Court Opinion

ID: 3171743
Source: CourtListenerOpinion
Date Created: 2016-01-25 16:05:41.556533+00
Date Added: 2024-06-11T12:09:06.781300
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF NEVADA

                   JOHN PETER LEE, LTD., A NEVADA                         No. 66465
                   PROFESSIONAL CORPORATION
                   D/B/A F&C COLLECTIONS, INC. A
                   NEVADA CORPORATION; JOHN
                   PETER LEE, AN INDIVIDUAL; PAUL                           FILED
                   C. RAY, CHTD., A NEVADA
                   CORPORATION; AND PAUL RAY, AN                            JAN 22 2016
                   INDIVIDUAL;                                               ACIE K. I MANT
                                                                              F        E COU
                   Petitioners,
                   vs.                                                           Y   Lhfe

                   THE EIGHTH JUDICIAL DISTRICT
                   COURT OF THE STATE OF NEVADA,
                   IN AND FOR THE COUNTY OF
                   CLARK; AND THE HONORABLE
                   MARK R. DENTON, DISTRICT JUDGE,
                   Respondents,
                   and
                   70 LIMITED PARTNERSHIP; AND
                   TERTIA DVORCHAK, AS SPEICAL
                   ADMINISTRATIX OF THE ESTATE OF
                   THOMAS T. BEAM, DECEASED,
                   Real Parties in Interest.

                                    ORDER DENYING PETITION FOR
                                  WRIT OF MANDAMUS OR PROHIBITION

                               This is an original petition for a writ of mandamus or
                   prohibition challenging a district court's order denying a motion to dismiss
                   a legal malpractice action on statute of limitations grounds. Eighth
                   Judicial District Court, Clark County; Mark R. Denton, Judge.
                               Real parties in interest 70 Limited Partnership and Tertia
                   Dvorchak, as special Administratrix of the Estate of Thomas T. Beam,
                   deceased (collectively, 70 Ltd.), filed a legal malpractice claim against
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                 petitioners John Peter Lee, Ltd.; John Peter Lee; Paul C. Ray, Chtd.; and
                 Paul C. Ray (collectively, JPLL), alleging that JPLL breached the
                 standard of care during its representation of 70 Ltd. in an underlying
                 airspace takings case. JPLL moved to dismiss the complaint pursuant to
                 NRS 11.207(1) and the continuous representation rule. The district court
                 denied JPLL's motion.'
                             JPLL argues in its writ petition that (1) this court adopted the
                 continuous representation rule in Moon v. McDonald, Carano & Wilson
                 LLP, 129 Nev., Adv. Op. 56, 306 P.3d 406 (2013); (2) the district court
                 improperly found that the limitations period was tolled until the
                 underlying matter was completely resolved; and (3) the district court
                 abused its discretion by failing to grant its motion to dismiss because of
                 the expiration of the two-year period of limitations. We conclude that
                 these arguments lack merit and therefore deny the petition.
                 Writ relief is appropriate
                             "A writ of mandamus is available to compel the performance
                 of an act that the law requires as a duty resulting from an office, trust, or
                 station or to control an arbitrary or capricious exercise of discretion."
                 Humphries v. Eighth Judicial Dist. Court, 129 Nev., Adv. Op. 85, 312 P.3d
484, 486 (2013) (quoting Int'l Game Tech., Inc. v. Second Judicial Dist.
                 Court, 124 Nev. 193, 197, 179 P.3d 556, 558 (2008)); see also NRS 34.160.
                 Generally, "[w]rit relief is not available. . . when an adequate and speedy
                 legal remedy exists." Intl Game Tech., Inc., 124 Nev. at 197, 179 P.3d at
                 558. "While an appeal generally constitutes an adequate and speedy

                       "The facts and procedural history are known to the parties and will
                 not be recounted further except as is necessary for our disposition.

