Opinion ID: 1593668
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Heading: Neylans' Statute of Limitations Defense.

Text: The core issue in this appeal is whether the Mosers' malpractice counterclaim was barred by Iowa Code section 614.1(4), the statute of limitations relied upon by the Neylans. (We note parenthetically that Neylans have not contended that the shorter two-year statute of limitations of Iowa Code section 614.1(2) would here apply, so we do not consider that separate statutory limit.) Although the district court decided the limitations issue before us by sustaining the Neylans' special appearance, we treat the ruling as the granting of a motion to dismiss because it is the substance of a motion, not its label, that discloses its character. See State v. Cullen, 357 N.W.2d 24, 27 (Iowa 1984). Lack of a court's subject matter or in personam jurisdiction may properly be raised by special appearance (Iowa R.Civ.P. 66), but the running of a statute of limitations under Iowa Code chapter 614 does not deprive the court of jurisdiction. The bar of the statute of limitations is properly presented by a motion to dismiss when the necessary facts appear on the face of the pleadings, otherwise by affirmative defense and motion for summary judgment. See Pride v. Peterson, 173 N.W.2d 549, 554 (Iowa 1970); I A. Vestal and P. Willson, Iowa Practice § 15:13 (1983 rev. ed.). The parties and the district court treated the special appearance as a motion to dismiss, and we do likewise in reaching the substantive limitations question. We view the pleaded facts in the light most favorable to the Mosers, the parties resisting the Neylans' reliance on section 614.1(4). The burden was on Neylans to establish their limitations defense but on the Mosers to demonstrate their reliance on any exception to the ordinary limitations period. See Beeck v. Aquaslide `N' Dive Corp., 350 N.W.2d 149, 157 (Iowa 1984); Franzen v. Deere and Co., 334 N.W.2d 730, 732 (Iowa 1983). This case poses very specific questions: When did each of the Mosers' two pleaded legal malpractice causes of action accrue? In Millwright v. Romer, 322 N.W.2d 30 (Iowa 1982), we explained that when a claimant in a legal malpractice action relies on the so-called discovery rule the cause of action accrues when the harm or damage was ascertainable or discoverable by the use of the means of information within [the claimant's] reach, with the vigilance which the law requires of him. Id. at 32-33. Mosers here rely on the discovery rule, and we therefore must apply the principles articulated in Millwright to the pleaded facts in this case. A. The alleged failure to present evidence of erosion. Mosers contend in one count of their counterclaim that Neylans negligently failed to present adequate evidence to support Mosers' claim of damages caused by erosion of the land and deterioration of the buildings on the farm. The district court measured the five-year period for bringing that cause of action from August 1, 1979 when the trial court entered judgment denying that specific claim for damages. It wrote that Mosers discovered or should have discovered their alleged injury as of that date.... Mosers, on the other hand, argue that the cause of action did not accrue until November 25, 1981 when we filed Moser II affirming that decision of the district court. Mosers argue they had a right to rely upon the skill and knowledge of the Neylans who had advised them to appeal that adverse ruling and handled the appeal for them. We recognize that some courts, like the district court here, have concluded that the date of a final district court ruling should mark the time when a legal malpractice cause of action accrues, because the claimant is then formally advised of an adverse ruling and resulting damage. See, e.g., Farner v. Fireman's Fund Insurance Co., 748 F.2d 551, 555 (10th Cir.1984) (plaintiff suffered an injury directly attributable to attorney's negligence when state court ruled); Hunt v. Bittman, 482 F.Supp. 1017, 1022 (D.D.C.1980), aff'd, 652 F.2d 196 (D.C.Cir.), cert. denied, 454 U.S. 860, 102 S.Ct. 315, 70 L.Ed.2d 158 (1981) (criminal defendant's cause of action against attorney for malpractice accrued when he was sentenced and incarcerated after pleading guilty); Bell v. Hummel and Pappas, 136 Cal.App.3d 1009, 1017, 186 Cal.Rptr. 688, 694 (1982) (damage occurred when court denied appellant right to join wife's complaint as co-plaintiff); Don Reid Ford, Inc. v. Feldman, 421 So.2d 184, 185 (Fla.Dist. Ct.App.1982) (damage occurred when judgment was entered against the insured because of the alleged malpractice). Other courts, however, have stated that the date of injury coincides with the last possible date when the attorney's negligence becomes irreversible. See R. Mallen and V. Levit, Legal Malpractice § 390, at 457 (1981). In Woodruff v. Tomlin, 511 F.2d 1019 (6th Cir.1975), the court held that judgment did not become final until the court of appeals decided the appeal and the time to appeal to the [state] supreme court... had expired. Id. at 1021. See also AMFAC Distribution Corp. v. Miller, 138 Ariz. 155, 156-59, 673 P.2d 795, 796-99 (Ct.App.1983); Bonanno v. Potthoff, 527 F.Supp. 561, 565 (N.D.Ill.1981). We adopt the latter approach, for it comports with our view that a client has a right to rely upon the superior skill and knowledge of his attorney. Millwright, 322 N.W.2d at 34. As the court in AMFAC reasoned, [U]nder our rule, a client will not have to challenge and question every decision made by his attorney or routinely doublecheck his attorney's conduct during litigation.... Thus, the client will have peace of mind to allow the legal process to work fully and finally in hopes that his position will ultimately be vindicated and will not be forced to disrupt his relationship with his lawyer to preserve what he thinks may be a valid malpractice claim. AMFAC, 138 Ariz. at 159, 673 P.2d at 799. Mosers' counterclaim alleging that Neylans inadequately presented evidence of injury and economic waste accrued no earlier than November 25, 1981 when our court in Moser II affirmed the trial court decision concerning those factual issues in the underlying lawsuit. B. The failure to file an attorney fee affidavit. The district court also adopted Neylans' theory that Iowa Code section 614.1(4) barred Mosers' malpractice counterclaim based on the Neylans' failure to file an attorney fee affidavit to support Mosers' attorney fee demand in the underlying lawsuit. Neylans contended that the cause of action accrued on July 29, 1977 when our court decided in Moser I that Mosers had a valid and enforceable contract to buy the farm ( Moser I, 256 N.W.2d at 907) yet no attorney fees were awarded as a part of the court costs assessed to the defendants. Id. at 913. Here again, as with the other malpractice count, Neylans continued to represent Mosers for several years after Moser I was decided, and it was not until our decision in Moser III (334 N.W.2d at 718-19) that we finally put to rest the Mosers' claim for attorney fees. The Mosers' cause of action for malpractice in that connection did not accrue until June 15, 1983, the date when Moser III was decided. The trial court therefore erred in deciding that the Mosers' legal malpractice counterclaim was barred by the statute of limitations relied upon by Neylans.