Court Opinion

ID: 4089685
Source: CourtListenerOpinion
Date Created: 2016-10-14 15:14:13.55497+00
Date Added: 2024-06-11T14:08:04.925364
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                           AT KNOXVILLE
                                 August 9, 2016 Session

           ATHENA OF S.C., LLC ET AL. V. JAMES F. MACRI, JR. ET AL.

                    Appeal from the Circuit Court for Knox County
                      No. 2-4-15     Deborah C. Stevens, Judge

             No. E2016-00224-COA-R3-CV-FILED-OCTOBER 14, 2016

The plaintiffs sued an attorney for legal malpractice related to the enforcement of two
promissory notes. The plaintiffs purchased these notes, which were secured by property
at a real estate development, from the two other defendants in this lawsuit. During the
purchase of these notes, the sellers were represented by the defendant-attorney in this
lawsuit. Subsequently, the plaintiffs hired the same attorney to help them collect the
amounts due under the notes from the real estate developer. The attorney drafted a
complaint and an agreed judgment for each of the promissory notes and filed these
documents in the Circuit Court for Knox County. The circuit court entered the agreed
judgments the same day they were filed. When the plaintiffs attempted to sell the
property that secured the promissory notes, the real estate developer‟s former business
partner filed a motion for an injunction in federal court. The federal district court issued
two injunction orders, one in May 2012 and one in August 2012. Both orders were based
on findings that the transaction by which the plaintiffs acquired the promissory notes was
likely fraudulent. On January 6, 2014, the parties who sold the notes to plaintiffs filed an
affidavit that, according to the plaintiffs, admitted that the sale of the notes to plaintiffs
was fraudulent. On January 6, 2015, the plaintiffs filed this action against their former
attorney and the parties that sold them the promissory notes. The attorney filed a motion
to dismiss under Tenn. R. Civ. P. 12.02(6), arguing that the plaintiffs‟ claim was time
barred because it accrued in August 2012. The trial court granted this motion because it
determined that the plaintiffs knew they had suffered an injury when the district court
issued the second injunction order in August 2012. We affirm.

  Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Affirmed

FRANK G. CLEMENT, JR., P.J., M.S., delivered the opinion of the Court, in which D.
MICHAEL SWINEY, C.J., and THOMAS R. FRIERSON, II, J., joined.

Mark E. Brown, Knoxville, Tennessee, for the appellants, Athena of S.C., LLC and Ted
Doukas.
Darryl G. Lowe, Knoxville, Tennessee, for the appellee, Gregory D. Shanks d/b/a Shanks
and Blackstock.

                                              OPINION

       The plaintiffs in this action are Ted Doukas and Athena of S.C., LLC (collectively
referred to hereinafter as “Plaintiffs”).1 This appeal arises from the dismissal of their legal
malpractice claim against their former attorney, Gregory D. Shanks.

        In 2011, Ted Doukas negotiated an agreement with Tennessee Land and Lakes,
LLC (“TLL”) and James F. Macri, Jr., pursuant to which his limited liability company,
Athena, would acquire two promissory notes that were owned at the time by SunTrust
Bank.2 The notes to be acquired by Athena were secured by a deed of trust covering 120
lots and 11 condominiums in a real estate development called “Rarity Bay.” The debtors
on the notes were two business entities owned by real estate developer Michael Ross.
Pursuant to the agreement, Mr. Doukas and Athena made a down payment of $230,000 to
Mr. Macri and TLL, who then purchased the notes from SunTrust Bank for over
$1,500,000. After acquiring the notes, Mr. Macri and TLL assigned the notes (hereinafter
“Rarity Bay notes”) to Athena in consideration for Plaintiffs‟ payment of the balance of
the purchase price with interest to Mr. Macri and TLL. Gregory D. Shanks, the defendant
in this appeal, was the attorney for Mr. Macri and TLL in each of these transactions.

       In the interim, Mr. Macri and TLL acquired for themselves a promissory note
associated with Rarity Enclave, another of Mr. Ross‟s real estate developments. Mr.
Shanks also represented Mr. Macri and TLL in this transaction.

