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DEARBORN ANIMAL CLINIC3/1/1991
The opinion of the court was delivered by
Plaintiffs, Dearborn Animal Clinic, P.A., and Central Animal Hospital, Inc., appeal from an order of summary judgment in favor of the defendant in a legal malpractice action filed against their former attorney, Charles R. Wilson. The trial court held the action was barred by the statute of limitations, K.S.A. 60-513. The Court of Appeals affirmed the trial court in an unpublished opinion, Dearborn Animal Hosp. v. Wilson, No. 63,904, filed May 25, 1990. We granted review, and we now affirm the Court of Appeals and the district court.
The facts are complicated and will be set forth in detail. Dearborn Animal Clinic, P.A., (Dearborn) was a professional corporation owned by Jim Guglielmino, D.V.M., and Patricia Stewart, D.V.M. Dearborn owned and operated several veterinary clinics in the Johnson County area. Central Animal Hospital, Inc., (Central) was a corporation which owned veterinary equipment. Dearborn owned two-thirds of the capital stock of Central and William L. (Luke) Fry, D.V.M., owned the other one-third. Several area veterinary clinics used Central's equipment and paid a percentage of their gross revenues to Central for the use of such equipment.
In the fall of 1984, Dearborn decided to sell one of its clinics the Antioch 75 Clinic, and stock in Central to Thomas Holenbeck, D.V.M. Charles R. Wilson (Wilson or defendant), an attorney for Dearborn and Central, was asked to draft an asset purchase agreement between Dearborn and Holenbeck. Dr. Guglielmino testified he told Wilson to be sure Holenbeck was required to buy stock in Central. Wilson drafted the "Asset Purchase Agreement" which Dearborn and Holenbeck signed on November 30, 1984. Central was not a party to the agreement.
The contract provided for a purchase price of $82,500 to be paid in monthly installments for the Antioch 75 Clinic and $30,430
for one-fourth of the stock in Central. In December of 1984, Holenbeck began paying Dearborn $1,200 per month on the contract. In December of 1985, Holenbeck lowered his monthly payments to $879, informing Guglielmino that he had not purchased stock in Central and did not wish to exercise his option to purchase the stock.
On December 26, 1985, Glen Beal, an attorney for Dearborn, sent Holenbeck a letter, demanding full payment of the balance due on the $82,500 sales price plus interest and alleging that Holenbeck had breached the terms of the agreement. On December 30, 1985, Michael Merriam, an attorney for Holenbeck, responded by letter, stating in part: "I have advised Dr. Holenbeck that I see no duty on his part to do so under the terms of the agreement, as he is not in default in any respect, and even if he were, the contract does not provide for acceleration of the entire purchase price balance."
On February 26, 1986, Dearborn sued Holenbeck in Johnson County District Court for breach of contract. As a part of the original asset purchase agreement, Holenbeck had agreed to pay Central 20% of his gross revenues for the use of Central's equipment and services. Holenbeck stopped making such payments after Dearborn filed the Johnson County action.
The Johnson County lawsuit against Holenbeck will hereafter be referred to as the Holenbeck suit or the underlying action.
Discovery was undertaken in the Holenbeck suit and, although the record before us from that action is skimpy, it does include Dr. Stewart's answers on behalf of Dearborn to extensive interrogatories, and it appears that Stewart and Guglielmino were both deposed at length. The principal allegations in the Holenbeck suit, which are relevant to this appeal, were based upon the conte
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