Title: Coilplus-Alabama, Inc. v. Johnnie F. Vann and Sirote & Permutt, P.C.
Citation: N/A
Docket Number: 1080618
State: Alabama
Issuer: Alabama Supreme Court
Date: April 16, 2010

REL:04/16/2010 
Notice: T h i s 
o p i n i o n i s s u b j e c t t o f o r m a l 
r e v i s i o n b e f o r e 
p u b l i c a t i o n i n 
t h e 
advance 
s h e e t s o f 
Southern Reporter. 
R e a d e r s a r e r e q u e s t e d t o n o t i f y t h e 
Reporter of 
Decisions, 
Alabama A p p e l l a t e C o u r t s , 300 D e x t e r Avenue, Montgomery, Alabama 36104-3741 ((334) 229¬
0 6 4 9 ) , o f 
any 
t y p o g r a p h i c a l o r o t h e r e r r o r s , i n 
o r d e r t h a t c o r r e c t i o n s may 
be 
made b e f o r e 
t h e o p i n i o n i s 
p r i n t e d i n 
Southern Reporter. 
SUPREME COURT OF ALABAMA 
OCTOBER TERM, 2009-2010 
1080618 
C o i l p l u s - A l a b a m a , 
Inc. 
v. 
Johnnie F. Vann and S i r o t e & Permutt, P.C. 
Appeal from Limestone 
C i r c u i t 
Court 
(CV-02-437) 
BOLIN, 
J u s t i c e . 
C o i l p l u s - A l a b a m a , 
I n c . , a p p e a l s 
f r o m a summary j u d g m e n t 
i n 
f a v o r o f J o h n n i e F. Vann a n d S i r o t e & P e r m u t t , P.C., i n 
t h i s 
l e g a l - m a l p r a c t i c e a c t i o n . We 
a f f i r m . 
1080618 
F a c t s and P r o c e d u r a l 
H i s t o r y 
I n 1998, C o i l p l u s r e t a i n e d 
J o h n n i e F. Vann and t h e l a w 
f i r m a t w h i c h he t h e n w o r k e d , S i r o t e & P e r m u t t , t o a d v i s e i t 
a b o u t 
t h e 
i s s u a n c e 
o f 
$ 8 , 0 0 0 , 0 0 0 
i n b o n d s 
( h e r e i n a f t e r 
r e f e r r e d 
t o as t h e "1999 b o n d s " ) f o r t h e e x p a n s i o n o f i t s 
A t h e n s s t e e l - m a n u f a c t u r i n g 
p l a n t . 
Vann recommended 
t h a t t h e 
1999 b o n d s be i s s u e d t h r o u g h t h e I n d u s t r i a l D e v e l o p m e n t B o a r d 
o f A t h e n s , and he a d v i s e d 
C o i l p l u s t h a t t h e 1999 b o n d s w o u l d 
q u a l i f y as t a x - e x e m p t b o n d s u n d e r t h e r u l e s o f t h e I n t e r n a l 
R e v e n u e S e r v i c e ( " t h e I R S " ) . 
A t t h e t i m e t h e i s s u a n c e 
o f t h e 
1999 b o n d s was 
b e i n g 
d i s c u s s e d , 
Vann was aware 
t h a t a t a x -
e x e m p t - b o n d 
i s s u e i n t h e f a c e amount o f $5,000,000 h a d b e e n 
i s s u e d i n 1984 f o r a C o i l p l u s p r o j e c t ( h e r e i n a f t e r r e f e r r e d t o 
as 
t h e " 1 9 8 4 b o n d s " ) a n d 
t h a t 
t h e 1984 b o n d s h a d n o t b e e n 
r e t i r e d . 
A c c o r d i n g 
t o t h e p a r t i e s , f o r s m a l l - i s s u e b o n d s t o 
q u a l i f y as t a x exempt, t h e t o t a l 
c a p i t a l e x p e n d i t u r e s f o r t h e 
t h r e e 
y e a r s b e f o r e 
t h e b o n d s were i s s u e d and t h e t h r e e 
y e a r s 
a f t e r t h e b o n d s were i s s u e d , c o m b i n e d w i t h t h e amount o f any 
o u t s t a n d i n g 
b o n d s and i n c l u d i n g t h e b o n d s t o be i s s u e d , 
may 
n o t e x c e e d $ 1 0 , 0 0 0 , 0 0 0 . 
See 26 U.S.C. § 144. 
On F e b r u a r y 16, 
1999, 
an a t t o r n e y 
w i t h 
a n o t h e r l a w f i r m s e n t Vann a 
l e t t e r 
2 
1080618 
s t a t i n g t h a t C o i l p l u s h a d o u t s t a n d i n g bonds t h a t h a d n o t b e e n 
r e t i r e d -- i . e . , 
t h e 1984 b o n d s . 
On F e b r u a r y 19, 1 
999, an 
e m p l o y e e w i t h The Bank o f New Y o r k , t h e t r u s t e e f o r 
t h e 1984 
b o n d s , s e n t Vann d o c u m e n t s r e g a r d i n g t h e 1984 b o n d s . 
On M a r c h 
25, 1999, t h e 1999 bonds were 
s o l d t o p u r c h a s e r s . 
L a t e r 
i n 1999, t h e IRS q u e s t i o n e d 
w h e t h e r 
C o i l p l u s ' s 
p r i o r c a p i t a l e x p e n d i t u r e s as r e p r e s e n t e d i n 
t h e 
d o c u m e n t s and 
s c h e d u l e s 
t h a t a c c o m p a n i e d t h e 1999 b o n d s , when a d d e d t o 
t h e 
f a c e amount o f t h e 1999 b o n d s , e x c e e d e d t h e s m a l l - i s s u e amount 
a l l o w e d u n d e r 26 U.S.C. § 144. The i n v e s t i g a t i o n 
a p p a r e n t l y 
c o n c e r n e d o n l y w h e t h e r c e r t a i n 
c a p i t a l e x p e n d i t u r e s w o u l d be 
c o u n t e d t o w a r d t h e $10,000,000 c a p and was n o t f o c u s e d on t h e 
1984 bonds o r t h e e f f e c t o f t h e 1984 bonds on t h e $10,000,000 
cap 
a l l o w e d 
b y 26 U.S.C. 
§ 144. 
C o i l p l u s 
r e c e i v e d a 
f a v o r a b l e 
p r i v a t e - l e t t e r 
r u l i n g 
f r o m t h e I R S . 
Vann 
s e n t 
C o i l p l u s a l e t t e r on S e p t e m b e r 20, 2000, i n f o r m i n g i t 
o f 
t h e 
f a v o r a b l e 
r u l i n g , 
a l o n g 
w i t h a c o p y o f t h e p r i v a t e - l e t t e r 
r u l i n g . 
A p p a r e n t l y t h e IRS c o n t i n u e d i n v e s t i g a t i n g t h e 1999 bonds 
and 
s h i f t e d 
i t s f o c u s t o w h e t h e r t h e i s s u a n c e o f t h e 1999 
bonds i n l i g h t o f t h e o u t s t a n d i n g 1984 bonds 
v i o l a t e d t h e 
3 
1080618 
$10,000,000 c a p , i r r e s p e c t i v e o f t h e c a p i t a l e x p e n d i t u r e s . 
On 
J u l y 16, 2 0 0 1 , an IRS e m p l o y e e s e n t t h e f o l l o w i n g e - m a i l t o 
t h e 
a c c o u n t i n g 
s u p e r v i s o r 
a t 
C o i l p l u s , 
w h i c h 
s t a t e d , i n 
p e r t i n e n t 
p a r t : 
" I 
h a v e b e e n 
d o i n g some 
r e s e a r c h 
on t h e $10 
m i l l i o n Cap r u l e . 
I t seems t h a t t h e $5,000,000 b o n d 
t h a t 
was 
o u t s t a n d i n g 
on 
t h e 
d a t e 
o f 
i s s u e 
( 2 / 2 5 / 1 9 9 9 ) 
o f t h e 
$8,000,000 
b o n d 
h a s 
t o be 
i n c l u d e d 
i n c o m p u t a t i o n 
o f t h e $10 
m i l l i o n c a p . 
( I n t e r n a l Revenue Code S e c t i o n 
1 4 4 ( a ) ( 2 ) ) . 
I F t h i s 
i s t h e c a s e , t h e t o t a l a t t h e t i m e o f i s s u e o f t h e 
s e c o n d b o n d w o u l d be $13,000,000 and t h e r e f o r e , 
o v e r 
t h e c a p . We may be w a s t i n g o u r t i m e t r y i n g t o come 
up w i t h 
o t h e r 
c a p i t a l 
e x p e n d i t u r e s . " 
( C a p i t a l i z a t i o n i n o r i g i n a l . ) 
On J u l y 19, 2 0 0 1 , t h e p r e s i d e n t o f C o i l p l u s f o r w a r d e d and 
c o p i e d 
t h e IRS 
e - m a i l 
t o 
s e v e r a l 
p e r s o n s 
and a d d e d t h e 
f o l l o w i n g : 
" T h i s i s 
an e - m a i l f r o m t h e IRS A u d i t o r . 
I f h e r 
comments 
a r e t r u e , 
t h e n 
C o i l p l u s - A L 
s h o u l d 
h a v e 
n e v e r p u r s u e d a n o n - t a x a b l e b o n d . 
I f t h i s i s t r u e , 
t h e n I w o u l d be c o m p e l l e d t o s a y t h a t i t a p p e a r s 
t h a t 
t h e r e was a c o m p l e t e 
f a i l u r e o f p r o f e s s i o n a l 
s e r v i c e s 
i n t h e m a t t e r 
o f 
a d v i c e 
r e g a r d i n g 
t h e 
e s t a b l i s h m e n t 
o f o u r b o n d 
i s s u e . " 
On A u g u s t 9, 2 0 0 1 , t h e p r e s i d e n t o f C o i l p l u s , L a r r y D o s s , 
s e n t an e - m a i l r e g a r d i n g t h e 1984 b o n d s and t h e 1999 b o n d s t o 
i t s p a r e n t company, M i t s u b i s h i I n t e r n a t i o n a l 
C o r p o r a t i o n : 
"CPA 
[ C o i l p l u s - A L ] Tax-exempt 
b o n d -
4 
1080618 
" T h u r s d a y 8/2/01-
" M e e t i n g s 
a l l day w i t h 
" J i m 
S c h i e f e l b e i n - B o n d T r u s t e e , Bank o f New Y o r k 
"Heyward 
H o s c h 
I I I - A t t o r n e y 
-- 
W a l s t o n 
W e l l s 
A n d e r s o n & B a i n s , B i r m i n g h a m , AL 
"Alma D r i p p s - I R S - T a x - e x e m p t 
b o n d a g e n t 
" H a z e l 
D i n s m o r e - I R S , 
Tax-exempt 
b o n d 
g r o u p 
manager 
" J o h n n y 
[ s i c ] 
Vann-CPA t a x exempt b o n d 
c o u n c i l 
[ s i c ] 
o f t h e f i r m o f L a n i e r , F o r d , S h a v e r and Payne 
i n 
H u n t s v i l l e , 
p r e v i o u s l y w i t h 
S i r o t e & P e r m u t t a t 
t h e 
t i m e o f t h e b o n d 
i n c e p t i o n 
"Sean K e l l e y - V i c e P r e s . AmSouth Bank 
" S u s a n J o u r n e y - C P A . 