        After acquiring the Rarity Bay notes from Mr. Macri and TLL, Plaintiffs hired Mr.
Shanks to help them collect on the notes. As part of this process, Mr. Shanks prepared
two complaints and two agreed judgments, each against Mr. Ross and one of his business
entities. Mr. Shanks filed these complaints and judgments in the Circuit Court for Knox
County on November 30, 2011, and the circuit court entered the agreed judgments that
same day.

       During this time, Mr. Ross and many of his companies were defendants in a
lawsuit that Mr. Ross‟s former business partner, Robert T. Stooksbury, Jr., had filed in
the United States Court for the Eastern District of Tennessee. In September 2011, a
federal magistrate judge issued an order recommending that the district judge enter a

       1
           Mr. Doukas is the owner and principal of Athena of S.C., LLC.
       2
           Mr. Macri was the owner and principal of Tennessee Land and Lakes, LLC.

                                                  -2-
default judgment against Mr. Ross. Stooksbury v. Ross, No. 3:09-CV-498, 2011 WL
5834015, at *7 (E.D. Tenn. Sept. 28, 2011), report and recommendation adopted in part,
rejected in part, No. 3:09-CV-498, 2011 WL 5833878 (E.D. Tenn. Nov. 21, 2011).
Although the district court rejected this part of the magistrate judge‟s recommendation in
November 2011, it later entered a default judgment against Mr. Ross in favor of Mr.
Stooksbury in January 2012. See Stooksbury v. Ross, No. 3:09-CV-498, 2012 WL
262888, at *4 (E.D. Tenn. Jan. 30, 2012).

       In May 2012, Plaintiffs published a notice of foreclosure for the 11 condominiums
that secured the Rarity Bay notes. In response, Mr. Stooksbury filed a motion to enjoin
the sale in federal court. Among other things, he asserted that Mr. Ross entered the
agreed judgments with Athena “after the magistrate judge recommended default be
granted in this case, without adequate consideration and for the purpose of defrauding
[Mr. Stooksbury] as a creditor.” See Stooksbury v. Ross, No. 3:09-CV-498, 2012 WL
1933802, at *3 (E.D. Tenn. May 29, 2012). Athena made a special appearance in federal
court to oppose Mr. Stooksbury‟s motion. Id. at *4.

       On May 29, 2012, the district court entered an order that enjoined the foreclosure
sale until a receiver could be appointed. Id. at *7. In relevant part, the district court‟s
order stated:

       The Court also finds [Mr. Stooksbury] has shown that it is likely the
       assignment of the Deed of Trust to Athena is fraudulent. While on its face
       the Deed of Trust appears legitimate, the Court finds it must consider the
       assignment, and the timing of the assignment, in light of the various
       transfer of assets from defendants to Athena and other entities controlled by
       Mr. Doukas. [Mr. Stooksbury] has submitted multiple documents into the
       record that raise a strong inference that defendants are fraudulently
       transferring property and assets to Mr. Doukas and the entities he owns,
       including Athena. In making this determination, the Court has considered,
       among other documents, . . . the agreed judgments filed on the same day as
       the complaints on promissory notes and guarantees Athena asserted
       against certain defendants in state court . . . .

Id. at *5 (emphasis added).3

      In July 2012, Plaintiffs published a notice of foreclosure for the 120 lots that
secured the Rarity Bay notes, and Mr. Stookbury filed a motion to enjoin the sale in

       3
          In the district court‟s order, the term “Deed of Trust” refers to the document that granted a
security interest in some of the real property in Rarity Bay. See Stooksbury v. Ross, No. 3:09-CV-498,
2012 WL 1933802, at *4 (E.D. Tenn. May 29, 2012).

                                                 -3-
federal court. The district court granted Mr. Stooksbury‟s motion and enjoined the sale on
August 1, 2012. The district court stated:

       the Court finds [Mr. Stooksbury] has shown that it is likely the proposed
       foreclosure of the Rarity Bay Lots relates to the series of transactions and
       conveyances the Court found likely to be fraudulent in the [May 29, 2012]
       Injunction Order. . . . [Mr. Stooksbury] has submitted the notice of
       substitute trustee sale relating to the Rarity Bay Lots which notes that a
       deed of trust was assigned by SunTrust Bank to [TLL] on October 6, 2011,
       and was subsequently assigned by [TLL] to Athena on November 28,
       2011 . . . . While Athena has filed, in support of its response,
       documentation relating to these transactions, the Court has previously
       considered most of these documents and other related records pertaining to
       the transactions between Athena and the judgment debtors [i.e. Mr. Ross
       and several of his business entities] in this case and found that the series of
       transactions and conveyances raised a strong inference that such
       transactions and conveyances were fraudulent.

