Court Opinion

ID: 9581103
Source: CourtListenerOpinion
Date Created: 2023-08-21 22:11:41.80788+00
Date Added: 2024-06-11T13:36:42.226139
License: Public Domain

SABERS, Justice
(dissenting).
I dissent.
The complaint alleges that Bradsky represented Kurylas on June 11, 1983, and *118“continued up to November 13, 1984 and beyond. An attorney-client relationship existed.” The complaint further alleges that Bradsky “negligently failed to possess and exercise that degree of knowledge and skill ordinarily possessed and exercised by lawyers engaged in the legal profession....” As a proximate result of this negligence, Kurylas sustained damages.
On or about November 7, 1984, Kurylas became disillusioned that the litigation bogged down in bankruptcy proceedings, and went to see Attorney Joe Butler. At that point in time, Attorney Butler “hadn’t agreed to get in the case,” but “raised the question [whether] a financing statement [had] been filed.” When Wilma Kurylas left Butler’s office that day, she went to Bradsky’s office. Bradsky is her brother. She testified:
Q. What did you say to him and what did he say to you, if anything?
A. I said, “Are you sure it hasn’t been filed?” And so Walter was at that point looking through his file, and he said, “No, it has not been.”
Q. Anything else said?
A. I said, “Do you want to do that, or do you want me to take it up to the Courthouse or what?” He said he would handle it, and he did.
(emphasis added).
When Bradsky found the unfiled financing statement in his file, he knew or should have known that Kurylas, Inc., had an un-perfected security interest in the motel property collateral. He either knew or should have known that any creditor of Ceasar’s, Inc., could perfect a security interest in the motel collateral of Kurylas, and thereby take priority over the unper-fected security interest of Kurylas. He testified that he knew that the motel “had changed hands so many times, and I felt each time there should have been a separate financing statement and security agreement.”
If the foregoing testimony is disputed, then there is a fact issue for the jury, and summary judgment is improper. If the foregoing testimony is undisputed, then the undisputed evidence is that Bradsky “said he would handle it,” and had the responsibility of proceeding to perfect the security interest in favor of Kurylas.1 At the least, whether his offer to “handle it” constitutes continuing legal representation is a jury question.
Since the Defendant’s malpractice “occurred” 2 on November 7, 1984, and the *119within action was commenced on October 30, 1987, it was within the three-year statute of limitations contemplated by SDCL 15-2-14.2. It was not until December 13, 1984 — the date Rushmore State Bank filed its financing statement against Ceasar’s, who acquired its interest from Kiser’s Rapid City Motel Co. — that the “proposed” action of Bradsky would become ineffective as “too late.”
Whether Bradsky continued to represent Kurylas up until November 10, 1987, when he gave Kurylas a “notice of withdrawal,” terminating the attorney-client relationship is another jury question. An attorney-client relationship can clearly continue to exist even though other attorneys may have been retained to handle “bankruptcy proceedings,” “trial matters” or other special aspects of a transaction. Therefore, genuine issues of material fact exist concerning the attorney-client relationship, continuing representation, and negligence. Schoenrock v. Tappe, 419 N.W.2d 197 (S.D.1988); Wells v. Billars, 391 N.W.2d 668 (S.D.1986). Since genuine issues of material fact exist concerning these matters, summary judgment was clearly improper. Groseth Int’l, Inc. v. Tenneco, Inc., 410 N.W.2d 159 (S.D.1987); Bego v. Gordon, 407 N.W.2d 801 (S.D.1987); Wilson v. Great N. Ry. Co., 83 S.D. 207, 157 N.W.2d 19 (1968).

. Kurylas suggests that this could have been accomplished by Bradsky by either obtaining new financing statements executed by Ceasar’s, or by filing a copy of the settlement agreement of February 9, 1984, and the exchange agreement of June 11, 1983, in lieu of a financing statement. SDCL 57A-9-402(l) provides that a "copy of the security agreement is sufficient as a financing statement if it contains the above information and is signed by the debtor."

. I am concerned about this court’s overly restrictive interpretation of “occurrence.” We would be well served to abandon the outdated interpretation used by the majority. As explained in 2 Mallen and Smith, Legal Malpractice § 18.10 at 100 (3d ed. 1989):
[P]roblems with the occurrence rule account for its abandonment or amelioration in almost all jurisdictions. The perseverance of the rule is more attributable to its deep historical roots rather than its logic.
Mallen and Smith proceed to explain one way for courts to address these problems of the occurrence rule:
The obvious injustices and frequently illogical results from application of the occurrence rule have prompted many courts to add the requirement that there be actual injury before a cause of action accrues.
Id., § 18.11 at 100.
Idaho has a statute similar to ours and has adopted this approach. Their statute provides that for professional malpractice "the cause of action shall be deemed to have accrued as of the time of the occurrence, act or omission complained of_” Idaho Code § 5-219(4) (1979). The Supreme Court of Idaho has ruled that "until some damage occurs no cause of action accrues for professional malpractice, even though the 'occurrence, act or omission complained of,' which ultimately causes the damages, has occurred earlier.” Treasure Valley Bank v. Killen & Pittenger, P.A., 112 Idaho 357, 359, 732 P.2d 326, 328 (1987). Such a conclusion is consistent with the generally recognized proposition that a statute of limitations does not "begin to run against a negligence action until some damage has occurred.” Prosser and Kee-ton The Law of Torts, § 30 at 165 (5th ed. 1984).
We should interpret “occurrence” to require actual injury before the limitation period begins to run. Otherwise, our interpretation of "occurrence” will unconstitutionally collide with our *119decision in Staab v. Cameron, 351 N.W.2d 463 (S.D.1984), and other similar cases. The unconstitutional collision will arise where the injury from the malpractice does not exist until more than three years after the act of negligence. In accord with Staab, during the first three years the injured party would be unable to obtain a remedy for the injury because "an attorney is liable in a malpractice action only for losses actually sustained as a proximate result of the conduct of the attorney." Id. at 466. By the time the injury arises, our interpretation of "occurrence" would bar an action to recover for the injury. The end result would be the complete denial of a remedy for an injury in violation of Article VI, § 20 of the South Dakota Constitution. See Zacher v. Budd Co., 396 N.W.2d 122 (S.D.1986). While the facts of this case do not present such a situation, we should take advantage of the opportunity to correct the problem and avoid the collision of our decisions.