" I 
c a l l e d 
t h i s m e e t i n g t o s e t t l e 
t h i s i s s u e and 
d e t e r m i n e n e x t a c t i o n s . R e s u l t s o f m e e t i n g : 
" 1 . 
CPA 
t a x 
exempt 
b o n d 
was 
d e f u n c t 
f r o m 
t h e 
b e g i n n i n g b e c a u s e o f t h e f a c t t h a t t h e o r i g i n a l 
1984 
$5,000,000 b o n d i s s u e was 
s t i l l 
i n e f f e c t when t h e 
1999 
$8,000,000 
b o n d 
i s s u e 
was 
i n s t i t u t e d . 
A l l 
p r e v i o u s 
i s s u e s 
r e g a r d i n g 
CPA 
c a p i t a l 
e x p e n d i t u r e 
c o n t r o l s 
t o 
a v o i d 
e x c e e d i n g 
t h e 
cap 
a r e 
now 
i m m a t e r i a l . 
Cap 
was 
e x c e e d e d 
f r o m 
t h e 
b o n d ' s 
i n c e p t i o n d a t e i n F e b . 1999. T h i s 
f i n d i n g i s 
f i n a l 
as 
a g r e e d t o by 
a l l 
p a r t i e s . 
"2. 
J o h n n y 
[ s i c ] 
Vann has b e e n t e r m i n a t e d as c o u n c i l 
[ s i c ] 
o f 
any 
k i n d 
f o r CPA. 
Mr. 
Vann 
s h o u l d 
be 
p r e p a r e d 
t o 
c a l l 
on 
h i s 
c a r r i e r 
o f 
e r r o r s 
and 
o m i s s i o n s 
i n s u r a n c e . 
O u t s t a n d i n g 
b i l l 
t o CPA 
f r o m 
Mr. Vann r e g a r d i n g 
t h i s m a t t e r 
w i l l n o t be 
p a i d . 
"3. 
R e s t i t u t i o n and r e c o v e r y 
c o s t s 
a s s o c i a t e d 
w i t h 
t h e 
r e v o c a t i o n 
o f 
t h e 
t a x - e x e m p t 
b o n d 
w i l l 
be 
c h a r g e d 
b a c k 
t o 
t h e 
p a r t i e s 
who 
p r o v i d e d 
p r o f e s s i o n a l s e r v i c e s and b o n d c o u n c i l 
[ s i c ] 
t o CPA. 
5 
1080618 
"4. 
Heyward H o s c h I I I has b e e n 
r e t a i n e d by CPA 
as 
b o n d c o u n c i l [ s i c ] 
f o r t h e new 
t a x a b l e b o n d . 
H o s c h 
I I I 
i s c u r r e n t l y p u t t i n g 
t o g e t h e r t h e t o t a l amount 
o f 
c h a r g e s 
t h a t 
CPA 
w i l l 
r e q u e s t 
as 
r e s t i t u t i o n . 
L i t i g a t i o n 
w i l l be a v o i d e d , b u t i f b e l l i g e r e n c e i s 
e n c o u n t e r e d r e g a r d i n g 
r e s t i t u t i o n , 
t h i s o p t i o n 
w i l l 
n e e d t o be s e r i o u s l y 
e x p l o r e d . 
"5. 
Morgan K e e g a n has b e e n s e l e c t e d as 
u n d e r w r i t e r 
f o r 
t h e new 
t a x a b l e 
b o n d . 
" F r i d a y 8/3/01, B i r m i n g h a m AL 
"Met 
w i t h 
Heyward 
H o s c h 
I I I and 
F r a n k Kohn 
i n 
B i r m i n g h a m 
l a w 
f i r m 
o f f i c e 
f o r a l m o s t 
4 
h o u r s 
w o r k i n g on s t r a t e g y f o r r e s t i t u t i o n and commencement 
o f t a x a b l e 
b o n d . " 
On S e p t e m b e r 20, 2 0 0 1 , t h e 1999 b o n d s were 
r e t i r e d 
and 
r e f u n d e d , e f f e c t i v e as o f t h e d a t e o f t h e i s s u a n c e . 
On M a r c h 
25, 
2002, t h e p r e s i d e n t 
o f C o i l p l u s s e n t 
S i r o t e & P e r m u t t a 
l e t t e r , 
s t a t i n g : 
" I n 1999, C o i l p l u s - A l a b a m a , I n c . , a 
s u b s i d i a r y 
o f 
M i t s u b i s h i 
I n t e r n a t i o n a l 
C o r p o r a t i o n , 
r e t a i n e d 
t h e 
s e r v i c e s 
o f 
S i r o t e 
& P e r m u t t as b o n d 
c o u n c i l 
[ s i c ] 
f o r a b o n d i n t h e amount o f $ 8 , 0 0 0 , 0 0 0 . 
Y o u r 
f i r m ' s 
c o u n c i l o r 
[ s i c ] f o r t h i s 
b o n d 
was 
J o h n n y 
[ s i c ] 
Vann. 
Y o u r f i r m and Mr. Vann were 
recommended 
t o us by o u r c o n t a c t s 
a t AmSouth Bank. 
" T h i s 
l e t t e r and e n c l o s e d d o c u m e n t a t i o n e x p l a i n 
how 
t h e a d v i c e and 
c o u n c i l 
[ s i c ] 
we 
r e c e i v e d 
f r o m 
y o u r 
f i r m was e r r o n e o u s f r o m t h e b e g i n n i n g and 
how 
t h i s 
e r r o r 
i n 
p r o f e s s i o n a l 
a d v i c e 
c a u s e d 
t h e 
I n t e r n a l Revenue S e r v i c e t o d i s q u a l i f y and f o r c e t h e 
6 
1080618 
d i s s o l u t i o n 
o f 
t h e 
t a x - e x e m p t 
b o n d 
l e a d i n g 
t o 
s u b s t a n t i a l m o n e t a r y l o s s t o o u r 
company. 
"Mr. 
Vann, 
i n 
a g r e e m e n t 
w i t h 
AmSouth 
Bank, 
recommended t h a t o u r company a p p l y 
f o r a t a x - e x e m p t 
b o n d , 
w h i c h 
we 
d i d 
i n 
c o m p l i a n c e 
w i t h 
t h e i r 
r e c o m m e n d a t i o n . 
"The 
p o i n t on w h i c h t h e b o n d was 
r e v o k e d by 
t h e 
I n t e r n a l Revenue S e r v i c e was 
t h e $10,000,000 
c a p i t a l 
e x p e n d i t u r e v o l u m e 
c a p . 
The 
IRS 
a u d i t e d 
o u r 
b o n d 
and 
d i s c o v e r e d 
t h a t 
s i n c e 
o u r 
o r i g i n a l 
$5,000,000 
b o n d was 
s t i l l 
i n e f f e c t a t t h e i n c e p t i o n o f t h e 
new 
$8,000,000 t a x exempt b o n d , t h e b o n d n e v e r a c t u a l l y 
q u a l i f i e d 
f o r t h e t a x e x e m p t i o n b e c a u s e t h e 
t o t a l 
o f 
t h e 
two 
b o n d s 
e x c e e d e d 
t h e 
$10,000,000 
c a p i t a l 
e x p e n d i t u r e 
v o l u m e 
c a p . 
T h i s 
c r i t i c a l 
i s s u e 
was 
n e v e r 
b r o u g h t 
t o 
o u r 
a t t e n t i o n 
by 
o u r 
c o u n c i l o r 
[ s i c ] , 
Mr. 
Vann 
and 
t h e 
b o n d 
was 
i n i t i a t e d 
i n 
v i o l a t i o n 
o f 
t h i s 
b a s i c 
q u a l i f y i n g c o n d i t i o n . 
The 
a t t a c h e d 
l e t t e r 
e x p l a i n s 
t h e 
e v e n t s 
and 
t h e i r 
s e q u e n c e o f 
o c c u r r e n c e . 
"An 
e n c l o s e d 
s p r e a d s h e e t p r e s e n t s 
t h e l o s s e s 
t o 
o u r 
company 
i n c u r r e d 
f r o m 
f e e s 
p a i d 
d i r e c t l y 
t o 
S i r o t e 
& 
P e r m u t t . 
I t 
a l s o 
p r e s e n t s 
t h e 
l o s s e s 
i n c u r r e d f r o m one 
t i m e 
f e e s 
p a i d 
on 
t h e 
t a x - e x e m p t 
b o n d 
f o r 
w h i c h 
t h e 
f u l l 
v a l u e 
was 
i r r e t r i e v a b l y 
f o r f e i t e d 
due 
t o 
t h e b o n d ' s 
q u a l i f i c a t i o n 
f a i l u r e . 
On 
t h i s s p r e a d s h e e t , t h e r e i m b u r s e m e n t r e q u e s t s 
f o r 
o n e - t i m e f e e s a r e p r o - r a t e d 
by t h e t i m e t h e b o n d 
was 
i n f o r c e and amount o f t i m e t h a t w o u l d h a v e r e m a i n e d 
i n 
t h e 
l i f e 
o f t h e b o n d a f t e r i t s r e v o c a t i o n 
by 
t h e 
I n t e r n a l Revenue 
S e r v i c e . 
"As 
a m a t t e r o f h o n o r , e q u i t y , and 
p r o f e s s i o n a l 
r e p u t a t i o n , 
I s u b m i t 
t h i s m a t t e r 
t o y o u r 
a t t e n t i o n 
f o r a f a i r and r e a s o n a b l e f i n a n c i a l r e s o l u t i o n b a s e d 
on t h e s e r e a l and d o c u m e n t e d l o s s e s t o o u r company." 
7 
1080618 
On J u n e 24, 
2002, t h e 
c h i e f o p e r a t i n g 
o f f i c e r 
o f S i r o t e 
& P e r m u t t r e s p o n d e d t o t h e 
l e t t e r , 
s t a t i n g as f o l l o w s : 
"Thank you f o r l e t t e r and a c c o m p a n y i n g m a t e r i a l s 
c o n c e r n i n g 
C o i l p l u s ' s 1999 
b o n d i s s u e . 