Stooksbury v. Ross, No. 3:09-CV-498, 2012 WL 12841901, at *4 (E.D. Tenn. Aug. 1,
2012).

        On January 6, 2014, Mr. Macri and TLL settled a claim involving the Rarity
Enclave property with the receiver appointed by the district court. As part of the
settlement Mr. Macri submitted an affidavit that, according to Plaintiffs, admitted that the
sale of Rarity Bay notes to Athena was fraudulent.

       One year later, on January 6, 2015, Plaintiffs filed this suit against Mr. Macri,
TLL, and Mr. Shanks, asserting claims of fraud and interference with business
relationships against Mr. Macri and TLL and claims of legal malpractice against Mr.
Shanks. Specifically, Plaintiffs alleged that Mr. Shanks had committed legal malpractice
by preparing and entering two agreed judgments that were rendered worthless after Mr.
Macri filed the January 2014 affidavit. In relevant part, the complaint states:

             75. As a result of the injunctions, Athena was faced with rising costs
       on its collateral including damage to the condominiums and real property
       taxes, all while seeing the value of its collateral decrease.

       ....

              93. [Plaintiffs] sue the Defendant Shanks for liability for negligence
       in the performance of his professional duties as an attorney retained by
       Doukas and Athena. Specifically, [Plaintiffs] allege that Shanks undertook
       a duty to represent them according to the applicable standard of care for

                                            -4-
      attorneys within the State of Tennessee. [Plaintiffs] allege that Shanks
      breached that duty of care by preparing and entering two (2) Agreed
      Judgments on behalf of [Plaintiffs], which were the result of the sale of Sun
      Trust [sic] notes to [Plaintiffs] from another of Shanks‟ clients Macri and
      Tennessee Land. That sale has been conceded by Macri and Tennessee
      Land to be fraudulent rending [sic] the Agreed Judgments prepared by
      Shanks as worthless and as a result, Shanks has fallen below the applicable
      standard of care for an attorney licensed in the State of Tennessee. As a
      result [Plaintiffs] have been damaged in the amount of [$7,727,800.13],
      representing the total amount of the Agreed Judgments, plus pre-judgment
      and post-judgment interest, all of which are the direct and proximate result
      of Shanks‟ actions or inactions in their [sic] representation of [Plaintiffs].

        Mr. Shanks filed a motion to dismiss Plaintiffs‟ legal malpractice claim under
Tenn. R. Civ. P. 12.02(6), arguing that the claim was barred by the one-year statute of
limitations for legal malpractice claims because it accrued when the federal court entered
the injunction orders in May and August of 2012. The trial court granted this motion and
dismissed the malpractice claim, stating:

      [T]here is no question that the Plaintiffs suffered a loss of a legal[ly]
      cognizable right when they were enjoined from foreclosing on the eleven
      (11) condominiums by the District Court Order of May 23, 2012 and at the
      latest, when the District Court enjoined the foreclosure of the Rarity Bay
      lots on August 1, 2012. Both of the Orders specifically reflect that the
      foreclosures are based on a series of transactions “that appear to be
      fraudulent”. . . . For the purpose of the statute of limitations in the subject
      Complaint, the Plaintiffs were prevented from foreclosing and according to
      their complaint began to suffer damages when the District Court enjoined
      the foreclosure in May and August of 2012.

