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Moshier v. Fisher

Supreme Court of Utah

August 13, 2019

Monty Moshier and Kelly Moshier, Petitioners,
v.
Darwin C. Fisher, Respondent.

         On Certiorari to the Utah Court of Appeals

          Fifth District, St. George The Honorable G. Michael Westfall No. 150500584

          Russell S. Walker, Salt Lake City, for petitioners

          Michael F. Skolnick, Salt Lake City, for respondent

          Chief Justice Durrant authored the opinion of the Court, in which Associate Chief Justice Lee, Justice Himonas, Justice Pearce, and Justice Petersen joined.

          OPINION

          DURRANT CHIEF JUSTICE

         Introduction

         ¶1 Kelly and Monty Moshier lost their opportunity to collect $874, 805.68 owed to them in a bankruptcy proceeding when their attorney, Darwin C. Fisher, failed to file their nondischargeability claim before the statute of limitations expired. Several years later, the Moshiers sued Mr. Fisher for malpractice. The district court dismissed their malpractice claim as untimely. Because we find that the malpractice claim did not accrue until the bankruptcy court confirmed the final distribution plan, the Moshiers' claim was timely. Accordingly, we reverse.

         Background

         ¶2 Kelly and Monty Moshier hired Darwin Fisher to represent them in a lawsuit against Allen and Laura Cottam, involving claims of fraud, misrepresentation, and breach of warranty. The Moshiers obtained a judgment against the Cottams in the amount of $785, 710.88. The judgment included findings of fraud, misrepresentation, and punitive damages.

         ¶3 In September 2010, the Cottams filed for bankruptcy. The Moshiers again hired Mr. Fisher to represent them in the bankruptcy proceedings. He timely filed the Moshiers' proof of claim.[1] Because the Moshiers' claim was based on a judgment for money obtained by fraud, their claim was exempt from discharge under section 523 of the Bankruptcy Code.[2] Creditors claiming this exemption from discharge must commence an independent action by filing a complaint alleging nondischargeability.[3] But Mr. Fisher failed to file the Moshiers' claim for nondischargeability by the deadline, December 29, 2010.[4] Instead, he filed the claim almost a year after the deadline, which the bankruptcy court dismissed as untimely. On January 31, 2012, the bankruptcy court confirmed the Cottams' bankruptcy plan for distribution.[5]

         ¶4 In March 2012, Mr. Fisher informed the Moshiers that he missed the deadline for filing their nondischargeability claim and that their claim had been dismissed. He told them he had filed a claim with his malpractice insurance company and suggested that they retain new counsel for the bankruptcy proceedings. The Moshiers assert they did not believe they needed to initiate any legal action against Mr. Fisher, because they believed his claim with his malpractice insurer was the equivalent of them initiating a legal proceeding. They also argue that they believed their claim was fully secured and that they would still receive the full value of their claim.[6] By 2013, the bankruptcy trustee informed the Moshiers they would not receive payment of their full claim. To date, the Moshiers have received $58, 151.72 of their secured claim and $139, 508.64 of their unsecured claim, for a total of $197, 660.36.[7]

         ¶5 In June 2014, Mr. Fisher's malpractice counsel, Michael Skolnick, sent the Moshiers a letter stating that the malpractice insurance company saw many "hurdles" that severely reduced the value of their claim. At that time or shortly thereafter, the Moshiers hired an attorney, Russell Walker, to represent them. He sent a letter to Mr. Skolnick on June 17, 2014, outlining the damage done by Mr. Fisher's failure to timely file the Moshiers' nondischargeability claim. The Moshiers filed their malpractice action against Mr. Fisher on October 6, 2015. The district court dismissed their claim as untimely, finding that the statute of limitations had expired on December 29, 2014-four years after Mr. Fisher missed the filing deadline for the nondischargeability claim. The Moshiers appealed, and the court of appeals affirmed. The Moshiers then petitioned this court for certiorari, which we granted. We have jurisdiction pursuant to Utah Code section 78A-3-102(3)(a).

         Standard of Review

         ¶6 We must determine when a legal malpractice claim accrues and the statute of limitations begins to run where an attorney misses the deadline for filing a nondischargeability claim in a bankruptcy proceeding. On certiorari, we review "the court of appeals' decision for correctness, without according any deference to its analysis."[8]The application of a statute of limitations and grant of a motion to dismiss are both questions of law, which we review for correctness.[9]But application of a statute of limitations may also ...


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