"We 
h a v e r e a d 
t h e 
m a t e r i a l s 
you 
f o r w a r d e d 
and 
t a l k e d 
w i t h 
J o h n n i e 
Vann 
c o n c e r n i n g 
t h e 
c i r c u m s t a n c e s 
s u r r o u n d i n g 
t h e 
1999 
b o n d 
i s s u e 
as 
w e l l 
as h i s e f f o r t s 
on y o u r b e h a l f 
s i n c e 
S e p t e m b e r 
o f 2001 
i n r e p l a c i n g t h e 1999 
i s s u e w i t h y o u r 
r e c e n t 
t a x a b l e 
i s s u e , and 
t h e 
r e s u l t s 
t h e r e o f . 
" W h i l e we 
r e g r e t v e r y much any 
e r r o r s Mr. 
Vann 
may 
h a v e made i n c o n n e c t i o n 
w i t h h i s 
r e p r e s e n t a t i o n 
o f 
C o i l p l u s , 
we 
do 
n o t 
u n d e r 
t h e 
c i r c u m s t a n c e s 
b e l i e v e t h a t e q u i t y demands r e i m b u r s e m e n t o f amounts 
e x p e n d e d 
by 
C o i l p l u s i n 
c o n n e c t i o n 
w i t h 
t h e 
1999 
i s s u e . 
I 
t r u s t 
t h a t 
you 
w i l l 
u n d e r s t a n d 
and 
a p p r e c i a t e 
o u r 
p o s i t i o n . " 
On 
O c t o b e r 
31, 
2002, 
C o i l p l u s s u e d Vann 
and 
S i r o t e 
& 
P e r m u t t u n d e r t h e A l a b a m a L e g a l S e r v i c e s L i a b i l i t y A c t , § 
6-5¬
570 
e t 
s e q . , 
A l a . 
Code 
1975 
("the 
A L S L A " ) , 
a l l e g i n g 
n e g l i g e n c e , 
w a n t o n n e s s , 
b r e a c h 
o f 
c o n t r a c t , 
b r e a c h 
o f 
a 
f i d u c i a r y d u t y , 
and 
s u p p r e s s i o n 
o f m a t e r i a l f a c t s . 
C o i l p l u s 
l a t e r amended i t s c o m p l a i n t 
t o i n c l u d e t h e 
f a c t t h a t i t c o u l d 
h a v e 
r e d e e m e d 
t h e 
1984 
b o n d s 
b e f o r e 
t h e 
1999 
b o n d s 
were 
i s s u e d , t h u s e n s u r i n g t h e t a x - e x e m p t s t a t u s o f t h e 1999 
b o n d s , 
i f 
Vann 
and 
S i r o t e 
& 
P e r m u t t 
had 
g i v e n 
i t c o r r e c t 
l e g a l 
a d v i c e . 
8 
1080618 
On 
December 
2, 
2002, 
Vann 
and 
S i r o t e 
& 
P e r m u t t 
( h e r e i n a f t e r 
c o l l e c t i v e l y 
r e f e r r e d 
t o as 
" t h e 
d e f e n d a n t s " ) 
f i l e d 
an 
a n s w e r 
i n w h i c h 
t h e y 
r a i s e d 
s e v e r a l 
a f f i r m a t i v e 
d e f e n s e s , 
i n c l u d i n g an a s s e r t i o n t h a t C o i l p l u s ' s c l a i m s were 
b a r r e d by t h e t w o - y e a r 
s t a t u t e o f l i m i t a t i o n s s e t o u t i n § 6¬
5-574, A l a . Code 
1 
975. 
The 
c a s e 
was 
p l a c e d on 
t h e 
t r i a l 
c o u r t ' s a d m i n i s t r a t i v e d o c k e t b e c a u s e Vann was r e c o v e r i n g f r o m 
a s e r i o u s 
i l l n e s s . 
I n M a r c h 2007, t h e p a r t i e s 
f i l e d a 
j o i n t 
m o t i o n 
t o remove 
t h e 
c a s e 
f r o m 
t h e 
a d m i n i s t r a t i v e 
d o c k e t , 
w h i c h t h e t r i a l c o u r t g r a n t e d , and t h e p a r t i e s p r o c e e d e d 
w i t h 
d i s c o v e r y . 
On 
A p r i l 
29, 
2008, 
t h e 
d e f e n d a n t s 
f i l e d 
a 
summary-
j u d g m e n t m o t i o n b a s e d on t h e g r o u n d t h a t a l l C o i l p l u s ' s 
c l a i m s 
were b a r r e d by t h e s t a t u t o r y l i m i t a t i o n s p e r i o d i n t h e A L S L A . 
C o i l p l u s 
f i l e d a memorandum i n o p p o s i t i o n t o t h e m o t i o n . 
The 
t r i a l 
c o u r t 
h e l d 
a 
h e a r i n g 
on 
t h e 
m o t i o n 
and 
a c c e p t e d 
a d d i t i o n a l b r i e f s f r o m t h e p a r t i e s . 
On J a n u a r y 7, 2009, t h e 
t r i a l 
c o u r t 
e n t e r e d 
a 
summary 
j u d g m e n t 
i n 
f a v o r 
o f 
t h e 
d e f e n d a n t s . 
S t a n d a r d o f 
R e v i e w 
" ' " T h i s C o u r t ' s r e v i e w o f a summary j u d g m e n t i s 
de n o v o . W i l l i a m s v. S t a t e Farm Mut. A u t o . I n s . Co., 
9 
1080618 
8 
8 
6 So. 
2d 
72 
, 74 
( A l a . 2 0 0 3 ) . 
We 
a p p l y t h e same 
s t a n d a r d 
o f 
r e v i e w 
as 
t h e 
t r i a l 
c o u r t 
a p p l i e d . 
S p e c i f i c a l l y , 
we must d e t e r m i n e w h e t h e r 
t h e movant 
has made a p r i m a f a c i e s h o w i n g t h a t no g e n u i n e 
i s s u e 
o f 
m a t e r i a l 
f a c t 
e x i s t s 
and 
t h a t 
t h e 
movant 
i s 
e n t i t l e d 
t o 
a j u d g m e n t 
as 
a m a t t e r 
o f 
l a w . 
R u l e 
5 6 ( c ) , A l a . R. C i v . P.; B l u e C r o s s & B l u e S h i e l d o f  
A l a b a m a v. H o d u r s k i , 899 
So. 
2d 
949, 
952-53 ( A l a . 
2 0 0 4 ) . 
I n 
m a k i n g 
s u c h 
a 
d e t e r m i n a t i o n , we 
must 
r e v i e w t h e e v i d e n c e i n t h e 
l i g h t most f a v o r a b l e 
t o 
t h e nonmovant. W i l s o n v. Brown, 496 So. 2d 756, 
758 
( A l a . 
1 9 8 6 ) . Once t h e movant makes a p r i m a 
f a c i e 
s h o w i n g 
t h a t t h e r e i s no g e n u i n e 
i s s u e o f 
m a t e r i a l 
f a c t , 
t h e b u r d e n 
t h e n 
s h i f t s 
t o t h e nonmovant 
t o 
p r o d u c e 
' s u b s t a n t i a l e v i d e n c e ' as t o t h e 
e x i s t e n c e 
o f 
a 
g e n u i n e 
i s s u e 
o f 
m a t e r i a l 
f a c t . 
B a s s 
v. 
 
S o u t h T r u s t Bank o f B a l d w i n C o u n t y , 
538 
So. 2d 
794, 
797-98 
( A l a . 1 9 8 9 ) ; 
A l a . Code 
1975, 
§ 
1 2 - 2 1 - 1 2 . 
' [ S ] u b s t a n t i a l e v i d e n c e i s e v i d e n c e o f s u c h 
w e i g h t 
and q u a l i t y t h a t f a i r - m i n d e d p e r s o n s i n t h e e x e r c i s e 
o f 
i m p a r t i a l 
j u d g m e n t 
c a n 
r e a s o n a b l y 
i n f e r 
t h e 
e x i s t e n c e o f t h e f a c t s o u g h t t o be p r o v e d . ' West v.  
F o u n d e r s 
L i f e A s s u r . Co. 
o f F l a . , 547 
So. 
2d 
87 0 
, 
871 
( A l a . 1 9 8 9 ) . " ' " 
Gooden v. C i t y o f T a l l a d e g a , 966 So. 2d 232, 235 
( A l a . 2007) 
( q u o t i n g 
P r i n c e v. P o o l e , 935 
So. 
2d 431, 
442 
( A l a . 2 0 0 6 ) , 
q u o t i n g i n t u r n Dow 
v. A l a b a m a D e m o c r a t i c P a r t y , 
897 
So. 
2d 
1035, 1038-39 ( A l a . 2 0 0 4 ) ) . 
A r g u m e n t s 
The 
i s s u e p r e s e n t e d f o r r e v i e w i n t h i s 
c a s e i s w h e t h e r 
C o i l p l u s ' s 
a c t i o n b r o u g h t u n d e r 
t h e A L S L A was 
t i m e l y 
f i l e d . 
The 
r e s o l u t i o n 
o f 
t h i s 
i s s u e d e p e n d s on a d e t e r m i n a t i o n o f 
when t h e s t a t u t e o f l i m i t a t i o n s on C o i l p l u s ' s c l a i m s b e g a n t o 
10 
1080618 
r u n . 
C o i l p l u s s u b m i t s t h a t i t 
b r o u g h t m u l t i p l e c l a i m s 
u n d e r 
t h e A L S L A ( n e g l i g e n c e , w a n t o n n e s s , b r e a c h o f c o n t r a c t , 
b r e a c h 
o f a f i d u c i a r y d u t y , a n d s u p p r e s s i o n 
o f m a t e r i a l 
f a c t s ) and 
t h a t 
§ 
6-5-570, 
A l a . Code 
1975, a 
p a r t 
o f t h e A L S L A , 
i n c o r p o r a t e s 
i n t o 
t h e A L S L A 
a l l 
common-law and 
s t a t u t o r y 
c a u s e s o f a c t i o n a g a i n s t a l e g a l - s e r v i c e s p r o v i d e r . 
C o i l p l u s 
a r g u e s t h a t t h i s C o u r t i n S y s t e m D y n a m i c s I n t e r n a t i o n a l , 
I n c . 
 
v. 
B o y k i n , 
683 So. 2d 419 
( A l a . 1 9 9 6 ) , h e l d 
t h a t a c a u s e o f 
a c t i o n f o r b r e a c h o f a f i d u c i a r y d u t y 
a r i s i n g o u t o f an IRS 
l i a b i l i t y 
a c c r u e s 
o n l y when t h e IRS f i r s t 
s e n d s n o t i c e o f a 
d i s a l l o w a n c e o f a d e d u c t i o n . 