             The Plainitff[s] further assert[] that the statute did not run until the
      affidavit was signed by Mr. Macri on January 6, 2014 allegedly admitting
      that the underlying action was fraudulent. “Fraudulent activity” or
      “fraudulent intent” in the [Rarity Bay] notes is exactly what was at issue
      when the United States District Court for the Eastern District of Tennessee
      at Knoxville issued injunctions in 2012 to stop the impending
      foreclosure. . . . For purposes of determining when the Plaintiff[s] had
      knowledge of the injury, it is not necessary that the District Court issued a

                                           -5-
        final judgment or issued a ruling finding fraud in the underlying
        transaction.[4]

       The trial court further found that Mr. Macri‟s affidavit did not admit that there was
fraud related to the sale of the Rarity Bay notes. According to the trial court, “a close
reading” of the affidavit revealed that it was discussing fraud related to the Rarity
Enclave transaction rather than the sale of the Rarity Bay notes.

       The trial court certified its order as a final judgment under Tenn. R. Civ. P. 54.02,
and Plaintiffs appealed.

                                        STANDARD OF REVIEW

       Filing a motion to dismiss under Tenn. R. Civ. P. 12.02(6) is “an appropriate way
to seek to invoke the statute of limitations as grounds for dismissing a complaint.”
Redwing v. Catholic Bishop for Diocese of Memphis, 363 S.W.3d 436, 455 n.11 (Tenn.
2012). The review of a trial court‟s decision to grant a motion to dismiss under Tenn. R.
Civ. P. 12.02(6) involves a question of law, which we review de novo with no
presumption of correctness. Lind v. Beaman Dodge, Inc., 356 S.W.3d 889, 894-95 (Tenn.
2011). A motion to dismiss challenges only the legal sufficiency of the complaint. See id.
at 894; Webb v. Nashville Area Habitat for Humanity, 346 S.W.3d 422, 426 (Tenn.
2011). When considering such a motion, courts must construe the complaint liberally,
presume all its factual allegations to be true, and give the plaintiff the benefit of the
inferences that can reasonably be drawn from the pleaded facts. See Webb, 346 S.W.3d at
426; 421 Corp. v. Metro. Gov’t of Nashville & Davidson Cty., 36 S.W.3d 469, 479 (Tenn.
Ct. App. 2000).

                                                ANALYSIS

      Plaintiffs contend that the trial court‟s “close reading” of Mr. Macri‟s affidavit
converted Mr. Shanks‟ motion to a motion for summary judgment and that they should
have been allowed to submit additional evidence. Plaintiffs also argue that their

        4
         Although the trial court‟s order states that the district court issued the order enjoining the sale of
the 11 condominiums on May 23, 2012, that order was not entered until May 29, 2012. The district court
made an oral ruling on May 23 and entered its written order on May 29. See Stooksbury v. Ross, 2012 WL
1933802, at *1. Additionally, on May 23, 2012, a federal magistrate judge issued an order that, inter alia,
prohibited Mr. Ross and his business entities from concealing, assigning, or removing any money pending
the appointment of a receiver. See Stooksbury v. Ross, No. 3:09-CV-498, 2012 WL 12842528, at *5 (E.D.
Tenn. May 23, 2012). Like the district court judge‟s two injunction orders, the magistrate‟s May 23 order
contained findings that conveyances involving Athena were likely meant to conceal Mr. Ross‟s assets or
remove them “from the reach of [Mr. Stooksbury‟s] judgment.” See id. at *4.

                                                    -6-
malpractice claim against Mr. Shanks was timely because it did not accrue until Mr.
Macri filed an affidavit on January 6, 2014. We will address each argument in turn.

                        I. TREATMENT OF MR. MACRI‟S AFFIDAVIT

       A motion to dismiss under Tenn. R. Civ. P. 12.02(6) “shall be treated” as a motion
for summary judgment when “matters outside the pleading are presented to and not
excluded by the court . . . .” See Tenn. R. Civ. P. 12.02. However, exhibits attached to the
pleadings are considered to be part of the pleadings, and a court resolving a motion to
dismiss may consider such exhibits without converting the motion into a motion for
summary judgment. See Ivy v. Tenn. Dept. of Correction, No. M2001-01219-COA-R3-
CV, 2003 WL 22383613, at *3 (Tenn. Ct. App. Oct. 20, 2003). Courts may also consider
matters that the complaint incorporates by reference, items subject to judicial notice,
orders, and matters of public record without converting a motion to dismiss into a motion
for summary judgment. See Indiana State Dist. Council of Laborers v. Brukardt, No.
M2007-02271-COA-R3-CV, 2009 WL 426237, at *8 (Tenn. Ct. App. Feb. 19, 2009)
(quoting Wright and Miller, Federal Practice and Procedure, Civil § 1357, p. 376 (3d ed.
2004)).

