By Michael T. Fraser, Esq., Associate, Saxon, Gilmore, Carraway & Gibbons, P.A.
One of the issues that frequently crops up in Florida legal malpractice actions is when, exactly, the statute of limitations begins to run. What at first would seem to be a fairly straightforward issue, has actually resulted in numerous Florida Supreme Court and District Court decisions, including the recently decided Arrowood Indemnity Co. v. Controy, Simberg, Ganon, Krevans, Abel, Lurvey, Morrow & Schefer, P.A., —So. 3d— 2014 WL 51692 (Fla. 4th DCA Jan. 8, 2014) (“Arrowood”).
The statute of limitations for legal malpractice actions begins to run at different times, depending on whether the case is in litigation or not. The Florida Supreme Court, in Silvestrone v. Edell, 721 So. 2d 1173 (Fla. 1998), established a “bright-line” rule that the statute of limitations “begins to run when final judgment becomes final.” Id. at 1176. Final judgment becomes final when all appeals have been exhausted, or when the time to appeal has lapsed, which is thirty days following entry of judgment. Id. at 1175 n.2. Where, however, the underlying dispute is settled presuit, without there ever having been a complaint filed, the statute of limitations begins to run when the parties execute the settlement agreement. See Glucksman v. Persol North America, Inc., 813 So. 2d 122, 126 (Fla. 4th DCA 2002).
The issue in Arrowood was which date applies when the case is settled pretrial, but not presuit. Conroy Simberg was retained by Arrowood on December 6, 2005, as coverage counsel, but was discharged for actions which allegedly cost Arrowood over $2 million in additional damages and fees in October of 2007. Arrowood, thereafter, retained replacement counsel, who, along with the other parties to the case, settled the litigation, between December 15 and December 18, 2008. The plaintiff filed a stipulation for dismissal with prejudice on December 22, 2008, and the order of dismissal for the case was entered on January 12, 2009. Then, on December 22, 2010—more than three years after Conroy Simberg was discharged from representing Arrowood, and, more importantly, more than two years after the case was agreed to be settled, Arrowood filed a legal malpractice action against its former attorneys seeking recovery of the over $2 million in alleged damages.
Conroy Simberg successfully persuaded the circuit court that in light of Glucksman, the case was untimely and, therefore, must be dismissed pursuant to the statute of limitations. The Fourth District, however, reversed, holding that Silvestrone applied, in light of the fact that the underlying case had been in litigation. Indeed, the Court noted that:
“As Arrowood correctly points out, had a party not complied with the terms of the Settlement, the intervention of the trial court may have been needed. In other words, Arrowood did not know for certain that the Settlement of the underlying litigation was final until the trial court dismissed the litigation and no party timely appealed the dismissal.”Arrowood, 2014 WL 51692 at * 3.
As Arrowood illustrates, a statute of limitations analysis is completely dependent upon whether a complaint has been filed. If a complaint has been filed, then Silvestrone applies and the clock will not begin to run until the case is finally concluded, regardless of whether the case proceeds to trial and appeal, or, rather, is disposed of pursuant to a settlement agreement. However, if the case settles presuit, the settlement agreement’s execution date is when the clock will begin to run. Arrowood’s clarification of Silvestrone’s “bright-line” rule should help alleviate some of the confusion on when the statute of limitations begins to run in Florida legal malpractice actions.
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