Court Opinion

ID: 9664449
Source: CourtListenerOpinion
Date Created: 2023-08-24 00:19:04.522226+00
Date Added: 2024-06-11T18:15:01.827182
License: Public Domain

STEINMETZ, J.
(dissenting). I disagree with the majority's analysis and conclusion and therefore dissent. Specifically, my dissent is based on the majority's determination that the plaintiff sustained actual damage in 1981 as a result of legal malpractice by the defendant. Because I consider that the plaintiff did not sustain actual damage until 1985, from which it follows that the plaintiff could not have discovered any actual damage until that time, I would reverse the decision of the circuit court holding that the plaintiffs action is time barred.1
*175Actual damages are an essential element to an action for legal malpractice. Widemshek v. Fale, 17 Wis. 2d 337, 340, 117 N.W.2d 275 (1962). Until a party sustains actual damage, the statute of limitations on an action does not accrue. Denzer v. Rouse, 48 Wis. 2d 528, 532-33, 180 N.W.2d 521 (1970). In this connection, it must be emphasized that the mere possibility of future damage does not constitute actual damage. Meracle v. Children's Serv. Soc., 149 Wis. 2d 19, 27, 437 N.W.2d 532 (1989).
*176I submit that the plaintiff in this case did not sustain actual damage until 1985 when he incurred the cost of his legal defense in the action brought against him by the land seller. The only "damage" he suffered in 1981 and until 1985 was the mere possibility of future damage, the mere possibility that the seller of the land might bring an action against him requiring him to sustain, at the very least, damages related to his legal defense. The statute of limitations could not begin to run until he actually incurred that damage and, a fortiori, discovery of his injury could not commence until at least that point in 1985. Thus, his claim is not time barred. The truth of my position is made clear by the fact that, had the plaintiff attempted to bring an action for legal malpractice against his attorney in 1981, the action would have been denied by the trial court for failure to state a claim for which relief might be granted; there simply was no legally cognizable relief available to the plaintiff at that time because no actual damage had yet resulted to him.
The majority argues that the plaintiff suffered damage by virtue of "not being able to rescind the transaction and avoid liability on the note when he could not receive the property he purchased with the note." Majority op. at 156-157. The majority fails to acknowledge that the plaintiffs "liability on the note" was potentially only a paper tiger. The "liability" was based upon the mere possibility that the land seller would bring an action against the plaintiff. Until 1985, when the land seller brought such an action, only that mere possibility existed, and that mere possibility itself would eventually have been extinguished by the statute of limitations governing the injury claimed by the land seller.2
*177Moreover, as a practical matter, the majority is simply mistaken when it asserts that the plaintiff "could not receive the property." In fact, the plaintiff did receive the very same property, having purchased it from the finance company in 1982 after the finance company foreclosed on it against the original land seller. Not only did he purchase the property, he did so on terms much more favorable than he would have gained had he purchased the property from the original land seller, purchasing it at the rate of interest of only five percent. Given that the judgment obtained against the plaintiff by the original land seller was reduced by the amount the plaintiff paid the finance company for the land, it is conceivable that the plaintiff might not have suffered any damage at all, although the defendants on appeal have not challenged the plaintiffs claim of actual damage. In other words, the purchase of the property by the plaintiff means, as a practical matter, that the only possible damage that the plaintiff suffered arose in 1985 pursuant to his legal defense.
The majority relies heavily, and erroneously, upon Denzer, 48 Wis. 2d 528, and Boehm v. Wheeler, 65 Wis. 2d 668, 223 N.W.2d 536 (1974). Both of these cases are quite distinguishable from the instant case, primarily because of the distinct nature of the malpractice that occurred in them.
*178In Denzer, an action was brought against an attorney for negligently drafting a warranty deed. The deed was prepared and the real estate transaction was consummated in 1947. It is important to note that the malpractice did not, as in the case at bar, involve failure to include a financing contingency clause in the land purchase agreement; rather, it related to the particular description of the property given in the warranty deed drafted by the attorney. The plaintiffs commenced their action against the estate of the attorney sometime subsequent to a 1967 decision of this court. This court held that the injury occurred in 1947, on the date of consummation of the real estate transaction, "because it was on that date that they paid for and received the property described in the deed prepared by the attorney." Boehm, 65 Wis. 2d at 677, citing Denzer.
Thus, in Denzer, the plaintiff's injury did not depend upon the mere possibility that a legal action would be brought against him. The concomitant effect of the attorney's action was to cause actual damage to the plaintiffs immediately upon the transaction being consummated insofar as they did not . receive that for which they had bargained and paid. The plaintiffs legal right to receive the property for which he had paid had been violated. Damage was an accomplished fact by virtue of the consummation of the real estate transaction. The plaintiff thus had a claim for relief when the real estate transaction occurred.
Unlike the situation in Denzer, of course, no real estate transaction was ever "consummated" in the case at bar, where the plaintiff never "paid for and received" the real estate as did the plaintiff in Denzer. Never having paid for the property, he never "lost" anything of value to himself. His "damage" in the instant case remained speculative, a "mere possibility." It depended *179upon the entirely uncertain prospect of an act being taken by the land seller before the statute of limitations applicable to the land seller would be extinguished. Furthermore, in Denzer the plaintiff was damaged immediately upon the consummation of the transaction, whereas in the instant case the plaintiff received the property in question on better terms than he might have expected had the transaction with the original land seller been consummated. There simply is no comparable violation of a "right" of the sort that occurred in Denzer. One does not have any sort of legally cognizable "right" to a contingency clause in a land purchase agreement in the way one has a right to particular property for which he has bargained and paid.
As for the majority's reliance upon Boehm, the "right" at stake with regard to the first claim in Boehm, the claim for failure to file a patent application in a timely fashion, was clearly a legal right, specifically, a patent right. Boehm, 65 Wis. 2d at 678. "Patents do have the attributes of personal property and are assignable. 35 U.S. Code, sec. 261. The right to exclude others is a valuable right and the loss of it would be an injury which would commence the running of the statute of limitations." Id. This makes Boehm like Denzer, where the plaintiff lost the right to the particular property for which he had paid. There was no analogous "right" lost by the plaintiff in the instant case. There simply is not an intrinsic legal right or interest that one has in not being subject, for a limited period of time, to a possible lawsuit.
As to the majority's reliance upon the second claim in Boehm — for incorrect advice as to a third party's inspection of plaintiffs' invention — there appears to *180have been no ascertainable "right" whatsoever.3 In this regard, this court said: "Because the plaintiffs did not have a patent on the power unit and because the unit had been sold and was in public use it is questionable if they had any rights or interests in their invention." Boehm, 65 Wis. 2d at 678. The court went on to indicate that, insofar as the plaintiffs had no "right" in their invention, they suffered no injury related to their second claim. The court stated:
We conclude that the injury to the plaintiffs' interests would have occurred when they sent models of the power unit to their competitors, if not before. It was then that they were injured by the defendants' allegedly erroneous advice, if at all.
Id. at 679 (emphasis added). Thus, we strongly suggested that there was no injury at all with regard to the second claim. Insofar as no injury ever occurred with regard to this second claim, no corresponding cause of action ever accrued. Thus, quite correctly, we effectively ruled that the plaintiff had no cause of action with regard to the second claim. I submit that, consistent with the situation as to the dubious second claim in Boehm, there was no "right" — and therefore no injury — at all in the case at bar until 1985.
Although the issue presented in this case is a bit unique, there are cases which, analogously, support my position.4 For example, in In re Easterbrook, 200 Cal. App. 3d 1541, 244 Cal. Rptr. 652 (1988), the California Court of Appeals ruled that a complaint filed by á crimi*181nal defendant against his attorney for malpractice failed to state a cause of action because it was filed before a verdict in the criminal action had been rendered. " 'The mere breach of a professional duty, causing only nominal damages, speculative harm, or the threat of future harm — not yet realized — does not suffice to create a cause of action for negligence.' " Id. at 1544, quoting Budd v. Nixen, 6 Cal. 3d 195, 98 Cal. Rptr. 849, 491 P.2d 433, 436 (1971). "[D]amages may not be based upon sheer speculation or surmise, and the mere possibility or even probability that damage will result from wrongful conduct does not render it actionable." Id. See also, Zero Manufacturing Co. v. Husch, 743 S.W.2d 439 (Mo. App. 1987) (if the occurrence of damage depends upon a contingent or uncertain event, then the fact of damage is speculative and a cause of action has not accrued); Dowker v. Peacock, 152 Mich. App. 669, 394 N.W.2d 65 (1986) (loans made with defective security create only the potential for a loss which will not cause damage unless the security is attacked by a third party or upon bankruptcy of the debtor).
In the final analysis, it is clear that the majority has not put forth any reason to justify its decision aside from expressing a dislike for the possibility that legal malpractice actions might take place more than six years after the negligence itself occurs. Because the plaintiff did not suffer any actual damages until 1985, the statute of limitations did not begin to run until that time. It follows that his cause of áction is not time barred. Accordingly, I dissent to the majority opinion holding to the contrary. I would reverse the judgment of the trial court and hold as a matter of law that the plaintiffs action is not barred by the statute of limitations.