        Plaintiffs do not contend that the trial court erred by considering Mr. Macri‟s
affidavit, which Plaintiffs themselves attached to the complaint. Instead, Plaintiffs argue
that the trial court was required to consider Mr. Macri‟s affidavit as part of the pleadings,
taking all its allegations as true and construing it liberally in Plaintiff‟s favor. According
to Plaintiffs, the trial court failed to adhere to this standard when it conducted a “close
reading” of the affidavit.

       After reviewing the record, it appears that the trial court simply read Mr. Macri‟s
affidavit and accepted it at face value. However, for purposes of this appeal we will
assume that, as Plaintiffs allege, Mr. Macri‟s affidavit does admit that the transaction by
which Plaintiffs acquired the Rarity Bay notes was fraudulent.

                II. ACCRUAL OF PLAINTIFFS‟ LEGAL MALPRACTICE CLAIM

      Plaintiffs contend that their malpractice claim against Mr. Shanks was timely filed
because it did not accrue until Mr. Shanks filed his affidavit on January 6, 2014.

       The statute of limitations in legal malpractice actions is one year from the time the
cause of action accrues. Tenn. Code Ann. § 28-3-104(c)(1). The accrual of a legal
malpractice action is determined by applying the discovery rule. Cardiac Anesthesia
Servs., PLLC v. Jones, 385 S.W.3d 530, 540 (Tenn. Ct. App. 2012) (quoting John Kohl &
Co., P.C. v. Dearborn & Ewing, 977 S.W.2d 528, 532 (Tenn. 1998)). In this context, the
discovery rule is concerned with two components: an actual injury and knowledge. See
John Kohl & Co., 977 S.W.2d at 532. As the Supreme Court has stated:

                                            -7-
       In legal malpractice cases, the discovery rule is composed of two distinct
       elements: (1) the plaintiff must suffer legally cognizable damage—an actual
       injury—as a result of the defendant's wrongful or negligent conduct, and (2)
       the plaintiff must have known or in the exercise of reasonable diligence
       should have known that this injury was caused by the defendant‟s wrongful
       or negligent conduct.

Id. (citing Carvell v. Bottoms, 900 S.W.2d 23, 28-30 (Tenn. 1995)).

        “It is not necessary that the injury become irremediable for purposes of the
limitations period; rather it must be a „legally cognizable‟ or „actual‟ injury.” Hartman v.
Rogers, 174 S.W.3d 170, 173 (Tenn. Ct. App. 2005) (citing Carvell, 900 S.W.2d at 29-
30)). An actual injury occurs “when there is a loss of a legal right, remedy or interest, or
the imposition of a liability.” Cardiac Anesthesia Servs., 385 S.W.3d at 541 (quoting
John Kohl & Co., 977 S.W.2d at 532). “An actual injury may also take the form of the
plaintiff being forced to take some action or otherwise suffer some actual inconvenience,
such as incurring an expense, as a result of the defendant‟s negligent or wrongful act.” Id.
(internal quotation marks omitted).

        A plaintiff may have either actual or constructive knowledge of an injury. John
Kohl & Co., 977 S.W.2d at 532. Actual knowledge exists when, for example, “the
defendant admits to having committed malpractice or the plaintiff is informed by another
attorney of the malpractice.” Id. In contrast, constructive knowledge exists “whenever the
plaintiff becomes aware or reasonably should have become aware of facts sufficient to
put a reasonable person on notice that an injury has been sustained as a result of the
defendant‟s negligent or wrongful conduct.” Id. “[T]here is no requirement that the
plaintiff actually know the specific type of legal claim he or she has, or that the injury
constituted a breach of the appropriate legal standard.” Id. at 533 (citing Shadrick v.
Coker, 963 S.W.2d 726, 733 (Tenn. 1998)). Furthermore, plaintiffs may not delay filing
suit until all the injurious effects of the alleged wrong are actually known to them. Id.
(quoting Carvell, 900 S.W.2d at 29).