C o i l p l u s f u r t h e r a r g u e s t h a t t h e 
t r i a l c o u r t i n 
t h e p r e s e n t c a s e e r r o n e o u s l y 
c o n c l u d e d t h a t t h e 
s t a t u t e o f l i m i t a t i o n s b e g a n t o r u n i n F e b r u a r y 1999 when t h e 
b o n d s were i s s u e d , n o t on J u l y 16, 2 0 0 1 , when t h e IRS s e n t 
n o t i c e o f t h e p o s s i b l e d i s a l l o w a n c e 
o f t h e t a x - e x e m p t 
s t a t u s 
o f t h e 1999 b o n d s and t h a t t h e o n l y 
d i f f e r e n c e b e t w e e n t h e 
b r e a c h a l l e g e d i n 
t h e p r e s e n t c a s e and t h e b r e a c h o f f i d u c i a r y 
d u t y a l l e g e d i n S y s t e m D y n a m i c s i s t h a t t h e d e f e n d a n t s i n 
t h e 
p r e s e n t c a s e a r e 
l a w y e r s . 
C o i l p l u s 
a r g u e s 
t h a t 
i t s c l a i m s 
o f 
n e g l i g e n c e 
and 
w a n t o n n e s s d i d 
n o t a c c r u e u n t i l t h e r e was a " m a n i f e s t , 
p r e s e n t 
11 
1080618 
i n j u r y " u n d e r 
G r i f f i n v . U n o c a l C o r p . , 990 So. 2d 291 ( A l a . 
2 0 0 8 ) . 
W i t h 
r e g a r d 
t o i t s f r a u d 
c l a i m 
b r o u g h t 
u n d e r t h e 
A L S L A , C o i l p l u s a r g u e s t h a t § 6-5-574 o f t h e A L S L A s e t s o u t 
t h e 
s p e c i f i c s t a t u t o r y p e r i o d f o r t h e commencement o f a c t i o n s 
and e x c e p t i o n s t o t h a t p e r i o d and t h a t § 6-2-3, w h i c h 
p r o v i d e s 
t h a t 
i n a c t i o n s 
s e e k i n g 
r e l i e f 
on t h e g r o u n d o f f r a u d t h e 
c l a i m must n o t be c o n s i d e r e d as a c c r u e d u n t i l t h e d i s c o v e r y o f 
t h e 
f r a u d , 
a f t e r w h i c h t h e a g g r i e v e d 
p a r t y has two y e a r s t o 
p r o s e c u t e , 
i s one o f t h e e x c e p t i o n s 
f o u n d i n § 6 - 5 - 5 7 4 ( b ) .
1 
The d e f e n d a n t s a r g u e t h a t a l l C o i l p l u s ' s c l a i m s 
b r o u g h t 
u n d e r 
t h e A L S L A 
a r e 
b a r r e d 
b y 
t h e 
t w o - y e a r 
s t a t u t e 
o f 
l i m i t a t i o n s 
i n § 6 - 5 - 5 7 4 ( a ) 
a n d 
t h a t 
t h e a c t o r 
o m i s s i o n 
g i v i n g 
r i s e 
t o C o i l p l u s ' s c l a i m s 
o c c u r r e d 
on F e b r u a r y 
25, 
1999, 
when t h e 1999 b o n d s were i s s u e d . 
They a r g u e t h a t u n d e r 
t h e c a s e l a w i n t e r p r e t i n g t h e l i m i t a t i o n s p e r i o d i m p o s e d b y § 
6 - 5 - 5 7 4 ( a ) , e i t h e r as s e t o u t i n Ex p a r t e 
P a n e l l , 756 So. 2d 
862 ( A l a . 
1 9 9 9 ) ( h o l d i n g 
t h a t t h e s t a t u t o r y l i m i t a t i o n s 
p e r i o d 
b e g i n s t o r u n f r o m t h e d a t e o f t h e o c c u r r e n c e o f t h e t o r t i o u s 
a c t o r o m i s s i o n ) , o r as s e t o u t i n M i c h a e l v . B e a s l e y , 
583 So. 
2d 
245 
( A l a . 1 9 9 1 ) ( h o l d i n g 
t h a t 
t h e s t a t u t o r y 
l i m i t a t i o n s 
1 C o i l p l u s d o e s n o t a d d r e s s i t s 
b r e a c h - o f - c o n t r a c t 
c l a i m 
i n i t s b r i e f t o t h i s C o u r t ; 
t h e r e f o r e , we w i l l n o t a d d r e s s i t . 
12 
1080618 
p e r i o d 
b e g i n s 
t o r u n 
f r o m 
t h e 
d a t e 
o f 
t h e 
a c c r u a l 
o f 
t h e 
a c t i o n and n o t f r o m t h e d a t e o f t h e o c c u r r e n c e o f t h e a c t o r 
o m i s s i o n ) , 
C o i l p l u s ' s 
a c t i o n 
i s u n t i m e l y . 
The 
d e f e n d a n t s 
f u r t h e r 
a r g u e 
t h a t 
e v e n 
a s s u m i n g 
t h a t 
t h e s i x - m o n t h 
s a v i n g s 
p r o v i s i o n s e t f o r t h i n § 6-5-574(a) a p p l i e s , C o i l p l u s ' s 
a c t i o n 
i s 
l i k e w i s e u n t i m e l y . 
The 
d e f e n d a n t s a r g u e 
t h a t 
C o i l p l u s a t t e m p t s t o e s c a p e 
§ 
6-5-574 and c a s e l a w a d d r e s s i n g when a c a u s e o f a c t i o n 
a c c r u e s 
i n 
a 
l e g a l - m a l p r a c t i c e 
c a s e 
by 
r e l y i n g 
on 
c a s e s 
t h a t 
a r e 
i n a p p l i c a b l e 
o r 
d i s t i n g u i s h a b l e . 
S p e c i f i c a l l y , 
t h e y 
a r g u e 
t h a t S y s t e m D y n a m i c s and 
G r i f f i n 
a r e n o t c o n t r o l l i n g b e c a u s e 
n e i t h e r 
one 
i n v o l v e d 
t h e ALSLA. 
W i t h 
r e g a r d t o 
C o i l p l u s ' s 
f r a u d 
c l a i m , 
t h e d e f e n d a n t s a r g u e 
t h a t 
t h e c l a i m 
i s w i t h o u t 
m e r i t b e c a u s e 
C o i l p l u s 
f a i l e d 
t o show t h a t 
t h e 
f r a u d 
c l a i m 
c o u l d come w i t h i n 
t h e 
t o l l i n g 
p r o v i s i o n 
o f § 6-2-3 
when t h e 
o n l y 
f a c t s 
a l l e g e d 
by 
C o i l p l u s w e r e , 
i n e s s e n c e , 
t h a t 
Vann 
gave i n c o r r e c t 
l e g a l a d v i c e , and C o i l p l u s 
a l l e g e d n o t h i n g t o 
show 
an 
i n t e n t i o n a l 
s u p p r e s s i o n by 
Vann 
( i . e . , 
t h a t 
Vann 
i n t e n t i o n a l l y gave C o i l p l u s 
i n c o r r e c t 
l e g a l 
a d v i c e ) . 
D i s c u s s i o n 
13 
1080618 
T h e r e i s o n l y 
"one 
f o r m and 
c a u s e o f a c t i o n " t h a t may 
be 
b r o u g h t i n A l a b a m a a g a i n s t 
a l e g a l - s e r v i c e p r o v i d e r , 
and 
t h a t 
i s 
a 
l e g a l - s e r v i c e - l i a b i l i t y 
a c t i o n . 
§ 6-5-573, 
A l a . 
Code 
1975. 
S e c t i o n 
6-5-572, A l a . Code 1975, 
p r o v i d e s 
t h a t 
" [ a ] 
l e g a l 
s e r v i c e 
l i a b i l i t y 
a c t i o n 
e m b r a c e s a l l 
c l a i m s 
f o r 
i n j u r i e s 
o r damages 
o r 
w r o n g f u l 
d e a t h 
w h e t h e r i n c o n t r a c t 
o r i n t o r t 
and w h e t h e r b a s e d 
on 
an 
i n t e n t i o n a l o r u n i n t e n t i o n a l 
a c t 
o r o m i s s i o n . 
A 
l e g a l 
s e r v i c e [ ] 
l i a b i l i t y 
a c t i o n e m b r a c e s any 
f o r m 
o f a c t i o n i n w h i c h a l i t i g a n t may 
s e e k l e g a l 
r e d r e s s 
f o r 
a w r o n g 
o r 
i n j u r y 
and 
e v e r y 
l e g a l 
t h e o r y 
o f 
r e c o v e r y , w h e t h e r common l a w o r s t a t u t o r y , 
a v a i l a b l e 
t o a l i t i g a n t 
i n a c o u r t 
i n t h e 
S t a t e 
o f A l a b a m a 
now 
o r 
i n t h e 
f u t u r e . " 
T h i s 
i n c l u d e s 
t h e 
m u l t i p l e 
c l a i m s 
b r o u g h t by 
C o i l p l u s u n d e r 
t h e A L S L A . 
S e c t i o n 6-5-574, A l a . Code 1975, 
p r o v i d e s : 
" ( a ) A l l l e g a l s e r v i c e 
l i a b i l i t y a c t i o n s 
a g a i n s t 
a 
l e g a l 
s e r v i c e 
p r o v i d e r 
must be 
commenced 
w i t h i n 
two 
y e a r s 
a f t e r 
t h e 
a c t 
o r 
o m i s s i o n 
o r 
f a i l u r e 
g i v i n g 
r i s e 
t o 
t h e 
c l a i m , 
and 
n o t 
a f t e r w a r d s ; 
p r o v i d e d , 
t h a t 
i f 
t h e 
c a u s e 
o f 
a c t i o n 
i s 
n o t 
d i s c o v e r e d 
and 
c o u l d 
n o t 
r e a s o n a b l y 
have 
b e e n 
d i s c o v e r e d 
w i t h i n 
s u c h p e r i o d , 
t h e n 
t h e 
a c t i o n 
may 
be commenced w i t h i n s i x months f r o m t h e d a t e o f s u c h 
d i s c o v e r y 
o r 
t h e 
d a t e 
o f 
d i s c o v e r y 
o f 
f a c t s 
w h i c h 
w o u l d r e a s o n a b l y 
l e a d 
t o s u c h d i s c o v e r y , 
w h i c h e v e r 
i s 
e a r l i e r ; 
p r o v i d e d , 
f u r t h e r , t h a t 
i n no e v e n t 
may 
t h e 
a c t i o n be commenced more t h a n 
f o u r 
y e a r s 
a f t e r 
s u c h a c t o r o m i s s i o n o r f a i l u r e ; e x c e p t , t h a t an 
a c t 
o r o m i s s i o n o r 
f a i l u r e 
g i v i n g r i s e t o a c l a i m 
w h i c h 
o c c u r r e d 
b e f o r e A u g u s t 
1, 
1987, 
s h a l l 
n o t 
i n 
any 
e v e n t 
be 
b a r r e d 
u n t i l 
t h e 
e x p i r a t i o n 
o f 
one 
y e a r 
f r o m s u c h 
d a t e . 
