Recent Nevada Supreme Court Advance Opinion examines the statute of limitations discovery rule applicable to legal malpractice actions.
Allowing varying accrual dates for litigation and transactional malpractice claims undermines the discovery rule.
Sierra International, Inc. (“Sierra”) entered into a $1.4 million promissory note with Appellant Moon (“Moon”). Sierra eventually defaulted on the promissory note and filed a Chapter 7 voluntary petition in Bankruptcy Court in 2001. Moon hired McDonald Carano Wilson, LLP (“MCW”) to represent their interests in Sierra’s bankruptcy action. Sierra’s bankruptcy action concluded in 2008.
In the interim, on November 3, 2006, Moon filed an action against MCW alleging (1) professional negligence, (2) breach of contract, and (3) vicarious liability arising out of its representation of Moon in Sierra’s bankruptcy action. (“First Complaint”) In 2008, the District Court dismissed Moon’s lawsuit without prejudice because Moon failed to comply with discovery requirements. Moon appealed the dismissal, and the Nevada Supreme Court affirmed.
Nearly four years later, on October 20, 2010, Moon filed a second action against MCW reasserting the same claims contained in the First Complaint. (“Second Complaint”) In March 2011, MCW filed a motion to dismiss the Second Complaint arguing the case was time–barred under Nevada’s discovery rule: NRS 11.207(1). (“Statutory Discovery Rule”)
NRS 11.207(1) provides an action for legal malpractice must be commenced within four years after the plaintiff sustains damage, or within two years after the plaintiff discovers, or through reasonable diligence should have discovered, the material facts constituting the cause of action; whichever occurs earlier.
MCW argued that the Statutory Discovery Rule governs Moon’s professional malpractice claim, and based on… click here for the full article as published in the August 2013 issue of the LPL eAdvisory, an eNewsletter from the American Bar Association’s Standing Committee on Lawyers’ Professional Liability.