing neglecte d). We also do not thin

k that Carver’s kn

owledge of the l

awsuitagainst

Premier Builders in the fall of 1993 is determinative of the issue of Carver’s knowledge of Beck’s negligence. If, as Carver claims, he was ne ither apprised nor aware prior to January 1995 that Carver Plumbing hada right of actio n against Equitable Pacific Partners, the court documents from the suit against Premier

Builders would no

t necessarily

serve to inform Ca

rver that Beck

negligently had failed to file

a lawsuit again

st Equitable Pacif

ic Partners.

In reversing the t

rial court’s judg

ment, we also feel compelled to expound upon the legal presumption that “

everyone is deemed

to know the law.” Banton v. Marks , 623 S.W.2d at 115. In Banton v. Marks , we applied this presumption to hold that a legal malpractice plaintiff is deemed to know the statute of limitations for the underlying action in which the attorney rep resented t he plaintiff. Id . We acknowledged, however, that this legal presumption was not a “weighty” one. Id
. Sig nif ica ntl y, this presumpti on was mentioned but apparently was not applied in Gatlinburg Summit , where the plainti ffs were erron

eously advis

ed by one of

their attorneys as to the

length of the applicable statu

te of limitations. I

n our view, the foregoi ng legal presumption also does not apply to the question of whether a plai ntiff has a p otential cause of action against a particular defendant. Such a question invariably implicates both legal and factual considerations, and it is for the determination of

this que stion that a plaintif f consults and rel

ies upon an attorne

y in the first insta nce. We conclude, therefore, that Carver’s presumed knowledge of the 90-day limitations period, by itself, is not sufficient to insulate Beck from liability in this case.

In her a nsw er brief, Beck has raised an additional issue as to whether Carver Plumbing’s re c overy shoul d be limited to $2,000

in the event that its

suit for legal ma

lpractice is successful on remand. Inasmuch as the trial court did

not rule on this issue

, we decline to ad

dress this issue on appeal. “This court, being a court of errors, cannot review issues not pre sented and ruled upon by the trial court.” King v. Now Invs., Inc. , 1987 WL 18891, at *2 (Tenn. App. Oct. 27, 1987) (emphasis added), perm. app. denied (Tenn. Feb. 1, 1988); see also Moss Hotel Co. v. Soil & Material Eng’rs, Inc. , No. 03A01-9102-CV-00 044, 1 991 WL 96576, at *1 (Tenn. App. June 10, 1991), perm. app. denied (Tenn. Feb. 18, 1992).

T he trial court’s order granting Beck’s motion for summary judgment is rev ersed, an d this cause is remanded for further proceedings consistent with this opinion. Costs of this appeal aretax ed t o Bec k, f or w hic h ex ecut ion may i ssu e ifnece ssa ry.

____________________________________ FARMER

, J.

______________________________ HIGHERS, J. (Conc

urs)

______________________________ LILL ARD, J. (Concurs)