Court Opinion

ID: 5133914
Source: CourtListenerOpinion
Date Created: 2021-12-10 15:06:23.328651+00
Date Added: 2024-06-11T08:23:40.931838
License: Public Domain

RENDERED: DECEMBER 3, 2021; 10:00 A.M.
                       NOT TO BE PUBLISHED

                Commonwealth of Kentucky
                          Court of Appeals

                             NO. 2020-CA-1480-MR

SHAN WOLFE                                                           APPELLANT

               APPEAL FROM MCCRACKEN CIRCUIT COURT
v.             HONORABLE JOHN ATKINS, SPECIAL JUDGE
                        ACTION NO. 18-CI-00106

JOE KIMMEL AND THE KIMMEL
LAW FIRM                                                              APPELLEES

                                    OPINION
                                   AFFIRMING

                                  ** ** ** ** **

BEFORE: CETRULO, LAMBERT, AND TAYLOR, JUDGES.

CETRULO, JUDGE: This is an appeal from a McCracken Circuit Court order

granting summary judgment. The circuit court found the plaintiff failed to file her

complaint in a timely manner, and the case was therefore barred as a matter of law.

We agree and therefore AFFIRM.
                       I.    FACTS AND BACKGROUND

            This case arises from allegedly poor legal advice that led to a lawsuit

against the appellant, Shan Wolfe (“Wolfe”). Wolfe was a former co-owner of

GenCare, Inc. with Robin Lampley (“Lampley”). Wolfe and Lampley formed

GenCare, Inc. to provide in-home care for elderly and disabled people in Western

Kentucky, but disputes between the co-owners ultimately led to a dissolution of the

business.

            In 2016, Wolfe received advice from attorney Joe Kimmel (“Attorney

Kimmel”) as to how she could leave the business and begin her own similar

business. Kimmel allegedly told Wolfe that she could exit the company, set up a

competing entity, take in GenCare clients, and even hire GenCare employees, even

though she was still with GenCare. Based on this advice, Wolfe began organizing

her own company, Legacy In Home Care, Inc. (“Legacy”).

            Wolfe began telling clients and employees about her plans. Several

employees indicated their intent to join her at Legacy even though they had signed

non-competition agreements with GenCare. Attorney Kimmel drafted letters to

two GenCare clients letting them know Wolfe was forming Legacy, and they could

follow her there. In late July, Legacy began doing business, and only then did

Wolfe resign as an officer of GenCare. The former co-owner, Lampley, notified

Wolfe, through Attorney Kimmel, that Wolfe had violated her common law and

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statutory duties as an officer and fiduciary. On August 19, 2016, Lampley and

GenCare sued Wolfe, Legacy, and several GenCare employees. Attorney Kimmel

referred Wolfe to Attorney Todd Farmer (“Attorney Farmer”) for representation

related to the GenCare litigation. Ultimately, Wolfe settled with Lampley on July

17, 2017.

            In the record before this Court, we have a great deal of testimony from

Wolfe as to what Attorney Farmer allegedly told her when he began representing

her in August 2016. There is no record of testimony from Attorney Farmer

contradicting the testimony of Wolfe. However, Attorney Farmer filed a timely

answer and asserted defenses; Attorney Farmer also filed a cross-claim against

Lampley.

            On February 14, 2018, Wolfe filed a complaint against Attorney

Kimmel for legal malpractice. The complaint alleges that Attorney Farmer

(attorney two) told Wolfe that Attorney Kimmel (attorney one) gave her poor legal

advice and that she had been damaged as a result of that advice. Attorney Kimmel

filed a motion for summary judgment on the single ground that the statute of

limitations had expired. The trial court granted the summary judgment but issued

no written opinion.

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                                   II.    ANALYSIS

             Our standard of review on appeal of a summary judgment is whether

the trial court correctly found that there were no genuine issues as to any material

fact and that the moving party was entitled to judgment as a matter of law. Lewis

v. B & R Corp., 56 S.W.3d 432, 436 (Ky. App. 2001) (citing Scifres v. Kraft, 916

S.W.2d 779, 781(Ky. App. 1996)). Summary judgment shall be granted if the

pleadings, depositions, and record before the court do not create any issues as to

any material fact. Kentucky Rule of Civil Procedure (“CR”) 56.03. In this appeal,

there is no significant dispute as to the material facts. Indeed, the complaint itself

sets out the foregoing dates and facts.

             Wolfe asserts that the statute of limitations for a malpractice suit does

not being to run “until the legal harm [becomes] fixed and non-speculative.” Brief

for Appellant at *3 (quoting Doe v. Golden & Walters, PLLC, 173 S.W.3d 260,

271 (Ky. 2005)). As stated by Wolfe, when an attorney gives legal advice that

leads to a lawsuit, the malpractice claim does not accrue until that lawsuit is

resolved. Brief for Appellant at *3 (citing Alagia Day, Trautwein, and Smith v.

Broadbent, 882 S.W.2d 121 (Ky. 1994)). We do not believe that is the law of the

Commonwealth.

             All agree that the applicable statute is Kentucky Revised Statute

(“KRS”) 413.245, which requires an action for professional negligence “be

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brought within one year from the date of the occurrence or from the date when the

cause of action was, or reasonably should have been, discovered by the party

injured.”

             The Kentucky Supreme Court explained that KRS 413.245 contains

two distinct statutes of limitation, the “occurrence limitation” period and the

“discovery limitation” period. Michels v. Sklavos, 869 S.W.2d 728 (Ky. 1994).

The occurrence limitation period begins to accrue one year from the date of

occurrence; the discovery period begins one year from the date when the cause of

action was, or reasonably should have been, discovered by the party injured. Id. at

730.