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                    remedy precluding writ relief, we have, nonetheless, exercised our
                    discretion to intervene 'under circumstances of urgency or strong
                    necessity, or when an important issue of law needs clarification and sound
                    judicial economy and administration favor the granting of the petition."
                    Cote H. v. Eighth Judicial Dist. Court, 124 Nev. 36, 39, 175 P.3d 906, 908
                    (2008) (footnote omitted) (quoting State v. Second Judicial Dist. Court, 118
Nev. 609, 614, 55 P.3d 420, 423 (2002)).
                                 We conclude that resolving this writ petition may affect the
                    course of the litigation, thus promoting sound judicial economy and
                    administration. Moreover, this petition raises important legal issues in
                    need of clarification, which could resolve or mitigate related litigation.
                    Accordingly, we exercise our discretion to entertain JPLL's petition for
                    mandamus. 2
                    The district court properly concluded that the statute of limitations period
                    was tolled until the underlying matter was completely resolved despite the
                    previous termination of the attorney-client relationship
                                 NRS 11.207(1) sets forth the statute of limitations for a
                    professional malpractice claim: "An action against an attorney . . . to
                    recover damages for malpractice . . . must be commenced . . . within 2

                          2 1n  the alternative, JPLL seeks a writ of prohibition. A writ of
                    prohibition is appropriate when a district court acts "without or in excess
                    of [its] jurisdiction." NRS 34.320; see also Club Vista Fin. Servs., LLC v.
                    Eighth Judicial Dist. Court, 128 Nev., Adv. Op. 21, 276 P.3d 246, 249
                    (2012). A writ of prohibition is improper in this case because the district
                    court had jurisdiction to hear and determine the outcome of the motion to
                    dismiss. See Goicoechea v. Fourth Judicial Dist. Court, 96 Nev. 287, 289,
                    607 P.2d 1140, 1141 (1980) (stating that we will not issue a writ of
                    prohibition "if the court sought to be restrained had jurisdiction to hear
                    and determine the matter under consideration").

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                years after the plaintiff discovers or . . . should have discovered the
                material facts which constitute the cause of action . . ." A professional
                malpractice claim may be subject to the litigation malpractice tolling rule,
                which provides that "damages do not begin to accrue until the underlying
                legal action has been resolved."   Hewitt v. Allen, 118 Nev. 216, 221, 43
P.3d 345, 348 (2002). The rule only applies "[i]n the context of litigation
                malpractice, that is, legal malpractice committed in the representation of
                a party to a lawsuit."     Id.   The district court applied the litigation
                malpractice tolling rule and determined that the statute of limitations had
                not expired on 70 Ltd.'s legal malpractice claim. "We review the district
                court's legal conclusions de novo." Buzz Stew, LLC v. City of N. Las Vegas,
                124 Nev. 224, 228, 181 P.3d 670, 672 (2008).
                            JPLL argues that the district court disregarded recent Nevada
                caselaw regarding the continuous representation rule. JPLL contends
                that had the continuous representation rule been applied, the statute of
                limitations would have run in March 2013 and the district court
                improperly tolled the limitations period.
                      The continuous representation rule
                            According to the continuous representation rule, a legal
                malpractice cause of action begins to accrue when "the attorney's
                representation concerning a particular transaction is terminated." 3
                Ronald E. Mallen & Jeffrey M. Smith, Legal Malpractice § 23:13, at 508
                (2014) (internal quotation marks omitted). The rule requires: "(1) ongoing
                representation by the lawyer; (2) on the same subject matter; (3) that is
                continuous." Id. at 509 (internal quotation marks omitted). JPLL asserts
                that this court adopted the continuous representation rule in Moon v.
                McDonald, Carano & Wilson LLP, 129 Nev., Adv. Op. 56, 306 P.3d 406
                (2013). We disagree.
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                             In Moon, a client brought a legal malpractice action against
                 his attorney stemming from the attorney's representation of the client as a
                 creditor in a bankruptcy proceeding. Id. at 407-08. We determined that
                 the litigation malpractice tolling rule did not apply because the
                 bankruptcy action was not an adversarial proceeding.      Id. at 410. Thus,
                 we concluded that the district court appropriately granted the attorney's
                 motion to dismiss. Id. The language JPLL relies upon comes at the end of
                 Moon: "Appellants' professional malpractice claim would therefore not be
                 tolled by the litigation malpractice tolling rule after February 2003 [the
                 date representation ended], even if this court were to conclude that the
                 bankruptcy proceeding in this case qualified as litigation."    Id. Because
                 our determination in Moon was based on the conclusion that non-
                 adversarial parts of a bankruptcy proceeding do not constitute litigation,
                 our observation regarding the continuous representation rule was mere
                 dicta.   See Dictum, Black's Law Dictionary        (6th ed. 1990) (defining
                 "[d]ictum" as "an observation or remark. . . not necessarily involved in the
                 case or essential to its determination").
                             Alternatively, JPLL argues that should this court determine
                 that the continuous representation rule was not adopted in Moon, we
                 should do so now. We decline to do so. The continuous representation rule
                 and the litigation malpractice tolling rule arrive at similar results. If the
                 attorney errs and the client continues to retain the attorney after the
                 error, the statute of limitations starts to run at the same time under either
                 rule because the case and the attorney-client relationship end
                 simultaneously. On the other hand, if the attorney errs and the client
                 obtains new counsel, under either rule, the former attorney must sit by
                 and hope that the client's new legal representative attempts to remedy the