14 
1080618 
"(b) 
S u b s e c t i o n 
(a) o f t h i s 
s e c t i o n 
s h a l l 
be 
s u b j e c t t o a l l e x i s t i n g 
p r o v i s i o n s o f l a w 
r e l a t i n g 
t o 
t h e 
c o m p u t a t i o n 
o f 
s t a t u t o r y 
p e r i o d s 
o f 
l i m i t a t i o n s f o r 
t h e commencement o f a c t i o n s , n a m e l y , 
S e c t i o n s 
6-2-1, 6-2-2, 6-2-3, 6-2-5, 6-2-6, 6-2-8, 
6-2-9, 6-2-10, 6-2-13, 6-2-15, 6-2-16, 6-2-17, 6-2-
3 0 , a n d 6-2-39; 
p r o v i d e d , 
t h a t 
n o t w i t h s t a n d i n g 
any 
p r o v i s i o n s 
o f s u c h 
s e c t i o n s , 
no 
a c t i o n 
s h a l l 
be 
commenced 
more 
t h a n 
f o u r 
y e a r s 
a f t e r 
t h e a c t , 
o m i s s i o n , 
o r f a i l u r e c o m p l a i n e d o f ; e x c e p t , t h a t i n 
t h e 
c a s e o f a m i n o r u n d e r 
f o u r 
y e a r s o f a g e , s u c h 
m i n o r s h a l l h a v e u n t i l h i s o r h e r e i g h t h b i r t h d a y t o 
commence s u c h a c t i o n . " 
I n s h o r t , § 6-5-574(a) r e q u i r e s t h a t a p l a i n t i f f commence 
a l e g a l - m a l p r a c t i c e 
a c t i o n w i t h i n two y e a r s a f t e r t h e a c t o r 
o m i s s i o n o r f a i l u r e 
g i v i n g r i s e t o t h e a c t i o n . 
S e c t i o n 
6-5-
5 7 4 ( b ) s u b j e c t s t h e t w o - y e a r l i m i t a t i o n s p e r i o d t o o t h e r l a w 
r e l a t i n g 
t o t h e c o m p u t a t i o n 
o f t h e 
s t a t u t o r y 
p e r i o d s 
o f 
l i m i t a t i o n s . 
S e c t i o n 
6-5-574(a) 
a l s o 
p r o v i d e s 
f o r an 
a m e l i o r a t i v e 
d i s c o v e r y 
p e r i o d o f s i x 
months f r o m t h e d a t e o f 
d i s c o v e r y o f t h e c a u s e o f a c t i o n o r t h e d a t e o f t h e d i s c o v e r y 
o f f a c t s t h a t w o u l d r e a s o n a b l y l e a d t o s u c h d i s c o v e r y i f 
t h e 
c a u s e o f a c t i o n was n o t known t o t h e p l a i n t i f f d u r i n g t h e t w o -
y e a r 
p e r i o d . 
U n d e r § 
6 - 5 - 5 7 4 ( a ) , 
t h e r e 
i s a 
f o u r - y e a r 
a b s o l u t e 
b a r on a l l c l a i m s 
o c c u r r i n g on o r a f t e r A u g u s t 1, 
1987. 
15 
1080618 
I n t h e p r e s e n t c a s e , C o i l p l u s a s s e r t e d f i v e c l a i m s u n d e r 
t h e A L S L A a g a i n s t t h e d e f e n d a n t s . 
B e c a u s e C o i l p l u s d o e s n o t 
s p e c i f i c a l l y 
a d d r e s s 
i t s b r e a c h - o f - c o n t r a c t c l a i m 
i n i t s 
b r i e f , 
t h i s C o u r t w i l l n o t a d d r e s s 
i t . 
See T u c k e r v. 
C u l l m a n - 
J e f f e r s o n C o u n t y Gas D i s t . , 864 So. 2d 317 
( A l a . 2 
0 
0 3 ) ( h o l d i n g 
t h a t 
an 
a p p e a l s 
c o u r t 
w i l l 
n o t 
d i s c u s s a m a t t e r 
on 
a p p e a l 
u n l e s s p r e s e n t e d and a r g u e d i n b r i e f ) . 
U n d e r § 
6 - 5 - 5 7 4 ( b ) , 
C o i l p l u s ' s 
f r a u d 
c l a i m 
i s 
s u b j e c t 
t o 
c e r t a i n 
s t a t u t e s 
r e g a r d i n g t h e c o m p u t a t i o n 
o f t i m e f o r 
s t a t u t e - o f - l i m i t a t i o n s 
p u r p o s e s , 
w h i c h 
we 
d i s c u s s 
l a t e r 
i n t h e 
o p i n i o n . 
We 
w i l l 
r e v i e w 
t h e 
r e m a i n d e r 
o f 
C o i l p l u s ' s 
c l a i m s 
( n e g l i g e n c e , 
w a n t o n n e s s , and b r e a c h o f a f i d u c i a r y d u t y ) 
i n l i g h t 
o f 
t h e 
a p p l i c a b l e s t a t u t o r y l i m i t a t i o n s p e r i o d s e t f o r t h i n § 6-5-574 
and r e l e v a n t c a s e l a w 
i n t e r p r e t i n g t h e A L S L A . 
I n 
Denbo v. 
D e B r a y , 
968 
So. 
2d 
983 
( A l a . 2 0 0 6 ) , 
t h i s 
C o u r t d i s c u s s e d t h e c a s e l a w a p p l y i n g t h e " o c c u r r e n c e " t e s t 
and 
t h e "damage" t e s t i n d e t e r m i n i n g when t h e t w o - y e a r 
s t a t u t e o f 
l i m i t a t i o n s 
i n § 6-5-574 b e g i n s t o r u n . 
I n Denbo, a 
f o r m e r 
c l i e n t 
f i l e d 
a l e g a l - m a l p r a c t i c e 
a c t i o n a g a i n s t h i s a t t o r n e y 
and 
t h e 
l a w 
f i r m 
t h a t 
e m p l o y e d 
t h e 
a t t o r n e y 
f o l l o w i n g 
l i t i g a t i o n 
i n v o l v i n g 
t h e 
c l i e n t 
and 
t h e 
E n v i r o n m e n t a l 
16 
1080618 
P r o t e c t i o n A g e n c y 
a r i s i n g 
o u t o f t h e c l i e n t ' s 
a c t i v i t i e s i n 
d i s p o s i n g 
o f h a z a r d o u s w a s t e . 
From 
t h e b e g i n n i n g 
o f t h e 
l i t i g a t i o n , 
t h e c l i e n t 
p r o v i d e d 
t h e a t t o r n e y 
w i t h 
c o p i e s 
o f 
c e r t i f i c a t e s o f i n s u r a n c e 
c o v e r i n g t h e c h a l l e n g e d 
a c t i v i t i e s 
a t t h e s i t e and a s k e d t h a t t h e a t t o r n e y 
n o t i f y t h e 
i n s u r a n c e 
c o m p a n i e s o f t h e l i t i g a t i o n . 
From 1993 t o 2000, t h e a t t o r n e y 
and t h e l a w f i r m were a c t i v e l y e n g a g e d i n t h e l i t i g a t i o n 
and 
p e r i o d i c a l l y 
b i l l e d t h e c l i e n t 
f o r a t t o r n e y 
f e e s and 
c o s t s , 
w h i c h 
t h e 
c l i e n t 
p a i d . 
The 
c l i e n t 
r e p e a t e d l y 
a s k e d 
t h e 
a t t o r n e y and 
t h e e m p l o y e e s o f t h e l a w f i r m i f t h e 
i n s u r a n c e 
c o m p a n i e s h a d b e e n n o t i f i e d r e g a r d i n g t h e p e n d i n g c l a i m s . 
The 
a t t o r n e y a s s u r e d 
t h e c l i e n t 
t h a t t h e i n s u r a n c e 
c o m p a n i e s h a d 
b e e n 
n o t i f i e d . 
I n A u g u s t 2000, t h e c l i e n t 
a g r e e d t o 
s e t t l e 
t h e c a s e b a s e d on a d v i c e f r o m t h e a t t o r n e y . 
I n M a r c h 2002, 
t h e 
c l i e n t was 
i n f o r m e d 
t h a t t h e i n s u r a n c e 
c o m p a n i e s h a d n o t 
b e e n 
n o t i f i e d 
o f t h e l i t i g a t i o n 
i n a t i m e l y manner and were 
n o t 
r e s p o n s i b l e 
f o r c o s t s 
and 
a t t o r n e y 
f e e s 
t h a t h a d 
b e e n 
i n c u r r e d 
by t h e 
c l i e n t 
w i t h o u t 
t h e i r 
c o n s e n t . 
B e c a u s e t h e 
i n s u r a n c e c o m p a n i e s h a d n o t b e e n n o t i f i e d o f t h e c l a i m s a t t h e 
commencement 
o f t h e 
l i t i g a t i o n , 
t h e c o m p a n i e s 
r e f u s e d 
t o 
r e i m b u r s e t h e c l i e n t f o r t h e c o s t o f t h e s e t t l e m e n t o r f o r t h e 
17 
1080618 
c o s t s o f 
l i t i g a t i o n . 
The 
c l i e n t 
f i l e d a 
l e g a l - m a l p r a c t i c e 
c l a i m b a s e d on t h e a t t o r n e y ' s 
f a i l u r e t o n o t i f y t h e i n s u r a n c e 
c o m p a n i e s , w h i c h was deemed t o have b e e n 
f i l e d on O c t o b e r 1, 
2 0 0 2 .
2 
The d e f e n d a n t s moved f o r a summary j u d g m e n t 
on t h e 
b a s i s 
t h a t t h e a c t i o n was b a r r e d b y t h e t w o - y e a r 
s t a t u t e o f 
l i m i t a t i o n s i n t h e ALSLA, w h i c h t h e t r i a l 
c o u r t g r a n t e d . 
I n 
Denbo, 
t h i s 
C o u r t 
d i s c u s s e d 
t h e 
two 
d i f f e r e n t 
a p p r o a c h e s 
f o r d e t e r m i n i n g when t h e s t a t u t e o f 
l i m i t a t i o n s 
b e g i n s t o r u n , i . e . , 
when a c a u s e o f a c t i o n 
" a c c r u e s . " 
The 
C o u r t 
d i s c u s s e d 
t h e "damage" 
r u l e 
i n F l o y d 
v. 
M a s s e y 
& 
 
S t o t s e r , P.C., 807 So. 2d 508 ( A l a . 2 0 0 1 ) ,
3 u n d e r w h i c h t h e 
s t a t u t e o f l i m i t a t i o n s b e g i n s t o r u n f r o m t h e d a t e t h a t t h e 
c l i e n t i n t h e l e g a l - m a l p r a c t i c e 
a c t i o n s u s t a i n s an i n j u r y o r 
damage. 
