No. 89-514 

IN THE SUPREME COURT OF THE STATE OF MONTANA 

1990 

LEONARD and BONNIE BOLES, 

Plaintiffs & Appellants, 

RICHARD S. SIMONTON and McDONOUGH, COX 

and SIMONTON, P.C., a Nontana Corporation, 

Defendants & Respondents. 

APPEAL FROM: District Court of the Thirteenth Judicial District, 

In and for the County of Yellowstone, 

The Honorable Russell K. Fillner, Judge presiding. 

COUNSEL OF RECORD: 

For Appellant: 

Lloyd E. Hartford, Billings, Montana 

.For Respondent: 

Ira Eakin, Billings, Montana 

Herbert I. Pierce 111, Billings, Montana 

Kelly Jean Beard, Billings, Montana 

Submitted on Briefs: February 9, 1990 

Decided: April 25, 1990 
Justice Fred J. Weber delivered the Opinion of the Court. 

This appeal arises from an order by the District Court, 

Thirteenth Judicial District, Yellowstone County, Montana, granting 

summary judgment in favor of defendants. Plaintiff appeals. We 

affirm. 

The issues presented for our review are: 

1. Whether the District Court erred in granting summary 

judgment in favor of defendants by concluding that the cause of 

action was time-barred. 

2. Whether the District Court erred in granting summary 

judgment in favor of defendants by concluding that defendants owed 

no duty to the client in respect to certain alleged errors. 

The Lers owned a service station and garage in a small town 

in eastern Montana. In 1978 they began negotiations to sell this 

business to Mr. and Ms. Boles. The parties agreed to a sale price 

of $65,000, to be paid over a term of ten years pursuant to a 

contract for deed. The parties agreed that an attorney should 

draft the contract. Attorney Richard Simonton was retained for 

this purpose. He testified by deposition that he represented both 

parties. Each party paid half of the fees. 

On September 22, 1978, the parties met in the offices of 

Richard Simonton and signed the contract for deed. The contract 

signed by the parties contained a default clause, which provided: 

And in case of the failure of said Parties of the Second 

Part to make either of the payments, or interest thereon 

or any part thereof or perform any of the covenants on 
their part hereby made and entered into, then at the 

election of the First Parties, the whole of said payments 

and interest provided for herein, shall become 

immediately due and payable and this Contract shall at 

the option of said First Parties be forfeited and 

determined by giving to said Second Parties ninety (90) 

days notice in writing of the intention of the First 

Parties to cancel and determine this Contract, setting 

forth in said notice the amount due on said Contract and 

the time and place when and where payment can be made by 

said Second Parties. 

IT IS MUTUALLY UNDERSTOOD AND AGREED by and between the 

Parties to this Contact that ninety (90) days is a 

reasonable and sufficient notice to be given to said 

Second Parties in case of failure to perform any of the 

covenants on their part hereby made and entered into, and 

shall be sufficient to cancel all obligations hereunto 

on the part of the said First Parties and fully reinvest them with all right, title and interest hereby 

agreed to be conveyed, and the Parties of the Second Part 

shall forfeit all payments made by them on this Contract 

and any right, title and interest in all buildings, 

fences or dther improvements whatsoever, and such 

payments and improvements shall be retained by the said 

Parties of the First Part, in full satisfaction and as 

a reasonable rental for the property above described and 

in liquidation of all damages by them sustained and they 

shall have the right to re-enter and take possession of 

the premises aforesaid. IT IS FURTHER AGREED that the 

Parties of the First Part in addition to all remedies set 

forth herein, shall have all other remedies available to 

them at law and in equity. 

The Boles began having difficulty making the monthly payment, 

which was in the amount of $624. The Boles missed payments due on 

the first day of December 1982, January 1983, and February 1983. 

On February 10, 1983, Ms. Ler sent the Boles a "Notice of Intent 

to Cancel and Debermine Contract." This notice stated that the 

Boles had failed to make the payments due on January 1, 1983 and 

February 1, 1983. It declared that the entire balance of 

3 
approximately $37,600 was accelerated and due within 90 days. 