 Denzer v. Rouse, 48 Wis. 2d 528, 532-33, 180 N.W.2d 521 (1970), indicates that the statute of limitations on a legal malpractice action begins to run from the time of actual damage. *175This rule can be known as the "damage rule," and is referred to as such by the other dissent. In Hansen v. A.H. Robins, Inc., 113 Wis. 2d 550, 560, 335 N.W.2d 578 (1983), we adopted the "discovery rule," which says that the statute of limitations begins to run at the time the plaintiff discovers, or through the use of reasonable diligence should discover, that he has been damaged. Although Hansen was not a legal malpractice action, we "adopt[ed] the discovery rule for all tort actions other than those already governed by a legislatively created discovery rule." Id. Accordingly, the rule is applicable to legal malpractice cases.
Clearly, the "discovery rule" is merely a hybrid version of the "damage rule" and completely consistent with it in theory and application. Under either rule, damages must exist before the statute of limitations begins to run. This was recognized by the California Supreme Court in Budd v. Nixen, 6 Cal. 3d 195, 98 Cal. Rptr. 849, 491 P.2d 433 (1971), which held that, although the statute of limitations in legal malpractice actions begins to run from the time of discovery, a cause of action for legal malpractice does not accrue until the plaintiff suffers damage. Thus, the arguments of the majority and other dissent are mistaken insofar as they would suggest that the application of the "discovery rule" means that damage does not need to exist before the statute of limitations begins to run. Absent a statutory provision to the contrary, the point at which any damage arose is always the fundamental question. There must be damage before the discovery rule can come into effect.

In addition, for all that both the plaintiff and land seller knew, the plaintiff might have been successful in defending against any action brought against him by the land seller. Specifi*177cally, there were material issues of fact as to whether, for instance, the clause in the "separate agreement" calling for the transaction to be voided under certain circumstances applied to the land purchase agreement itself such that in reality the plaintiff would not have been in any way liable. This being so, the mere possibility that the land seller might bring an action was undercut by any reluctance he might have had to bring an action in light of his awareness that he might not succeed on the merits.

The majority inappropriately assumes there to have been "common law trade secret rights" that the plaintiffs "undisput-edly" lost. See majority op. at 154.

The majority cites cases listed by the plaintiff at majority op. at 158 n.ll.