Issue of the Case
Two pharmacists and their pharmacy filed a lawsuit against their former attorney, alleging malpractice on his part during his representation of them before the state Board of Pharmacy in a Midwestern state. Their case was dismissed at the trial court level, and they appealed to the state appellate court, arguing that the trial court judge erred when he dismissed their case.
Facts of the Case
The attorney was hired by the parties to represent them during a 2-day hearing before the state Board of Pharmacy. The court's opinion does not disclose the issues prompting the hearing before the board, but they must have been very serious. Nonetheless, following consultation with their attorney, the pharmacists did not attend the hearing. About 6 weeks after the hearing, the Board of Pharmacy issued an order revoking the pharmacy license of one pharmacist and the pharmacy permit of the pharmacy. The second pharmacist had his license suspended indefinitely.
Two days after the board's order, the pharmacists asked a court to put a hold on the administrative action so that they could appeal to have a court review the decision of the board. The trial court did issue such an order, delaying the board's action until a court hearing could be held.
Two months later, the attorney who had represented the 2 pharmacists and the pharmacy before the board withdrew from the case, and another attorney replaced him. Seven months later, the trial court affirmed the decision of the Board of Pharmacy, finding no error by the board, and a year later the state court of appeals affirmed the trial court's decision. The state Supreme Court declined a request to hear the case. Twenty-nine months after the board's original hearing, the licenses and permit involved were confiscated by board representatives.
A civil lawsuit was filed by the pharmacists and the pharmacy, alleging malpractice by their original attorney during his representation of them. They also alleged that he had breached a special fiduciary duty he owed them. Such a duty derived from "being in a position of trust or confidence and creating an obligation of scrupulous good faith and candor in dealings with the parties."
The attorney responded to their lawsuit against him by arguing that they had delayed too long in filing the lawsuitie, that, under the statute of limitations, time had run out. In this case, the relevant time limit was 1 year. The trial court judge agreed with the defendant-attorney's interpretation of the law and issued a summary judgment in favor of the defendant-attorney. This judgment meant that the case was "open-and-shut," and there was no need for a full hearing because the time limit had passed.
The pharmacists and the pharmacy did not agree and filed the appeal that led to the appellate court decision in this case. Appeals must allege an error of law by the judge in the lower court, and 2 arguments were made in this case: (1) the judge erred by granting summary judgment on the basis of the statute of limitations; and (2) he also erred by granting summary judgment in favor of the defendant-attorney on the issue of breach of fiduciary duty.
The Court's Ruling
The appellate court looked at the precedent from prior cases in the state that indicated that the relevant statute of limitations was indeed for 1 year, and that the time started to run "when the client discovers, or in the exercise of reasonable care and diligence should have discovered, the resulting injury." In the court's view, under the statute of limitations as adopted by the legislature, the opportunity for a malpractice suit against an attorney arises and the statute of limitations starts to apply when there is a "cognizable event whereby the client discovers or should have discovered that his injury was related to his attorney's act or non-act...."
The allegation about breach of fiduciary duty also was unsuccessful. So, the pharmacists and the pharmacy lost on both issues.
The Court's Reasoning
The court reviewed the facts and timing of the flow of the case, beginning with the pharmacists' and pharmacy's argument that, because they continued to practice pharmacy throughout the wending of the appeal through the court system, the "cognizable event" did not occur until the agents of the Board of Pharmacy actually confiscated their licenses. Their argument was undercut, however, by the fact that they had filed a grievance about the attorney's work on their behalf with the Disciplinary Board of the State Supreme Court, the entity that handles attorney discipline. They had filed the grievance shortly after the trial court had upheld the board decision, 11 months after the board hearing, and 18 months before the final court decision. This action on their part clearly documented their earlier dissatisfaction with his representation of their interests.
This case highlights the importance of careful selection of legal counsel.
Dr. Fink is professor of pharmacy law and policy at the University of Kentucky College of Pharmacy, Lexington.