On April 25, 1983, the Boles filed a court action seeking to 

enjoin Ms. Ler from accelerating the balance due under the 

contract. The District Court granted summary judgment in favor of 

Ms. Ler. That order was appealed to this Court and affirmed. 

Boles v. Ler (1986), 222 Mont. 28, 719 P.2d 793. Ms. Ler 

eventually repossessed the property. 

In January 1986, the Boles filed suit against Mr. Richard 

Simonton, alleging negligence in drafting the contract for deed. 

They alleged the contract should have contained a I1saving clauseu 

providing a grace period allowing the Boles ninety days to make up 

any late monthly payments, prior to acceleration of the balance due 

under the default clause. By deposition Mr. and Ms. Boles state 

that the Lers agreed that Boles should have ninety days to make up 

late payments. However, Ms. Ler states by deposition that she did 

not remember any such agreement. 

The complaint also alleged damage from Boles1 inability to 

obtain a loan to pay the accelerated balance due because of an 

error in the legal description of the property in the contract for 

deed. In August 1986 the Boles amended the complaint to include 

an allegation that Mr. Simonton failed to ensure that a preliminary 

title report was obtained. The Boles amended their complaint a 

second time, in September 1987, to include the law firm of 

McDonough, Cox and Simonton. 

The defendants made various motions to the District Court, 
including a motion to dismiss because the statute of limitations 

had run. These motions were supported with memorandum, depositions 

and affidavits. The District Court, in considering matters outside 

the pleadings, treated the motions as a motion for summary judgment 

pursuant to Rule 12(b), M.R.Civ.P. The District Court concluded 

that as to the alleged negligence in the drafting of the contract 

for deed and the alleged omission of the saving clause, the 

dispositive issue was when the cause of action for attorney 

malpractice began to run. The court determined the cause of action 

accrued when the contract was signed. The contract was signed in 

September 1978, and the present action was not filed until January 

of 1986, over seven years later. The court granted summary 

judgment in favor of defendants, concluding that the suit was timebarred. As to the issues involving the error in the legal 

description of the property, and the preparation of a preliminary 

title report, the court concluded that Mr. Simonton was only hired 

to draft the contact for deed; thus he owed the Boles no duty in 

respect to these alleged errors. The Boles urge that the District 

Court erred in granting summary judgment. 

I 

Whether the District Court erred in granting summary judgment 

in favor of defendants by concluding that the cause of action was 

time-barred. 

Summary judgment is appropriate when the pleadings, 

depositions, answers to interrogatories, and admissions on file, 
together with the affidavits, if any, show there is no genuine 

issue as to any material fact and that the moving party is entitled 

to judgment as a matter of law. Rule 56 (c) , M.R.Civ. P. ; Lorash v. 

Epstein (Mont. 1989), 767 P.2d 1335, 1337, 46 St.Rep. 151, 153. 

Summary judgment is an appropriate means of disposing of claims 

barred by the statute of limitations. Mobley v. Hall (1983), 202 

Mont. 227, 657 P.2d 604; Brabender v. Kit Manuf. Co. (1977), 174 

Mont. 63, 568 P.2d 547. 

As the District Court noted, and we agree, the alleged 

negligence in drafting the contract is based on a theory of 

attorney malpractice. The dispositive issue in the present case 

is when the statute of limitations commenced to run. 

In analyzing this issue, we note that traditionally the 

general rule has been that a cause of action for attorney 

malpractice accrues when the negligent act or breach occurs, not 

when it is discovered (the occurrence rule) . 54 C. J. S. Limitations 

of Actions § 172 (1987). Other theories include: 1) the statute 

of limitations begins to run when the client has sustained injury 

or damage (the damage rule); 2) the statute begins to run when 

the negligent act is discovered or should have been discovered (the 

discovery rule). Annotation, "When Statute of Limitations Begins 

to Run upon Action Against Attorney for Malpractice" 32 ALR 4th 260 

§ 2 (1984). 

