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Sharts v. Natelson6/30/1993
rder, Aragon's approval to build dwelling units was reduced in number from 287 to 83 units. In our view, this is a clear "occurrence resulting in loss" and thus marks the last date on which the statute could have begun to accrue.
The quotation illuminates several points. First, where the issue turned on the legal significance of an action or document, the Court clearly rejected the completion of the appellate process as necessary to mark an "occurrence resulting in loss." Second, the Court apparently embraced the policy of relying on the latest rather than the earliest possible event which might begin the running of the limitation period. And third, the Court clearly distinguished the trial court determination of the rights of the parties from the other events that appear to be occurrences resulting in loss. We employ analogous reasoning to the present case and now turn to the events cited by the parties as dispositive to the statutory limitation issue.
III. ACCRUAL OF THE CAUSE OF ACTION AS A MATTER OF LAW
A. Sharts' Threatening Letter
Natelson contends that the statute of limitations began to run as a matter of law when Sharts sent the April 3, 1985, threatening letter. Natelson argues that Sharts' letter demonstrates he had irremediable business losses of at least $35,000. Natelson further argues that, although Sharts did not know the full extent of the harm, he knew Natelson's carelessness could cost him approximately $800,000 to $2,000,000.
However, we believe Natelson's reliance on Sharts' threat of a $35,000 lawsuit is misplaced. First, Sharts' sworn testimony indicates that his threat related only to his frustration over the pace of the declaratory judgment action, his perception that Natelson was foot-dragging, and the interest costs that were resulting from the delay. The statements indicate that Sharts may have been harmed as a result of Natelson's slow pace in litigation. Moreover, harm or loss in fact as a result of Natelson's pace of work is distinguishable from the harm or loss in fact resulting from Natelson's negligent drafting of the restrictive covenants. It is true that Sharts' reference to "legal errors" could refer to negligent draftsmanship involving the covenants. However, the reference could also be to the "legal errors" other attorneys had made in interpreting the covenants or to Natelson's pace of correcting the problem. Thus, according to the law controlling this appeal and given the conflicting inferences that can be made from the evidence, the issue should be decided in Sharts' favor at the summary judgment stage.
Natelson's reliance on Sharts' threat of a larger malpractice suit is similarly misplaced. Sharts' threat was explicitly conditioned on whether Natelson was successful in the declaratory judgment action. At his deposition, Sharts testified that he still believed in Natelson and believed the Natelson could lift the cloud from the title of his property. Therefore, because this evidence is also controverted, summary judgment would be inappropriate. See ; (substantial dispute as to a material fact forecloses summary judgment).
Natelson also contends that the threat of legal action by other attorneys concerning the application of the covenants to Tract Two demonstrates that Sharts knew or should have known that Natelson committed malpractice and, as a result, harmed Sharts. However, Natelson's reliance on notice to Sharts from legal counsel obtained by the owners of lots in Tract One that the covenants may have a meaning contrary to that held by Sharts is mistaken. Even a properly prepared set of covenants cannot prevent a party from challenging the application of the covenant
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