The C o u r t a l s o d i s c u s s e d Ex p a r t e P a n e l l , 756 So. 2d 
862 
( A l a . 
1 9 9 9 ) ( a 
p l u r a l i t y 
o p i n i o n ) , and Ex p a r t e 
S e a b o l , 
782 So. 2d 212 ( A l a . 2 0 0 0 ) , i n w h i c h t h e C o u r t r e l i e d on t h e 
" o c c u r r e n c e " 
r u l e , w h i c h b a s e s t h e r u n n i n g o f t h e s t a t u t e o f 
l i m i t a t i o n s on t h e d a t e t h e a c t o r o m i s s i o n g i v i n g r i s e t o t h e 
2 T h e 
c l i e n t 
f i l e d 
h i s a c t i o n 
on M a r c h 
26, 2003, 
b u t 
p u r s u a n t t o a 
" t o l l i n g 
a g r e e m e n t " 
b e t w e e n 
t h e p a r t i e s , t h e 
a c t i o n was deemed t o have b e e n 
f i l e d on O c t o b e r 1, 2002. 
3 F l o y d v. M a s s e y & S t o t s e r r e l i e d i n p a r t upon M i c h e a l v .  
B e a s l e y , 583 So. 2d 245 ( A l a . 1 9 9 1 ) . 
18 
1080618 
c l a i m o c c u r r e d and n o t when damage i s f i r s t 
s u f f e r e d . 
T h i s 
C o u r t i n Denbo r e c o g n i z e d t h e s p l i t 
o f a u t h o r i t y i n 
l e g a l -
m a l p r a c t i c e 
a c t i o n s b u t d i d n o t e l e c t t o r e s o l v e t h e 
s p l i t . 
I n s t e a d , 
t h e 
C o u r t 
h e l d 
t h a t 
u n d e r 
e i t h e r 
t h e 
"damage" 
a p p r o a c h o r t h e " o c c u r r e n c e " a p p r o a c h , t h e c l i e n t ' s 
c o m p l a i n t 
was u n t i m e l y . 
U n d e r 
t h e 
" o c c u r r e n c e " 
r u l e , 
t h e 
C o u r t 
i n 
Denbo 
d e t e r m i n e d 
t h a t t h e c o m p l a i n t 
was 
b a r r e d b y t h e 
t w o - y e a r 
s t a t u t e o f l i m i t a t i o n s b e c a u s e t h e a t t o r n e y ' s a c t o r o m i s s i o n 
( i . e . , t h e f a i l u r e t o t i m e l y n o t i f y t h e i n s u r a n c e c o m p a n i e s ) 
o c c u r r e d more t h a n two y e a r s b e f o r e t h e f i l i n g o f t h e a c t i o n . 
The 
C o u r t c o n c l u d e d 
t h a t e v e n t h o u g h § 6-5-574(a) a l l o w s f o r 
a s i x - m o n t h 
g r a c e 
p e r i o d f r o m t h e t i m e o f d i s c o v e r y i f 
t h e 
c a u s e o f a c t i o n i s 
n o t , o r c o u l d n o t r e a s o n a b l y b e , d i s c o v e r e d 
w i t h i n t h e t w o - y e a r p e r i o d , t h e c l i e n t was 
n o t i f i e d b y t h e 
i n s u r a n c e 
c o m p a n i e s 
i n M a r c h 2002 
t h a t 
t h e y h a d n o t b e e n 
n o t i f i e d o f t h e c l a i m s . 
A c c o r d i n g l y , t h e a c t i o n , 
f i l e d 
on 
O c t o b e r 
1, 2002, was o u t s i d e t h e s i x - m o n t h 
e x t e n s i o n o f t i m e 
a f f o r d e d b y § 6 - 5 - 5 7 4 ( a ) . 
U n d e r t h e "damage" a p p r o a c h , t h e 
C o u r t c o n c l u d e d 
l i k e w i s e t h a t t h e c l a i m was t i m e - b a r r e d . 
The 
c l i e n t ' s 
damage, 
i n c l u d i n g t h e l e g a l 
f e e s he h a d p a i d t h e 
19 
1080618 
a t t o r n e y , 
i n 
a d d i t i o n 
t o 
t h e 
s e t t l e m e n t amount, 
w h i c h 
t h e 
c l i e n t 
c o n t e n d e d 
w o u l d 
have 
b e e n 
p a i d 
by 
t h e 
i n s u r a n c e 
c o m p a n i e s i f t h e c o m p a n i e s had b e e n p r o p e r l y n o t i f i e d o f 
t h e 
c l a i m s , o c c u r r e d more t h a t two y e a r s b e f o r e t h e 
f i l i n g o f t h e 
l e g a l - m a l p r a c t i c e 
a c t i o n . 
The 
Denbo 
C o u r t 
a l s o 
h e l d 
t h a t 
t h e l e g a l - m a l p r a c t i c e 
c l a i m s were p r e c l u d e d by t h e a b s o l u t e f o u r - y e a r b a r o f § 
6-5-
5 7 4 ( b ) b e c a u s e b o t h t h e a t t o r n e y ' s o m i s s i o n and t h e payment o f 
l e g a l f e e s o c c u r r e d more t h a n f o u r y e a r s b e f o r e t h e 
f i l i n g 
o f 
t h e l e g a l - m a l p r a c t i c e a c t i o n . 
The 
C o u r t went on t o d i s c u s s 
t h e 
c l i e n t ' s 
a t t e m p t 
t o e s c a p e t h e t i m e b a r o f t h e A L S L A 
by 
i n v o k i n g t h e p r o t e c t i o n o f § 6-2-3 
as 
made a v a i l a b l e by § 
6-
5 - 5 7 4 ( b ) . 
The 
C o u r t d e t e r m i n e d 
t h a t , t o t h e e x t e n t t h a t § 
6¬
2-3 was 
a p p l i c a b l e , t h e c l i e n t ' s f r a u d c l a i m was w i t h o u t m e r i t 
b e c a u s e t h e r e had b e e n no r e a s o n a b l e 
r e l i a n c e . 
As was 
t h e c a s e i n Denbo, t h e r e i s no n e e d i n t h e 
p r e s e n t 
c a s e 
f o r t h i s C o u r t t o e l e c t b e t w e e n t h e o c c u r r e n c e 
a p p r o a c h 
and t h e damage a p p r o a c h : 
C o i l p l u s ' s c l a i m s a r e u n t i m e l y u n d e r 
e i t h e r s c e n a r i o . 
U n d e r t h e o c c u r r e n c e 
a p p r o a c h 
d i s c u s s e d i n 
P a n e l l and Ex p a r t e S e a b o l , t h e a c t o r o m i s s i o n g i v i n g r i s e t o 
t h e 
C o i l p l u s ' s 
c l a i m was 
Vann's o p i n i o n t h a t t h e 
1999 
b o n d s 
20 
1080618 
q u a l i f i e d f o r t a x - e x e m p t s t a t u s when t h e y d i d 
n o t . T h a t a c t 
o c c u r r e d no l a t e r 
t h a n 
F e b r u a r y 25, 1999, t h e d a t e t h e 1999 
b o n d s were i s s u e d . 
C o i l p l u s 
f i l e d 
i t s c o m p l a i n t on 
O c t o b e r 
30, 2002, a f t e r t h e t w o - y e a r s t a t u t e o f l i m i t a t i o n s h a d 
r u n . 
A s s u m i n g t h a t t h e s i x - m o n t h 
s a v i n g s p r o v i s i o n o f § 6-5-574(a) 
a p p l i e s , 
C o i l p l u s 
f i r s t 
h a d k n o w l e d g e 
t h a t t h e t a x - e x e m p t 
s t a t u s o f t h e 1999 b o n d s was q u e s t i o n a b l e on J u l y 16, 2 0 0 1 , 
when t h e IRS e m p l o y e e 
s e n t t h e e - m a i l 
a d d r e s s i n g t h e 
t a x -
exempt s t a t u s o f t h e 1999 b o n d s o r , a t t h e l a t e s t , when Doss 
met w i t h IRS e m p l o y e e s , new c o u n s e l , and t h e b o n d 
t r u s t e e , 
among 
o t h e r s , 
on A u g u s t 
2, 2 0 0 1 , t o d i s c u s s 
t h e 
i s s u e . 
C o i l p l u s 
f i l e d 
i t s c o m p l a i n t more t h a n 6 months a f t e r A u g u s t 
2, 2 0 0 1 . 
C o i l p l u s ' s 
c l a i m s 
a r e l i k e w i s e 
t i m e - b a r r e d 
u n d e r t h e 
damage a p p r o a c h 
r e c o g n i z e d i n M i c h a e l v . B e a s l e y . 
I n M i c h a e l , 
t h e C o u r t h e l d t h a t a c a u s e o f a c t i o n u n d e r t h e A L S L A 
a c c r u e s 
a t 
t h e t i m e 
t h e 
p l a i n t i f f 
f i r s t 
s u f f e r s 
l e g a l 
i n j u r y 
o r 
damage. 
I n t h i s c a s e , C o i l p l u s 
f i r s t s u f f e r e d l e g a l i n j u r y o r 
damage when t h e 1999 b o n d s were s o l d as t a x - e x e m p t b o n d s on 
F e b r u a r y 
25, 1999, when t h o s e 
b o n d s d i d n o t a n d c o u l d n o t 
q u a l i f y f o r t a x - e x e m p t 
s t a t u s . 
21 
1080618 
C o i l p l u s 
a r g u e s 
t h a t i t s 
l e g a l 
i n j u r y 
o c c u r r e d 
i n 2001 
when t h e IRS n o t i f i e d 
C o i l p l u s t h a t t h e 1999 b o n d s were n o t 
t a x exempt, b u t i t s 
r e l i a n c e on S y s t e m D y n a m i c s , 
s u p r a , i s 
m i s p l a c e d . 
I n S y s t e m D y n a m i c s , t h e c h i e f e x e c u t i v e 
o f f i c e r 
("the CEO") o f t h e c o r p o r a t i o n c a u s e d t h e c o r p o r a t i o n t o make 
c e r t a i n p a y m e n t s t o h i m . 
The IRS l a t e r 
a s s e s s e d 
a 
p e n a l t y 
a g a i n s t t h e c o r p o r a t i o n b a s e d on some o f t h o s e p a y m e n t s , and 
t h e c o r p o r a t i o n s u e d t h e CEO. 
T h i s C o u r t h e l d t h a t t h e r e h a d 
b e e n no c o m p l e t e d w r o n g u n t i l t h e IRS a s s e s s e d 
a p e n a l t y and 
t h a t t h e s t a t u t e o f l i m i t a t i o n s d i d 
n o t b e g i n t o r u n u n t i l t h e 
I R S ' s a s s e s s m e n t . 