Montana has statutorily adopted the discovery rule, stated in 

5 27-2-206, MCA, which provides: 
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 he 

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. 

The District Court concluded that the cause of action accrued 

when the contract was signed because Boles read the contract at 

that time; thus they knew or through the use of reasonable 

diligence should have discovered the omission at that time. 

Because this occurred more than three years prior to suit being 

filed, the suit was time-barred. 

We interpreted the above mentioned statute in Burgett v. 

Flaherty (1983), 204 Mont. 169, 173, 663 P.2d 332, 334, stating: 

As a matter of law, what is critical in determining when 

a legal malpractice action accrues is knowledge of the 

facts essential to the cause of action, not knowledge of 

the legal theories upon which an action may be brought. 

In Bursett the attorney had stipulated to the entry of a 

dissolution decree within twenty days of service of process and 

contrary to client's wishes. Noting that the client had knowledge 

of these facts, triggering the statute of limitations, we affirmed 

summary judgment as to that alleged negligent act. 

In four recent cases, this Court again affirmed summary 

judgment in favor of the attorney on the basis that the statute had 

run. In Schneider v. Leaphart (1987), 228 Mont. 483, 743 P.2d 613, 
the client became aware of the attorney's alleged negligence in 

including a maintenance provision in a property settlement when an 

accountant told him the provision was unnecessary; it was the 

discovery of this fact that triggered the statute, not the later 

discovery that he was damaged. In Peschel v. Jones (Mont. 1988), 

760 P.2d 51, 45 St.Rep. 1244, the client alleged negligence in the 

attorney's handling of negotiations regarding financial 

difficulties. However, the client's knowledge of facts giving rise 

to this claim had triggered the statute and the suit was timebarred. In McMillan v. Landoe, Brown, et al., P.C. (Mont. 1988), 

760 P.2d 758, 45 St.Rep. 1662, the District Court concluded that 

the cause of action against an attorney accrued when the client who 

purchased property at a sheriff's sale was informed of a suit 

against him by a debtor challenging the validity of the sale. 

Similarly, in Schweitzer v. Estate of Halko (Mont. 1988), 751 

P.2d 1064, 45 St.Rep. 611, we affirmed summary judgment in favor 

of the attorney where the client knew of and participated in the 

attorney's alleged negligent drafting of a new will containing an 

option agreement on real estate. Summary judgment in that case was 

granted both on the basis that the suit was time-barred and because 

the client was in pari delicto with the attorney. 

In the present case, the Boles state they did not have actual 

knowledge of facts essential to the cause of action, that is, they 

did not know that the contract did not in fact contain the saving 

clause. Thus the issue is whether they should have discovered the 
omission at the time they signed the contract, or stated 

differently, whether they should be held to have had constructive 

knowledge of the omission at the time of signing. 

By deposition all parties acknowledge that they read the 

contract before signing it. Mr. Boles states that he did not 

understand the contract. However, none of the parties recall 

asking questions or requesting clarification of any part of the 

contract. In Mr. Simontonls deposition he states that he does not 

remember explaining the contract in detail. 

We conclude that the Boles should have discovered that the 

contract for deed' did not contain the saving clause at the time 

they signed the contract. The default clause, as here drafted, is 

not complex or beyond the understanding of a lay person. The 

absence of a saving clause could have been discovered by the Boles 

through the use of reasonable diligence. The record discloses that 

the Boles read the contract before signing and did not ask for any 

explanations. Although they now claim they did not understand the 

contract, and that they believed it contained the desired clause 

when they signed it, we conclude that in the present case, the 

Boles must be charged with knowledge of what they signed. The 

plain language of the contract was clear and not technical, and the 

omission of the gaving clause could have been discovered by the 

Boles by the use of reasonable diligence. 

The Nebraska Supreme Court faced a similar issue in 

Interholzinger v. Estate of Dent (Neb. 1983), 333 N.W.2d 895. 
Although the attorney, in selling the client's business, was to 

exclude a certain piece of private land, he neglected to do so. 

The clients, a father and son, both signed a listing agreement 

which included the private land among the assets of the business. 

