Opinion ID: 2779227
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Heading Rank: 2

Heading: Summary Judgment on Claims Against Meloy.

Text: Meloy’s motion for summary judgment raised the statute of limitations as an affirmative defense. The district court found this defense meritorious and granted summary judgment. The district court noted the limitations period of five years for legal malpractice actions does not begin to run until the plaintiff discovers the injury. See Iowa Code § 614.1(4) (2005); Venard v. Winter, 524 N.W.2d 163, 166 (Iowa 1994); Franzen v. Deere & Co., 377 N.W.2d 660, 662 (Iowa 1985). However, the district court held the plaintiffs were deemed to have 3Because Vossoughi filed the second petition against Meloy more than six months after dismissing the first petition, the present claim is not considered a continuation of the same action under Iowa Code section 614.10 (2005). 7 discovered the injury on March 29, 2007, when Vossoughi signed the warranty deed. The discovery occurred on that date, the district court concluded, because Vossoughi’s signature on the deed imputes to him knowledge of the deed’s contents. See Huber v. Hovey, 501 N.W.2d 53, 55 (Iowa 1993) (“[F]ailure to read a contract before signing it will not invalidate the contract. Absent fraud or mistake, ignorance of a written contract’s contents will not negate its effect.” (Citation omitted.)). The district court further held in the alternative that the plaintiffs discovered the injury when the warranty deed was recorded on April 9, 2007. See Iowa Code § 558.55 (“[T]he filing and indexing [of deeds in the recorder’s office] shall constitute constructive notice to all persons of the rights of the grantees conferred by the instruments.”). Thus, the district court concluded the limitations period for filing the instant claim against Meloy expired on either March 29, 2012, or April 9, 2012, and granted summary judgment to Meloy because the plaintiffs’ petition asserting the instant claim against him was not filed until June 26, 2012. The plaintiffs filed a motion to amend the court’s ruling, contending there was no injury as a result of Meloy’s actions in drafting the original agreement until Mark and PPM stopped making payments in February 2008. The motion asserted that although Meloy’s negligence may have left the contract payment obligations unsecured as early as September 2006, the failure to secure the sellers’ interests represented only a prospect of future harm at that point, and a mere prospect of harm could not have given rise to an actionable claim for legal malpractice. The district court considered this argument, but rejected it: [T]he Iowa Supreme Court . . . has adopted the rule that the date of injury “coincides with the last possible date when the attorney’s negligence became irreversible.” Neylan v. Moser, 400 N.W.2d 538, 542 (Iowa 1987). In Neylan, the Court was 8 distinguishing between the date of an adverse trial court verdict and the date of its final appeal, deciding the statute of limitations was tolled until the later date. Id. Applying this rule here, any negligence by Meloy became “irreversible” when the deed was signed and recorded. At that point, plaintiffs became insecure and had no remedy in the event the buyers defaulted. Thus, based on the holding in Neylan, the statute of limitations commenced to run in April 2007. III. Summary Judgment on Claims Against Polaschek. Polaschek’s motion for summary judgment asserted his acts and omissions could not have been the cause of any damages. Even if it is assumed he breached his duty by recording the warranty deed without incorporating the restrictive terms of the addendum, Polaschek posited the only consequence was the unavailability of the addendum’s liquidated damages remedy. The bankruptcy discharges of the plaintiffs’ contract claims were, Polaschek contended, independently sufficient causes of their inability to collect damages. The district court granted Polaschek’s motion, reasoning that a judgment in favor of Vossoughi and C, N, & A, Inc. would not have been collectible absent Polaschek’s alleged negligence. Because it determined any judgment entered against Mark or PPM would have been uncollectible as a consequence of their bankruptcy discharges, the district court concluded any breach of duty by Polaschek could not have been a “but for” cause of the claimed damages. Vossoughi and C, N, & A, Inc. appealed, and we retained the appeal.