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                 error. Further, under the continuous representation rule, if an attorney
                 has been removed from the case prior to its conclusion, estimating
                 damages from the alleged malpractice is difficult. In some jurisdictions
                 that recognize the continuous representation rule, courts can stay the
                 legal malpractice action until the underlying case concludes or the parties
                 can enter into a tolling agreement.    See, e.g., Beal Bank, SSB u. Arter &
                 Hadden, LLP, 167 P.3d 666, 673 (Cal. 2007) (emphasizing that "trial
                 courts have inherent authority to stay malpractice suits, holding them in
                 abeyance pending resolution of underlying litigation" (internal quotation
                 marks omitted)), VanSickle u. Kohout, 599 S.E.2d 856, 861 (W. Va. 2004)
                 (indicating that attorneys can "enter into tolling agreements. . . where the
                 amount of damages may yet be uncertain" and courts can stay malpractice
                 actions "in order to await the conclusion of some other proceeding that
                 might establish a client's damages"); see also Mallen & Smith, supra, §
                 23:11 at 438. Accordingly, under either rule the underlying litigation
                 concludes before the legal malpractice case begins.
                             Because the two rules operate in a like manner, we decline to
                 adopt the continuous representation rule in the litigation context or to
                 revisit our jurisprudence on the litigation malpractice tolling rule. Thus,
                 we conclude that the district court did not err in concluding that the
                 statute of limitations period was tolled until the underlying matter was
                 resolved based on the litigation malpractice tolling rule.
                 The district court did not abuse its discretion in denying JPLL's motion to
                 dismiss
                             As the district court found, the underlying litigation was
                 resolved when the settlement was approved on October 15, 2013. Because
                 NRS 11.207(1) provides that the statute of limitations for a legal
                 malpractice claim shall be commenced within two years, 70 Ltd. had until
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                October 15, 2015, to file its malpractice complaint against JPLL, which it
                did on November 7, 2013. Therefore, we conclude that 70 Ltd.'s
                malpractice complaint was timely filed, and the district court did not
                abuse its discretion in denying JPLL's motion to dismiss.
                            Accordingly, we
                            ORDER the petition DE

                                                   Parraguirre

                                                     /it u,Ce-1.3;               , J.
                                                   Hardesty

                                                                                    J.

                                                                                    J.

                PICKERING, J., concurring:
                            I concur in the order denying writ relief but would do so on the
                basis the petition does not qualify for extraordinary writ relief, without
                reaching the merits of the claimed legal error.   Compare State ex rel. Dep't

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                of Transp. v. Thompson, 99 Nev. 358, 361-62, 662 P.2d 1338 1340 (1983)
                (mandamus normally does not lie to review a claim of error in the district
                court's denial of a motion to dismiss or for summary judgment), with Int?
                Union, United Auto., Aerospace & Agr. Implement Workers of Am. (UAW)
                v. Nat'l Caucus of Labor Committees, 525 F.2d 323, 326 (2d Cir. 1975)
                (declining to reach the merits in denying a petition for extraordinary writ
                relief as improperly seeking interlocutory review of asserted legal error);
                see generally Double Diamond v. Second Judicial Dist. Ct., 131 Nev., Adv.
                Op. 57, 354 P.3d 641, 646 (2015) (Pickering, J., concurring)

                                                                                  J.

                cc: Hon. Mark R. Denton, District Judge
                     Santoro Whitmire
                     John Peter Lee Ltd.
                     Lipson Neilson Cole Seltzer & Garin, P.C.
                     Olson, Cannon, Gormley, Angulo & Stoberski
                     Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC
                     Eighth District Court Clerk

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