The son, although capable of reading the agreement, did not do so. 

The Nebraska court applied the relevant statute of limitations 

which provided that an action for attorney malpractice commenced 

when the negligent act occurred; however, commencement was deferred 

if the cause of action was not discovered and could not reasonably 

have been discovered within the limitations period. In applying 

this rule the court concluded that the son, who had not read the 

agreement, was "charged with knowledge of its contents[.]" 

Interholzinser, 333 N.W.2d at 899. See also Nichols v. Ach (Neb. 

1989), 447 N.W.2dS220. 

The Boles contend that the statute of limitations did not 

begin to run until they realized they had been damaged by the 

alleged professional negligence. They contend it was not until 

they received the notice from Ms. Ler in February 1983 of her 

intent to cancel and determine the contract, that they realized the 

contract did not contain the saving clause. However, the rule that 

the statute is not triggered until the client is damaged has been 

expressly rejected in Montana, as in conflict with the statute. 

Schneider, 743 P.2d at 616. Moreover, our previous discussion 

forecloses any argument that the notice from Ms. Ler should be the 

point of discovery. 
We affirm the District Court's granting of summary judgment 

in favor of defendants on the basis that the suit was time-barred. 

I1 

Whether the ~istrict Court erred in granting summary judgment 

by concluding that defendants owed no duty to the client in respect 

to certain alleged errors. 

The ~istrict Court granted summary judgment in favor of 

defendants in respect to the alleged error in the legal description 

and the alleged negligence in failing to ensure that a preliminary 

title report was prepared. The court determined that the Boles had 

failed to establish that Mr. ~imonton was retained for any purpose 

other than the drafting of the contract for deed. Thus he owed no 

duty to the Boles in regard to other matters. 

The Boles contend that Mr. Simonton continued his legal 

representation of- them subsequent to drafting the contract for 

deed, noting that Mr. Simonton sent a letter Mr. Ler advising him 

to place the Abstract of Title in the escrow account. They contend 

Mr. Simonton had a duty to ensure this was done. 

"In any professional negligence action, the plaintiff must 

prove that the professional owed him a duty[.]I1 Carlson v. Morton 

(1987), 229 Mont. 234, 238, 745 P.2d 1133, 1136. Absent a finding 

that Mr. Simonton was retained for services other than preparing 

the contract, the attorney had no duty to monitor the activities 

of his client. Lorash, 767 P.2d at 1338. We agree with the 

~istrict Court that Boles have failed to present facts 
demonstrating that Mr. Simonton continued to represent the Boles 

subsequent to drafting the contract. Further, Montana has not 

recognized the llcontinuous representationn theory. Schneider, 743 

P.2d at 616. We conclude that the District Court was correct in 

determining there were no genuine issues of material fact in 

respect to the extent of Mr. Simontonls legal representation and 

that he owed no duty to the Boles in respect to these alleged 

errors. 

We affirm the District Courtls granting of summary judgment 

in favor of defendants. 

Affirmed. 

We Concur: /f 

Justices 
Justice William E. Hunt, Sr., dissenting: 

I dissent. A lawyer is more than a scrivener. He is a 

professional and a counselor upon whose advice a client, whether 

skilled in the law or not, should be able to depend. If the client 

must know as much as the lawyer in order to oversee the lawyer's 

work and discover his errors, then the lawyer is nothing more than 

a scrivener. 

When a client, patient, taxpayer or builder comes to rely upon 

a professional for services or advice he most often cannot discover 

that a negligent act has occurred until damages arise. I do not 

believe that the plaintiffs here were required to know that the 

legal jargon cited by the majority did not constitute a savings 

clause. In both paragraphs cited by the majority, the words 

"ninety (90) daystv were used. When they read those paragraphs, the 

plaintiffs, who were lay persons, could reasonably have believed 

that they had a period of grace in which they could remit any late 

payments. 

Plaintiffs could not reasonably have discovered the omission 

in the contract until the damages occurred, that is, when they lost 

their property. They should have an opportunity to present their 

case to the jury.