       Before we begin our analysis of the accrual issue, we find it necessary to
acknowledge a dearth of specific factual allegations in the complaint that explain how
Mr. Shanks breached his duty to Plaintiffs or how his breach of a duty caused the agreed
judgments to become worthless. Complaints must contain more than recitations of legal
elements. See Morris Properties, Inc. v. Johnson, No. M2007-00797-COA-R3-CV, 2008
WL 1891434, at *1 (Tenn. Ct. App. Apr. 29, 2008) (quoting Lee v. State Volunteer Mut.
Ins. Co., Inc., No. E2002-03127-COA-R3-CV, 2005 WL 123492, at *10 (Tenn. Ct. App.
Jan. 21, 2005)). Instead, complaints must allege facts that, if true, support the elements of
a cause of action. See id. Failure to do so results in dismissal, even under the liberal
standard used to assess Rule 12 motions to dismiss. See Lee, 2005 WL 123492, at *10-11

                                            -8-
(affirming the dismissal of a claim for tortious interference with a contract because the
complaint contained no factual allegations that supported the elements of breach or
proximate cause); Conley v. State, 141 S.W.3d 591, 597 (Tenn. 2004) (dismissing a claim
for medical malpractice because the plaintiff did not allege any factual details supporting
the alleged malpractice or any facts that would establish a “professional/client”
relationship).

        Here, the complaint does not allege that the agreed judgments became worthless
because of an error Mr. Shanks made when he drafted and filed them. The complaint also
does not allege that Mr. Shanks filed the agreed judgments despite his actual or
constructive knowledge that the sale of the Rarity Bay notes was tainted by fraud. The
complaint does allege that Mr. Macri‟s affidavit “rend[ered] the Agreed Judgments
prepared by Shanks as worthless and as a result Shanks has fallen below the applicable
standard of care . . . .” However, nothing in the complaint indicates that Mr. Shanks was
responsible for or had anything to do with the filing of that affidavit. The complaint does
not state that Mr. Shanks drafted or filed Mr. Macri‟s affidavit. Although the complaint
states that Mr. Shanks represented Mr. Macri and TLL during the sale of the Rarity Bay
notes, it does not allege that Mr. Shanks represented Mr. Macri or TLL when they settled
the claim with the receiver. Indeed, the complaint does not even allege that Mr. Shanks
encouraged or advised Mr. Macri to file the January 2014 affidavit.

       Plaintiffs‟ reply brief perhaps comes closest to articulating the allegation that is
absent from the complaint. The reply brief states that Mr. Shanks “seeks to use a legal
technicality to avoid the fact that he has advised one client to take some action—
executing an Affidavit—that caused harm to another client.” The complaint itself does
not contain any such allegation, and we cannot supply it ourselves. Chism v. Mid-S.
Milling Co., Inc., 762 S.W.2d 552, 555 (Tenn. 1988) (“When the Court is dealing simply
with allegations of pleadings, . . . the Court is not free to construct additional facts or
allegations.”), superseded by statute on other grounds. Without an allegation similar to
the statement contained in Plaintiffs‟ reply brief, Plaintiffs‟ complaint does very little to
allege facts that support the assertion that Mr. Shanks breached his duty to Plaintiffs or
caused the agreed judgments to become worthless.

       The foregoing notwithstanding, our analysis of the accrual issue based on the facts
that the complaint alleges or incorporates by reference is as follows. With respect to Mr.
Shanks, the complaint alleges two relevant injuries. First, paragraph 75 alleges that
Athena suffered injuries including rising costs on the collateral and damage to the
condominiums “[a]s a result of the injunctions . . . .” Second, paragraph 93 alleges that
Mr. Macri‟s sworn statement that the Rarity Bay transaction was fraudulent “rend[ered]
the Agreed Judgments prepared by Shanks as worthless and as a result, Shanks has fallen
below the applicable standard of care . . . .”

                                            -9-
       To the extent that Plaintiffs‟ claim against Mr. Shanks is based on the injuries
alleged in paragraph 75, their claim accrued well before January 2014. The injunction
orders were issued in May and August of 2012, and both orders contained findings that
the transaction involving the Rarity Bay notes was likely fraudulent. As the trial court
noted, Plaintiffs knew they had suffered this injury by August 2012 at the latest.