F i r s t , S y s t e m D y n a m i c s d i d 
n o t i n v o l v e t h e 
A L S L A and t h e s t a t u t o r y r e q u i r e m e n t s , i n c l u d i n g t h e s t a t u t e o f 
l i m i t a t i o n s , e n a c t e d b y t h e l e g i s l a t u r e f o r l e g a l - m a l p r a c t i c e 
c l a i m s . 
S e c o n d , S y s t e m D y n a m i c s i s f a c t u a l l y d i s t i n g u i s h a b l e 
f r o m t h e p r e s e n t 
c a s e . 
I n S y s t e m D y n a m i c s , t h i s C o u r t 
r e l i e d 
on t h e f a c t t h a t t h e c o r p o r a t i o n d i d 
n o t know w h e t h e r t h e IRS 
w o u l d a l l o w t h e p a y m e n t s t o t h e CEO as b u s i n e s s 
d e d u c t i o n s , 
w o u l d a l l o w a p o r t i o n o f t h e p a y m e n t s , o r w o u l d d i s a l l o w a l l 
t h e 
p a y m e n t s . 
A t 
b e s t , 
t h e r e 
e x i s t e d 
a 
p o t e n t i a l t a x 
l i a b i l i t y and c o n s e q u e n c e s when t h e p a y m e n t s were made t o t h e 
CEO, a n d , i n t h e e n d , t h e IRS d i s a l l o w e d o n l y a p o r t i o n o f t h e 
22 
1080618 
p a y m e n t s . 
I n o t h e r 
w o r d s , t h e p a y m e n t s were n o t i m p r o p e r 
b e c a u s e t h e c o r p o r a t i o n s u f f e r e d no i m m e d i a t e harm as a r e s u l t 
o f t h e p a y m e n t s ; i t 
was o n l y a l a t e r a t t e m p t t o d e d u c t 
t h o s e 
p a y m e n t s 
t h a t 
r e s u l t e d 
i n a 
d i s a l l o w a n c e 
o f some o f t h e 
p a y m e n t s 
as 
b u s i n e s s 
d e d u c t i o n s . 
I n t h e p r e s e n t 
c a s e , 
C o i l p l u s i s a l l e g i n g t h a t t h e i n c o r r e c t l e g a l a d v i c e 
r e s u l t e d 
i n 
t h e 
i s s u a n c e 
o f b o n d s 
t h a t 
were 
i m p r o p e r 
f r o m 
t h e i r 
i s s u a n c e 
and t h a t t h e 1999 b o n d s w o u l d n o t have b e e n 
i s s u e d 
b u t f o r 
V a n n ' s i n c o r r e c t l e g a l a d v i c e 
t h a t t h e 1999 b o n d s were 
t a x exempt. 
C o i l p l u s a l s o r e l i e s on a t o x i c - t o r t c a s e t o s u p p o r t i t s 
a r g u m e n t 
t h a t 
i t s 
c a u s e o f a c t i o n d i d n o t a c c r u e 
u n t i l 
a 
" m a n i f e s t , 
p r e s e n t i n j u r y " h a d o c c u r r e d and t h a t C o i l p l u s 
d i d 
n o t 
h a v e a m a n i f e s t , 
p r e s e n t 
i n j u r y u n t i l t h e IRS 
n o t i f i e d 
C o i l p l u s t h a t t h e 1999 b o n d s were n o t t a x exempt. I n 
G r i f f i n 
 
v. 
U n o c a l 
C o r p . , 
s u p r a , 
t h i s 
C o u r t 
h e l d 
t h a t 
i n a 
t o x i c -
s u b s t a n c e - e x p o s u r e c a s e , a p l a i n t i f f ' s c a u s e o f a c t i o n a c c r u e s 
o n l y when t h e r e h a s o c c u r r e d a m a n i f e s t , 
p r e s e n t i n j u r y . I t 
i s 
c l e a r t h a t 
G r i f f i n i s f a c t u a l l y d i s t i n g u i s h a b l e f r o m 
t h i s 
c a s e b e c a u s e 
G r i f f i n 
i n v o l v e d a c l a i m 
t h a t t h e 
p l a i n t i f f ' s 
d e c e d e n t d e v e l o p e d l e u k e m i a as a r e s u l t o f , 
b u t s u b s e q u e n t t o , 
23 
1080618 
e x p o s u r e t o a c e r t a i n t o x i c c h e m i c a l w h i l e he was e m p l o y e d b y 
t h e d e f e n d a n t ; i t d i d n o t i n v o l v e a l e g a l - m a l p r a c t i c e 
c l a i m . 
A l s o , 
i n an a p p e n d i x t o G r i f f i n ,
4 
J u s t i c e Harwood 
d i s c u s s e d 
t h e 
l e g i s l a t u r e ' s r i g h t t o p r e s c r i b e 
d i f f e r e n t s t a t u t e s 
o f 
l i m i t a t i o n s f o r d i f f e r e n t a c t i o n s , 
r e c o g n i z i n g 
t h e A L S L A i s 
one o f t h o s e 
s t a t u t e s : 
"The p r o p e r c o n s t r u c t i o n o f t h e t e r m 
' a c c r u e d ' 
i n § 6 - 2 - 3 0 ( a ) [ , A l a . Code 1975,] i n t h e c o n t e x t 
o f 
t o x i c - s u b s t a n c e - e x p o s u r e c a s e s s h o u l d h o n o r t h e r u l e 
t h a t a c a u s e o f a c t i o n a c c r u e s o n l y when t h e r e 
has 
o c c u r r e d 
a m a n i f e s t , 
p r e s e n t 
i n j u r y . I u n d e r s t a n d 
' m a n i f e s t ' 
i n 
t h i s 
c o n t e x t 
t o 
mean 
an 
i n j u r y 
m a n i f e s t e d by o b s e r v a b l e 
s i g n s 
o r symptoms 
o r t h e 
e x i s t e n c e 
o f 
w h i c h 
i s 
m e d i c a l l y 
i d e n t i f i a b l e . 
' M a n i f e s t ' 
i n t h i s 
s e n s e 
does n o t mean 
t h a t 
t h e 
i n j u r e d 
p e r s o n 
must 
be 
p e r s o n a l l y 
aware 
o f t h e 
i n j u r y o r must know i t s 
c a u s e o r o r i g i n . 
A l l t h a t 
i s 
r e q u i r e d 
i s t h a t 
t h e r e 
be i n f a c t a 
p h y s i c a l 
i n j u r y 
m a n i f e s t e d , 
e v e n 
i f t h e i n j u r e d p e r s o n i s 
i g n o r a n t 
o f 
i t 
f o r 
some 
p e r i o d 
a f t e r 
i t s 
d e v e l o p m e n t . 
T h i s a p p r o a c h i s m a n d a t e d by t h e r u l e 
s t a t e d 
as e a r l y as K e l l y v. 
S h r o p s h i r e , 
199 A l a . 
602 
, 605, 75 So. 2 9 1 , 2 
92 
(1917 
), and as 
l a t e 
as 
G i l m o r e v . M & B R e a l t y 
Co., L L C , 895 So. 2d 200 
, 
208 
( A l a . 2 0 0 4 ) , 
and on i n n u m e r a b l e 
o c c a s i o n s 
i n 
b e t w e e n , t h a t 
' p l a i n t i f f ' s i g n o r a n c e o f t h e t o r t o r 
i n j u r y , 
a t 
l e a s t 
i f 
t h e r e 
i s 
no 
f r a u d u l e n t 
c o n c e a l m e n t by d e f e n d a n t , 
[does n o t ] p o s t p o n e t h e 
r u n n i n g 
o f t h e s t a t u t e 
[ o f l i m i t a t i o n s ] u n t i l t h e 
t o r t 
o r 
i n j u r y i s d i s c o v e r e d . ' 
An 
o f t - d e c l a r e d 
c o m p a n i o n 
r u l e i s t h a t 
' t h i s 
C o u r t 
w i l l 
n o t 
a p p l y 
4 I n U n o c a l , 
t h i s C o u r t a d o p t e d J u s t i c e Harwood's 
d i s s e n t 
i n C l i n e v. A s h l a n d , I n c . , 970 So. 2d 755 ( A l a . 
2 0 0 7 ) , as t h e 
o p i n i o n o f t h e C o u r t i n G r i f f i n and a t t a c h e d t h e d i s s e n t as an 
a p p e n d i x . 
24 
1080618 
t h e 
d i s c o v e r y 
r u l e 
u n l e s s 
i t i s 
s p e c i f i c a l l y 
p r e s c r i b e d by t h e L e g i s l a t u r e . ' T r a v i s v. Z i t e r , 681 
So. 2d 1348, 1354 ( A l a . 1 9 9 6 ) . 
"We 
o p e r a t e 
w i t h i n o u r p r o p e r 
s p h e r e when 
we 
u n d e r t a k e t o d e t e r m i n e t h e c o n s t r u c t i o n 
t h a t 
s h o u l d 
be 
a s c r i b e d 
t o t h e 
l e g i s l a t i v e l y 
p r e s c r i b e d 
t e r m 
' a c c r u e d ' i n § 6 - 2 - 3 0 ( a ) ; we w o u l d o p e r a t e 
o u t s i d e 
t h a t s p h e r e were we t o a t t e m p t t o add t o t h e t e x t o f 
§ 
6-2-30(a) 
so 
as 
t o 
s u p e r i m p o s e 
some 
s o r t 
o f 
d i s c o v e r y 
f e a t u r e . 
T h u s , I r e j e c t t h e n o t i o n 
t h a t 
o u r 
p r i o r and p r e s e n t r e q u i r e m e n t o f a 
' m a n i f e s t , ' 
p r e s e n t i n j u r y means t h a t t h e i n j u r y must be o b v i o u s 
t o and known b y t h e i n j u r e d p a r t y . T h a t w o u l d 
s i m p l y 
r e p r e s e n t 
t h e c r e a t i o n o f a t y p e o f d i s c o v e r y 
r u l e . 
I 
r e a f f i r m t h a t 
c r e a t i o n o f a d i s c o v e r y 
r u l e 
l i e s 
 
w i t h i n 
t h e p r o v i n c e 
o f t h e 
l e g i s l a t u r e , 
w h i c h i s  
e q u i p p e d 
t o 
w e i g h 
t h e 
c o m p e t i n g 
p u b l i c - p o l i c y 
 
a r g u m e n t s 
and t o 
f a s h i o n 
v a r i a t i o n s o f 
d i s c o v e r y 
 
p r i n c i p l e s t a i l o r e d t o t h e p a r t i c u l a r n a t u r e o f e a c h  
a f f e c t e d c a u s e o f a c t i o n . 
