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Davis v. Tremaine12/11/2000
PUBLISHED
Does the six-year statute of limitations for written contracts apply to this legal malpractice action because of language in the letter of engagement between Dr. Andrew Davis and Davis Wright Tremaine LLP ('DWT')? If the six-year statute does not apply, are there genuine issues of material fact as to the time of accrual of Dr. Davis' cause of action under the three-year statute of limitations for negligence?
We hold that the legal malpractice claim here is not an action 'upon a contract in writing' within the six-year statute. Moreover, it is not an action 'upon a liability express or implied arising out of a written agreement' within that same statute. Accordingly, we affirm the trial court's conclusion that the six-year statute does not apply.
There are genuine issues of material fact as to the time of accrual of the legal malpractice claim based on the alleged professional negligence of DWT in failing to determine, prior to closing, whether there were title defects to the realty in which Dr. Davis acquired an interest. Accordingly, we reverse that portion of the trial court's decision, and remand for further proceedings.
In January 1992, Dr. Davis retained A. Peter Parsons of DWT to represent him in the purchase of Dr. Herschell Boyd's ophthalmology practice. Parsons memorialized the terms and conditions of the representation in a letter of engagement that he sent to Dr. Davis. The letter stated, in part, that 'we will do our best to provide you with prompt, high quality legal counsel.' Enclosed with the letter was a document titled 'Standard Terms of Engagement for Legal Services' 'Standard Terms,' which DWT commonly uses. It stated that '{w}e will at all times act on your behalf to the best of our ability.'
In April 1992, Dr. Davis agreed to purchase Dr. Boyd's practice. At closing, the parties executed five separate documents to effectuate the purchase agreement. They included an asset sale agreement, an employment agreement and covenant not to compete, a security agreement, an option agreement, and a lease. The employment agreement provided that Dr. Davis would retain Dr. Boyd as an employee of the practice for three years to facilitate the transfer of patients. The lease provided for Dr. Davis' professional corporation to lease a portion of a three-story building owned by Dr. Boyd for the purpose of providing ophthamological services. The option permitted Dr. Davis, during the term of the lease, to exercise the option to purchase the entire building.
In September 1992, Dr. Davis learned that Dr. Boyd was the subject of formal charges by the state Medical Disciplinary Board. As a result, he had lost his hospital privileges and malpractice insurance coverage. Dr. Davis retained the law firm of Bogle & Gates to represent him in the legal proceedings that followed.
In February 1993, Dr. Davis and Dr. Boyd began arbitration proceedings that culminated in a decision by the arbitrator that the employment agreement was null and void. The arbitrator also ruled that the remaining agreements were enforceable.
When Dr. Davis moved to confirm the award in King County Superior Court, a judge vacated the award, holding that the parties had entered into a single agreement that was not severable. Dr. Davis appealed, and we reversed, reinstating the arbitrator's award. In July 1995, our Supreme Court affirmed our decision.
In June 1993, Bogle & Gates wrote Perkins Coie, then counsel for Dr. Boyd. In its letter, Bogle stated that a recent title search of the building Dr. Davis leased indicated that title was vested in a foreign entity, not Dr. Boyd. Expressing concern that this discovery
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