       Plaintiffs contend that the injuries alleged in paragraph 75 are irrelevant to their
claim against Mr. Shanks. According to Plaintiffs, the injunction-related injuries cannot
be the basis of their claim against Mr. Shanks because those injuries were not caused by
the breach of a duty that Mr. Shanks owed to them. That is, because Mr. Shanks was not
Plaintiffs‟ attorney during the sale of the Rarity Bay notes, the injuries caused by Mr.
Shanks‟ actions or inactions during that time cannot be the basis of Plaintiffs‟ legal
malpractice claim.

       The only other alleged injury that is relevant to Plaintiffs‟ malpractice claim is the
injury alleged in paragraph 93. This injury is Plaintiffs‟ inability to enforce the agreed
judgments entered by the Circuit Court for Knox County. Plaintiffs contend that this
injury did not occur until Mr. Macri filed his affidavit. On appeal, Plaintiffs state their
argument on this point as follows:

               It is only when the Plaintiffs learned that the Agreed Judgments
       prepared and filed by [Mr. Shanks] became worthless that they suffered
       harm and the clock began ticking on their claims. . . . That occurred at the
       earliest on January 6, 2014 when [Mr. Shanks‟] other clients Macri and
       [TLL] filed an Affidavit as part of settling their dispute with the Federal
       Court Receiver which, arguably indicated that the entire transaction
       between Macri and [TLL] and Doukas and Athena in which Doukas and
       Athena received an assignment of the [Rarity Bay notes], and from which
       [Mr. Shanks] prepared the Complaints and Agreed Judgments on behalf of
       the Plaintiffs, was fraudulent.

       According to Plaintiffs, Mr. Macri‟s sworn statement that the sale of the Rarity
Bay notes was fraudulent caused the agreed judgments to become worthless. If Mr.
Macri‟s affidavit caused the agreed judgments to become worthless because it contained
statements that the Rarity Bay transaction was fraudulent, then the federal district court‟s
orders would have had an identical or similar effect. Both orders contained findings that
the sale of the Rarity Bay notes was likely fraudulent. Because, as Plaintiffs themselves
note, the agreed judgments were based on this sale, findings that the sale was likely
fraudulent would certainly call the agreed judgments into question, make it more difficult
to enforce them, and thus lower their value. Indeed, the May 2012 injunction order
specifically states that the district court considered “the agreed judgments filed on the
same day as the complaints on promissory notes and guarantees Athena asserted against
certain defendants in state court” when it determined that the sale of Rarity Bay notes

                                           - 10 -
was likely fraudulent. See Stooksbury v. Ross, 2012 WL 1933802, at *5 (emphasis
added).

        Mr. Macri‟s affidavit may have provided a stronger indication that Plaintiffs had
suffered an injury regarding the agreed judgments. It may also have increased the
magnitude of Plaintiffs‟ injury or given them notice of additional injurious effects of the
negligence they have alleged in the complaint. However, Plaintiffs cannot delay filing
suit until all the injurious effects of the alleged wrong are actually known to them. John
Kohl & Co., 977 S.W.2d at 533; Shadrick, 963 S.W.2d at 733. As the trial court correctly
noted, fraudulent activity in the sale of the Rarity Bay notes was the subject of both the
district court‟s orders and Mr. Macri‟s affidavit. Information about the fraudulent nature
of the Rarity Bay transaction was available to Plaintiffs in May and August of 2012. If
the disclosure of such information caused the agreed judgments to become worthless,
then Plaintiffs knew or should have known of this injury in August 2012 at the latest.
Therefore, whether Plaintiffs‟ claim is based on the injunction-related injuries or the
injuries associated with the agreed judgments, the claim accrued on August 2012 at the
latest.

      For the reasons stated above, we affirm the trial court‟s decision to dismiss the
malpractice claim against Mr. Shanks.

                                    IN CONCLUSION

       The judgment of the trial court is affirmed, and this matter is remanded with costs
of appeal assessed against Athena of S.C., LLC and Ted Doukas.

                                                   ________________________________
                                                   FRANK G. CLEMENT, JR., P.J., M.S.

                                          - 11 -