The l e g i s l a t u r e has shown  
i t s s p e c i a l c a p a b i l i t y i n t h a t r e g a r d by s t r u c t u r i n g  
v a r i a t i o n s 
o f d i s c o v e r y 
f e a t u r e s 
i n t h e 
f o l l o w i n g  
s t a t u t e s : 
§ 6-2-3; § 6 - 2 - 3 0 ( b ) ; § 6-5-482; § 6-5-
5 0 2 ( b ) ; § 6 - 5 - 5 7 4 ( a ) ; § 7 - 2 A - 5 0 6 ( 2 ) ; § 8-19-14; § 8¬
2 
6 A - 1 6 ( c ) ; and § 8-2 7-5." 
990 So. 2d a t 310-11 ( e m p h a s i s a d d e d ) . 
W i t h r e g a r d 
t o C o i l p l u s ' s f r a u d 
c l a i m , § 6-5-574(a) i s 
" s u b j e c t 
t o a l l 
e x i s t i n g p r o v i s i o n s 
o f l a w r e l a t i n g t o t h e 
c o m p u t a t i o n 
o f 
s t a t u t o r y 
p e r i o d s 
o f 
l i m i t a t i o n s f o r t h e 
commencement o f a c t i o n s , " 
i n c l u d i n g § 6-2-3. § 
6 - 5 - 5 7 4 ( b ) . 
S e c t i o n 
6-2-3 
i s an 
a c c r u a l 
p r o v i s i o n 
a p p l i c a b l e 
t o 
f r a u d 
c l a i m s and p r o v i d e s 
as f o l l o w s : 
25 
1080618 
" I n 
a c t i o n s 
s e e k i n g 
r e l i e f 
o f 
t h e 
g r o u n d 
o f 
f r a u d where t h e s t a t u t e has 
c r e a t e d 
a b a r , 
t h e 
c l a i m 
must n o t 
be 
c o n s i d e r e d 
as h a v i n g a c c r u e d 
u n t i l 
t h e 
d i s c o v e r y 
by 
t h e 
a g g r i e v e d 
p a r t y 
o f 
t h e 
f a c t 
c o n s t i t u t i n g t h e f r a u d , a f t e r w h i c h he must h a v e 
two 
y e a r s w i t h i n w h i c h t o p r o s e c u t e h i s 
a c t i o n . " 
C o i l p l u s 
s t a t e s 
t h a t 
t h e 
e - m a i l 
f r o m 
t h e 
IRS 
e m p l o y e e 
d a t e d 
J u l y 
16, 
2001, 
f i r s t 
p u t 
C o i l p l u s on 
n o t i c e 
t h a t 
t h e 
1999 
b o n d s may 
n o t have b e e n t a x exempt and 
t h a t 
i t s a c t i o n 
was 
f i l e d on O c t o b e r 30, 2002. 
C o i l p l u s a r g u e s t h a t 
t h i s 
was 
w e l l 
w i t h i n 
t h e 
t w o - y e a r 
l i m i t 
f o r a 
f r a u d u l e n t - s u p p r e s s i o n 
c l a i m 
as 
s e t 
o u t 
i n 
§ 
6-2-3 
and 
w i t h i n 
t h e 
f o u r - y e a r 
b a r 
a p p l i c a b l e 
t o 
a l l c l a i m s 
b r o u g h t u n d e r 
§ 
6 - 5 - 5 7 4 ( b ) . 
The 
d e f e n d a n t s a r g u e t h a t C o i l p l u s ' s f r a u d u l e n t - s u p p r e s s i o n 
c l a i m 
i s w i t h o u t 
m e r i t . 
C o i l p l u s 
a l l e g e d 
i n 
i t s c o m p l a i n t 
t h a t 
t h e 
d e f e n d a n t s 
s u p p r e s s e d m a t e r i a l 
f a c t s t h a t t h e y were u n d e r an 
o b l i g a t i o n 
t o c o m m u n i c a t e t o C o i l p l u s as i t s c o u n s e l ; 
t h e f a c t s a l l e g e d l y 
s u p p r e s s e d were t h a t 
t h e 
d e f e n d a n t s : 
" ( a ) 
f a i l e d 
t o a d v i s e 
[ C o i l p l u s ] t h a t 
t h e 
1999 
Bonds w o u l d n o t , u n d e r t h e c i r c u m s t a n c e s , 
q u a l i f y as 
a t a x - e x e m p t i s s u e u n d e r S e c t i o n 
144 
o f t h e Code; 
"(b) 
f a i l e d t o a d v i s e 
[ C o i l p l u s ] t h a t [ C o i l p l u s ] 
had 
t o 
r e t i r e 
t h e 
1984 
Bond 
i s s u e 
p r i o r 
t o 
t h e 
c l o s i n g 
o f 
t h e 
1999 
B o n d s , 
i n 
o r d e r 
f o r 
t h e 
1999 
Bonds t o q u a l i f y as 
t a x - e x e m p t ; 
26 
1080618 
" ( c ) 
f a i l e d t o a s s u r e t h a t t h e 1984 Bond 
i s s u e 
was 
r e t i r e d 
p r i o r t o t h e c l o s i n g o f t h e 1999 
Bonds 
so t h a t t h e a g g r e g a t e p r i n c i p a l amount o f a l l 
b o n d s 
o u t s t a n d i n g 
a t 
s u c h 
t i m e 
d i d 
n o t 
e x c e e d 
$ 1 0 , 0 0 0 , 0 0 0 . 0 0 ; 
"(d) 
f a i l e d 
t o 
a d v i s e 
[ C o i l p l u s ] 
o f 
t h e 
r e q u i r e m e n t s f o r t h e q u a l i f i c a t i o n o f t h e 1999 Bonds 
as t a x - e x e m p t ; 
and 
" ( e ) 
i n 
g e n e r a l , 
f a i l e d 
t o 
p r o p e r l y 
and 
p r o f e s s i o n a l l y p e r f o r m t h e i r d u t i e s as b o n d 
c o u n s e l 
and c l o s i n g 
a t t o r n e y s . " 
C o i l p l u s has t h e b u r d e n o f p r o v i n g 
t h a t i t s f r a u d 
c l a i m 
comes w i t h i n t h e t o l l i n g p r o v i s i o n o f § 6-2-3. 
See Ex 
p a r t e  
S e a b o l , 
782 
So. 
2d a t 215 
( " [ U ] n d e r 
§ 6 - 5 - 5 7 4 ( b ) , 
a 
l e g a l 
m a l p r a c t i c e 
a c t i o n 
b a s e d 
on 
a l l e g a t i o n s o f 
f r a u d 
must 
be 
commenced 
w i t h i n 
two 
y e a r s 
a f t e r 
t h e 
d i s c o v e r y 
by 
t h e 
a g g r i e v e d 
p a r t y o f t h e f a c t c o n s t i t u t i n g t h e f r a u d ; 
p r o v i d e d , 
h o w e v e r , 
t h a t no a c t i o n may be commenced more t h a n f o u r y e a r s 
a f t e r t h e a c t o r a c t s 
c o n s t i t u t i n g f r a u d . 
The b u r d e n i s on 
t h e p l a i n t i f f t o show t h a t he comes w i t h i n t h e § 6-2-3 
t o l l i n g 
p r o v i s i o n . " ) . 
E v e n 
a s s u m i n g 
t h a t 
C o i l p l u s met 
i t s b u r d e n 
o f 
s h o w i n g 
t h a t i t s f r a u d c l a i m came w i t h i n t h e t o l l i n g p r o v i s i o n , i t has 
n o t met t h e e l e m e n t s o f f r a u d u l e n t s u p p r e s s i o n , w h i c h a r e : (1) 
t h e 
d e f e n d a n t h a d 
a d u t y t o d i s c l o s e an 
e x i s t i n g 
m a t e r i a l 
27 
1080618 
f a c t ; (2) t h e d e f e n d a n t 
c o n c e a l e d o r s u p p r e s s e d 
t h a t 
m a t e r i a l 
f a c t ; (3) t h e d e f e n d a n t ' s 
s u p p r e s s i o n i n d u c e d t h e p l a i n t i f f t o 
a c t o r r e f r a i n 
f r o m 
a c t i n g ; and (4) t h e p l a i n t i f f 
s u f f e r e d 
a c t u a l damage as a p r o x i m a t e 
r e s u l t . 
F r e i g h t l i n e r , LLC v.  
W h a t l e y 
C o n t r a c t 
C a r r i e r s , L L C , 932 So. 2d 883, 8 
91 
( A l a . 
2 0 0 5 ) . 
" ' [ A ] n 
a c t i o n f o r s u p p r e s s i o n 
w i l l l i e o n l y i f 
t h e 
d e f e n d a n t 
a c t u a l l y knows t h e f a c t a l l e g e d t o be 
s u p p r e s s e d . ' " 
C o o k ' s P e s t C o n t r o l , I n c . 
v. R e b a r , [Ms. 1050029, F e b r u a r y 20, 
2009] 
So. 3d 
, 
( A l a . 
200 
9) ( q u o t i n g M c G a r r y v . 
F l o u r n o y , 624 So. 2d 1359, 1362 ( A l a . 
1 9 9 3 ) ) . 
I n t h e p r e s e n t 
c a s e , 
n o t h i n g i n C o i l p l u s ' s c o m p l a i n t 
a l l e g e s 
t h a t V a n n , a t 
t h e t i m e t h e 1999 b o n d s were i s s u e d , knew t h a t t h e b o n d s were 
t a x a b l e , y e t i n t e n t i o n a l l y 
i s s u e d a l e g a l o p i n i o n s t a t i n g t h a t 
t h e 1999 b o n d s were t a x exempt. 
T h e r e h a s b e e n no 
e v i d e n c e 
p r e s e n t e d 
i n d i c a t i n g t h a t Vann knew t h a t t h e 1999 b o n d s were 
t a x a b l e when he a d v i s e d C o i l p l u s t h a t t h e b o n d s w o u l d be t a x 
exempt. 
T h e r e f o r e , C o i l p l u s ' s s u p p r e s s i o n c l a i m 
f a i l s . 
C o n c l u s i o n 
B e c a u s e 
C o i l p l u s ' s 
l e g a l - m a l p r a c t i c e 
a c t i o n 
i s 
t i m e -
b a r r e d 
u n d e r 
a l l a p p l i c a b l e 
p r o v i s i o n s 
o f 
§ 
6-5-574, 
r e g a r d l e s s 
o f w h e t h e r 
t h e 
" o c c u r r e n c e " 
a p p r o a c h 
o r t h e 
28 
1080618 
"damage" 
a p p r o a c h 
i s u s e d 
t o d e t e r m i n e 
when 
t h a t 
a c t i o n 
a c c r u e d , and b e c a u s e C o i l p l u s 
f a i l e d t o p r e s e n t any e v i d e n c e 
t o s u p p o r t a c l a i m o f f r a u d u l e n t s u p p r e s s i o n , we 
a f f i r m t h e 
t r i a l 
c o u r t ' s summary j u d g m e n t i n f a v o r o f t h e d e f e n d a n t s . 
AFFIRMED. 
Cobb, C . J . , and L y o n s , 
S t u a r t , and M u r d o c k , J J . , c o n c u r . 
29