             Based solely on Wolfe’s complaint filed February 14, 2018, we can

establish when both limitations began to commence. Herein, the occurrence

limitation period began when the poor legal advice was given, on or around April

2016. The discovery limitation period began when Wolfe was first informed by

Attorney Farmer that Attorney Kimmel had given poor advice. The complaint

states that in August 2016 Attorney Kimmel referred Wolfe to Attorney Farmer;

when Wolfe met with Attorney Farmer, he “almost immediately and repeatedly

reprimanded Ms. Wolfe, stating that she could not just go and start another

company” and “she had no right to take clients, employees, or client files from

GenCare, Inc.” (Complaint at *3-4.) As a result, the discovery limitation period

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began on or around August 2016. Using either statutory limitation, the complaint

is not timely. This is reiterated by well-established case law.

             Wolfe primarily relies upon Broadbent, 882 S.W.2d 121. In that case,

the attorney gave advice to his clients as to how to structure a land conveyance to

their children. Several years later, the Internal Revenue Service (“IRS”) informed

the clients that their attorney’s advice was incorrect and that they would owe

significant damages. The Kentucky Supreme Court held that the statute did not

begin to run in that case until the IRS claim was settled. The damages in that

instance were not “fixed and non-speculative” because it could not be determined

that there was in fact an injury as a result of the claimed negligence. Id. at 125-26.

However, the suit in that case was filed within one year of the attorney’s firm

being discharged and within one year of the IRS claim being settled.

             More recent cases have explained that the Broadbent case is quite

distinguishable from the current matter. In Pedigo v. Breen, 169 S.W.3d 831, 833

(Ky. 2004), the Kentucky Supreme Court confirmed that the occurrence limitation

period begins to run when the negligence and damage have both occurred.

However, the Court further explained that damage has occurred once it is certain

that damages will indeed flow as a result of the negligence. Id.; see also Board of

Education of Estill County, Kentucky v. Zurich Insurance Co., 180 F. Supp. 2d

890, 893 (E.D. Ky. 2002). The plaintiff’s own complaint in this malpractice action

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alleges that she knew by August 2016 that damages would follow as a result of the

negligence.

              Other cases have also held that the statute begins running once

potential damages are apparent. Matherly Land Surveying, Inc. v. Gardiner Park

Development, LLC, 230 S.W.3d 586, 591 (Ky. 2007). Most recently, this Court

held that the statute commences when it is reasonably ascertainable that damages

have occurred.

              In Saalwaechter v. Carroll, 525 S.W.3d 100, 106-07 (Ky. App. 2017),

this Court specifically held that the triggering of the statute of limitations did not

have to wait for the conclusion of subsequent litigation, holding, “even if [the

plaintiff] may not have known of the full extent of his damages in terms of the

precise dollar amount, the fact of his injury was certainly ‘irrevocable’ and ‘non-

speculative.’” It is not required that the specific dollar amount be known to trigger

the limitation, only that the potential damages are apparent or that it is reasonably

ascertainable that damages have occurred.

              Wolfe argues that this Court’s prior decision in Doe v. Golden &

Walters, PLLC, 173 S.W.3d 260, 272 (Ky. App. 2005), holds that without legally

cognizable damages, there is no ripe claim for legal malpractice. However, this

Court addressed that argument in Saalwaechter, and distinguished the holding in

Doe. The federal district court in Board of Education of Estill County, Kentucky v.

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Zurich Insurance Company, interpreting Kentucky state law, found the “plaintiff

overstates the degree to which – under Kentucky law – damages must be defined in

professional negligence claims. Whatever it means, ‘fixed and non-speculative’

does not mean that damages, to trigger the initiation of the limitations period, must

be translatable into a specified dollar amount. Kentucky law has never required as

much and plaintiff points to no authority . . . for anything approximating this

proposition.” 180 F. Supp. 2d at 893.

             In discussing the term “reasonably ascertainable,” the court further

noted that the phrase is more properly interpreted as tolling the limitations period

for professional negligence claims until plaintiff is certain that damages will indeed

flow from defendant’s negligent act. Id. at 894. Applying that to the facts herein,

Appellant was reasonably certain that damages would flow from the advice she

had received at least by the time the suit had been filed against her in August 2016.

She had been referred to another attorney who informed her of the likely damages.

To accept Wolfe’s contention that the suit could not be filed until the settlement

was completed would extend “the limitations period for professional negligence

actions . . . until damages could be specified as an ascertainable sum certain. This,

of course, is not the law.” Saalwaechter, 525 S.W.3d at 106 (citing Board of

Education of Estill County, 180 F. Supp. 2d at 893).

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             Herein, the record before the Court and the record presented by both

parties consists of only evidence from the former client, Wolfe. There was no

contrary evidence in the record to dispute what she was told by Attorney Farmer

regarding the representation of Attorney Kimmel. Indeed, the lawsuit against her

was filed in August 2016; Wolfe’s own verified complaint in this suit alleges that it

was clear by August 2016 that damages would follow. Thus, the malpractice claim

should have been filed no later than August 2017. As Saalwaechter makes clear,

the law does not require the degree of certainty to file a claim for professional

malpractice, under KRS 413.245, that Wolfe now asserts.

                                III.   CONCLUSION

             Based upon the clear authorities outlined above, this Court concludes

that the trial court was correct in finding the claim was barred by the one-year

statute of limitations set forth in KRS 413.245, and the judgment is therefore

AFFIRMED.

             LAMBERT, JUDGE, CONCURS.

             TAYLOR, JUDGE, DISSENTS AND DOES NOT FILE SEPARATE
OPINION.

 BRIEFS FOR APPELLANT:                     BRIEF FOR APPELLEE:

 John S. Friend                            William A. Hoback
 Louisville, Kentucky                      Mark S. Fenzel
                                           Louisville, Kentucky

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