Issue of the Case
Two pharmacists and their pharmacyfiled a lawsuit against their former attorney,alleging malpractice on his part duringhis representation of them before thestate Board of Pharmacy in a Midwesternstate. Their case was dismissed at thetrial court level, and they appealed to thestate appellate court, arguing that thetrial court judge erred when he dismissedtheir case.
Facts of the Case
The attorney was hired by the partiesto represent them during a 2-dayhearing before the state Board ofPharmacy. The court's opinion does notdisclose the issues prompting thehearing before the board, but theymust have been very serious.Nonetheless, following consultationwith their attorney, the pharmacists didnot attend the hearing. About 6 weeksafter the hearing, the Board ofPharmacy issued an order revoking thepharmacy license of one pharmacistand the pharmacy permit of the pharmacy.The second pharmacist had hislicense suspended indefinitely.
Two days after the board's order, thepharmacists asked a court to put ahold on the administrative action sothat they could appeal to have a courtreview the decision of the board. Thetrial court did issue such an order,delaying the board's action until acourt hearing could be held.
Two months later, the attorney whohad represented the 2 pharmacists andthe pharmacy before the board withdrewfrom the case, and another attorneyreplaced him. Seven months later,the trial court affirmed the decision ofthe Board of Pharmacy, finding no errorby the board, and a year later the statecourt of appeals affirmed the trialcourt's decision. The state SupremeCourt declined a request to hear thecase. Twenty-nine months after theboard's original hearing, the licensesand permit involved were confiscatedby board representatives.
A civil lawsuit was filed by thepharmacists and the pharmacy, allegingmalpractice by their originalattorney during his representation ofthem. They also alleged that he hadbreached a special fiduciary duty heowed them. Such a duty derived from"being in a position of trust or confidenceand creating an obligation ofscrupulous good faith and candor indealings with the parties."
The attorney responded to theirlawsuit against him by arguing thatthey had delayed too long in filing thelawsuit—ie, that, under the statute oflimitations, time had run out. In thiscase, the relevant time limit was 1year. The trial court judge agreedwith the defendant-attorney's interpretationof the law and issued asummary judgment in favor of thedefendant-attorney. This judgmentmeant that the case was "open-and-shut,"and there was no need for afull hearing because the time limithad passed.
The pharmacists and the pharmacydid not agree and filed the appealthat led to the appellate court decisionin this case. Appeals must allegean error of law by the judge in thelower court, and 2 arguments weremade in this case: (1) the judge erredby granting summary judgment onthe basis of the statute of limitations;and (2) he also erred by grantingsummary judgment in favor of thedefendant-attorney on the issue ofbreach of fiduciary duty.
The Court's Ruling
The appellate court looked at theprecedent from prior cases in the statethat indicated that the relevant statute oflimitations was indeed for 1 year, andthat the time started to run "when theclient discovers, or in the exercise of reasonablecare and diligence should havediscovered, the resulting injury." In thecourt's view, under the statute of limitationsas adopted by the legislature, theopportunity for a malpractice suit againstan attorney arises and the statute of limitationsstarts to apply when there is a"cognizable event whereby the client discoversor should have discovered thathis injury was related to his attorney'sact or non-act...."
The allegation about breach of fiduciaryduty also was unsuccessful. So, thepharmacists and the pharmacy lost onboth issues.
The Court's Reasoning
The court reviewed the facts and timingof the flow of the case, beginningwith the pharmacists' and pharmacy'sargument that, because they continuedto practice pharmacy throughout thewending of the appeal through thecourt system, the "cognizable event"did not occur until the agents of theBoard of Pharmacy actually confiscatedtheir licenses. Their argument wasundercut, however, by the fact thatthey had filed a grievance about theattorney's work on their behalf with theDisciplinary Board of the State SupremeCourt, the entity that handles attorneydiscipline. They had filed the grievanceshortly after the trial court had upheldthe board decision, 11 months after theboard hearing, and 18 months beforethe final court decision. This action ontheir part clearly documented their earlierdissatisfaction with his representationof their interests.
This case highlights the importance ofcareful selection of legal counsel.
Dr. Fink is professor of pharmacy law and policy at the University of Kentucky College of Pharmacy, Lexington.