Summary
holding that an attorney's negligent failure to properly schedule a client's debt in a petition for bankruptcy became a viable malpractice claim at the time of discharge because the petition was amendable up until that point
Summary of this case from Church Joint Venture, L.P. v. Blasingame (In re Blasingame)Opinion
Docket No. 61399.
Decided May 1, 1979.
On application by plaintiff for leave to appeal the Supreme Court, in lieu of granting leave to appeal, affirmed the judgment of the Court of Appeals.
Keller Katowsky, P.C., for plaintiff.
Woodworth Woodworth for defendant James F. Woodworth.
We are asked to decide when the statute of limitations begins to run in a malpractice case involving an attorney's inaction in failing to schedule a debt owed by this plaintiff in a petition for personal bankruptcy. The circuit court granted an accelerated judgment for the defendant after it found the statute of limitations had run. The Court of Appeals reversed and we affirm, finding the statute of limitations starts to run at the time the plaintiff is discharged in bankruptcy.
MCL 600.5805(3); MSA 27A.5805(3).
81 Mich. App. 705; 265 N.W.2d 797 (1978).
The plaintiff retained the defendant to file a personal bankruptcy in 1970. The original petition was filed in the bankruptcy court on March 17, 1971, and amended on April 19, 1971. Neither petition scheduled a debt owed by the plaintiff to the Michigan Motor Vehicle Accident Claims Fund. The plaintiff attempted several times to have the defendant schedule this debt, including the filing of a request for investigation with the State Bar Grievance Board on November 22, 1971. The plaintiff received his discharge in bankruptcy on September 25, 1972, but it did not include the debt to the Michigan Motor Vehicle Accident Claims Fund. This suit was filed December 26, 1973.
Both parties agree that the applicable statute of limitations is two years and that the accrual of the claim is governed by MCL 600.5838; MSA 27A.5838 before its amendment by 1975 PA 142. In dealing with the statute, in Dyke v Richard, 390 Mich. 739, 747; 213 N.W.2d 185 (1973), we held:
MCL 600.5805(3); MSA 27A.5805(3).
"[A]n action based on malpractice by a state licensed person must be brought within two years of the time when such person discontinues treating or otherwise serving the plaintiff, or within two years of the time when the plaintiff discovers, or in the exercise of reasonable diligence should have discovered, the asserted malpractice, whichever is later."
Applying this standard, the circuit court held the last date of service to be April 19, 1971 (when the bankruptcy petition was amended) and the date of the plaintiff's knowledge of the asserted malpractice to be November 22, 1971 (the date of filing the request for investigation with the State Bar Grievance Board). Consequently, it concluded the two years had expired.
The Court of Appeals concluded that when the negligence of an attorney consists of delay or inaction, a client's cause of action accrues at the time when it can be said that the attorney has had a reasonable time to act but has failed to do so. The alleged malpractice accrued when the defendant failed to schedule the debt within a reasonable time after having been requested to do so by his client. The Court of Appeals held that whether the plaintiff could have discovered the asserted malpractice within the two-year limitation period is a question of fact to be decided by the trier of fact. Therefore the circuit court erred in ruling that the plaintiff's claim was barred by the statute of limitations on the basis of the present record.
Anno: When Statute of Limitations Begins to Run Upon Action Against Attorney for Malpractice, 18 ALR3d 978, 1002-1005.
We concur in the result reached by the Court of Appeals. We hold that the statute of limitations starts to run at the time the plaintiff was discharged in bankruptcy. Until then, the defendant could have petitioned the bankruptcy court to amend the petition, and the plaintiff would not have had a claim for malpractice.
Affirmed and remanded for proceedings consistent with this opinion.
COLEMAN, C.J., and KAVANAGH, WILLIAMS, LEVIN, FITZGERALD, RYAN, and BLAIR MOODY, JR., JJ., concurred.