Barnes v. Turner12/4/2003
William Barnes, Jr. (Barnes) and his company, William Barnes' Quality Auto Parts, Inc., appeal from the trial court's dismissal, based on the statute of limitation, of their complaint alleging legal malpractice against David Turner, Jr. (Turner).
This Court conducts a de novo review of the trial court's dismissal of plaintiffs' complaint, construing the allegations of the complaint most favorably to plaintiffs. Anderson v. Flake, 267 Ga. 498, 501 (480 SE2d 10) (1997); Nicholson v. Windham, 257 Ga. App. 429, 430 (571 SE2d 466) (2002).
So viewed, the complaint alleges that Turner represented Barnes and his company over a number of years in different business and financial transactions and that Barnes considered Turner to be his regular attorney when he needed legal services.
On October 1, 1996, Barnes sold his business to James and Rhonda Lipp. Turner prepared the sales agreement, lease agreement, promissory note, and UCC-1 and UCC-2 financing statements involved in the transaction. The Lipps bought the business and inventory of William Barnes' Quality Auto Parts, Inc. and leased the premises of the business from Barnes. Barnes financed $180,000 of the purchase price which was to be repaid over a period of more than ten years. The UCC-1, the security instrument for the sale of personal property and assets other than real estate , listed as collateral for the promissory note "all equipment, fixtures, inventory, accounts receivable, instruments, documents, chattel papers, and other rights to payment, and general intangibles of [the Lipps]." Turner filed the UCC-1 and UCC-2 financing statements, signed by the Lipps, in Meriwether County on October 30, 1996.
Georgia law requires that, in order to be effective beyond five years, these UCC forms must be renewed. The continuation statements "may be filed only within six months before the expiration of the five-year period . . . ." OCGA § 11-9-515 (c). The recorded forms were returned to Turner and remained in his file until December 2001. No continuation statements were filed within six months of their expiration on October 30, 2001. The Lipps made the November and December 2001 payments in December, and then defaulted on their loan, leaving a principal balance due of $142,792. Unknown to Barnes, sometime before January 29, 2001, the Lipps had obtained a line of credit loan from F & M Bank and Trust Company and executed a UCC-1 form giving the bank a security interest in the same property listed on that given to Barnes. This UCC-1 form was filed in Meriwether County on December 28, 1998. The Lipps also refinanced the auto parts business with Mid-State Automotive Distributors, Inc. on January 29, 2001, giving that company another UCC-1 form listing the same collateral. This form was filed in Meriwether County on January 29, 2001, listing as the debtor Ronnie Lipp, Inc. instead of the individual Lipps. Apparently, the Lipps had transferred all the assets purchased from Barnes to the corporation. James Lipp has filed for bankruptcy under Chapter 7 and listed Barnes as an unsecured creditor.
Barnes sued Turner on October 18, 2002, claiming that he committed legal malpractice by failing to renew the UCC forms or to inform Barnes that they had to be renewed.
Barnes acknowledges that the statute of limitation for legal malpractice actions is four years and runs from the date of the alleged incident of malpractice. See OCGA § 9-3-25; Hunter, Maclean, Exley & Dunn v. Frame, 269 Ga. 844, 845 (507 SE2d 411) (1998); Gibson v. Casto, 233 Ga. App. 403, 404 (2) (504 SE2d 705) (1998), modified on other grounds, 271 Ga. 667 (523 SE2d 564) (1999). Relying on Colormatch Exteriors, Inc. v. Hickey, 275 Ga. 249
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