UPDATES & ANALYSIS

5.15

Legal malpractice claim tossed by the Iowa Supreme Court because the aggrieved client waited too long to sue

by Rox Laird | May 15, 2018

A client who accused her attorney of malpractice missed the deadline for filing a lawsuit against him, according to the Iowa Supreme Court.

Michelle Skadburg said she was acting on the advice of her attorney when she used her late mother’s $107,000 estate to pay the estate’s debts, which exceeded the assets. She sued the attorney, Gary Gately of Whitfield & Eddy, alleging he failed to advise her that proceeds from the estate’s life-insurance policy and a 401(K) account were exempt from any claims against the estate.

Gately denied Skadburg’s malpractice claim and the Cerro Gordo County District Court dismissed the suit on summary judgment because it fell outside the statute of limitations. The Iowa Supreme Court upheld that ruling in a 6-0 decision handed down May 11. (Justice Daryl Hecht did not participate in the case.)

The single issue, Justice David Wiggins wrote for the Court, is whether Skadburg filed the lawsuit within the statute of limitations. In this case, that is five years from when her cause of action accrued, or when she suffered an actual injury. Since that occurred in 2008, when she paid the creditors with exempt funds, allegedly on Gately’s advice, her suit filed in August 2015 missed the deadline by two years.

Skadburg asserted three exceptions to the statutory limit – the discovery rule, the continuous-representation rule and the doctrine of fraudulent concealment – but the Court held none of the three exceptions applied.

Under the discovery rule, the statute of limitations clock starts ticking when plaintiffs discovered or should have discovered their injury. In Skadburg’s case, that was March 2010, when she wrote an email to Gately that showed she was aware of potential negligence by Gately. Nor was her cause saved by the continuous-representation rule or the fraudulent-concealment doctrine, Wiggins wrote, also based on when she became aware of problems with Gately’s advice.

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