When is the peach ready for plucking? Ripeness of legal malpractice claims under Florida law
Determining when a given cause of action has accrued under Florida law is often tricky business. Claims filed too early in the process often become the subject of motion practice and court orders staying the action. On the other end of the time continuum, claims filed too late may become time-barred by the applicable statutes of limitation. Like many causes of action under Florida law, the statute of limitation for legal malpractice claims is set forth in Chapter 95 of the Florida Statutes. Under Florida law, legal malpractice claims must be brought within two years. Fla. Stat. § 95.11(4)(a).
Initially, Florida courts created a dichotomy between legal malpractice claims grounded in litigation services and transactional services. Beginning with dicta in the accountant malpractice case of Peat, Marwick, Mitchell & Co. v. Lane, 565 So. 2d 1323, 1325 (Fla. 1990) and its progeny, including Silvestrone v. Edell, 721 So.2d 1173, 1175 (Fla.1998), Florida courts sought a simplified rule for accrual of legal malpractice claims regardless of the types of legal services rendered by the attorney.
The Redressable Harm Test
In a general sense, “[a] cause of action accrues when the last element constituting the cause of action occurs.” Fla. Stat. § 95.031(1). A legal malpractice claim generally consists of three elements (1) the attorney’s employment; (2) the attorney’s neglect of a reasonable duty; and 3) the attorney’s negligence as the proximate cause of loss to the client. Law Office of David Stern v. Security National Servicing Corporation, 969 So. 2d 962, 966 (Fla. 2007).
“Redressable harm relates to the third element of a legal malpractice claim—the element of damages.” Hold v. Manzini, 736 So. 2d 138, 142 (Fla. 3d DCA 1999). A claim for legal malpractice does not become ripe until redressable harm, injury, or loss surfaces. Prior to the presence of redressable harm, “a legal malpractice claim is hypothetical and damages are speculative.” Id.
“Knowledge of potential harm from malpractice is not sufficient to begin the limitations period.” Taracido v. Perez-Abre, Zamora & De La Fe, P.A., 705 So. 2d 41, 42 (Fla. 3d DCA 1997), approved sub nom. Perez-Abreu, Zamora & De La Fe, P.A. v. Taracido, 790 So. 2d 1051 (Fla. 2001).
Despite this so-called bright-line rule, the rub with many legal malpractice claims lies in determining when redressable harm occurs.
Litigation Based Legal Malpractice Claims
In the litigation based legal malpractice context, the two year statute of limitations “begins to run when final judgment [in the underlying litigation giving rise to the malpractice] becomes final.” Silverstrone, 721 So. 2d at 1175-76. A judgment becomes final upon:
- The expiration of the time to file an appeal
- If an appeal is filed:
- Upon the appeal being affirmed
- The expiration of the deadline to file a motion for rehearing
- The appellate court’s denial of the motion for rehearing
Otero v. Arcia, 44 Fla. L. Weekly D 553 (Fla. 5th DCA February 22, 2019); Silverstrone, 721 So. 2d at 1175 n.2.
Until appellate review of the underlying litigation matter is completed, “one cannot determine if there was any actionable error by the attorney.” Peat, Marwick, 565 So. 2d at 1325. “A favorable result for the client in the lawsuit-which could be the result of appellate proceedings-would, of course, mean that the client suffered no loss.” Larson & Larson, P.A. v. TSE Industries, Inc., 22 So. 3d 36, 42 (Fla. 2009) (internal quotations and citations omitted). “But once a judgment adverse to the client has reached the point of finality, the last element constituting the malpractice cause of action occurs, that is, the element of loss to the client.” Id.
Transactional Based Legal Malpractice Claims
Legal malpractice claims can also arise from the attorney’s negligent rendition of services in conjunction with real estate transactions, corporate transactions, negotiation and drafting of general contracts, estate planning, etc. Under Florida law, a legal malpractice claim requires the same elements regardless of whether the malpractice springs from litigation or transactional services. Whether the alleged negligence arises from services performed by an attorney in the litigation context or the transactional context, the existence of redressable harm is the key event in transforming an inchoate malpractice claim into a ripe one. Therefore, a legal malpractice claim in the transactional context does not commence upon the negligent performance of the legal services. On the contrary, “a cause of action for legal malpractice based upon a prior transaction accrues at the conclusion of subsequent litigation between the client and a third party.” Taracido, 705 So. 2d at 43.
In other words, the alleged negligent legal services of the attorney must be tested in legal proceedings, conclude with an unfavorable result for the client, and the appellate review process must be fully exhausted before the client can pursue a legal malpractice claim. Because ill-fated transactions may not manifest into litigation for many years, a claim for legal malpractice arising out of transactional services could arise years after the legal services were rendered without being barred by the two year statute of limitations. See e.g. Throneburg v. Boose, Casey, Ciklin, Lubitz, Martens, McBane & O’Connell, P.A., 659 So. 2d 1134, 1135 (Fla. 4th DCA 1995) (legal malpractice claim arising out of preparation of an amendment to declaration of covenants did not begin to run until a circuit court ruled that the amendment was invalid, not when the legal services were performed); Robbat v. Gordon, 771 So. 2d 631, 637 (Fla. 4th DCA 2000) (legal malpractice action arising out of the preparation of a post-nuptial agreement was not barred by the two year statute of limitations where the lawsuit was filed within two years of completion of the appellate process).
The Discovery Rule
While Florida courts endeavored to create a simple, bright-line test for accrual of legal malpractice claims irrespective of the type of services rendered by the attorney, another wrinkle in the accrual analysis has existed in the Florida Statutes. The Florida Legislature engrafted a delayed discovery doctrine principle whereby the two year statute of limitations for professional malpractice claims runs “from the time the cause of action is discovered or should have been discovered with the exercise of due diligence.” Fla. Stat. § 95.11(4)(a). Stated differently, the two year statute of limitations “does not commence to run at the time the services are rendered by the attorney, but rather when the attorney’s act of negligence becomes known or should have become known to the client.” Burnside v. McCrary, 382 So. 2d 75, 76 (Fla. 3d DCA 1980).
There is scant case law reconciling the bright-line, redressable harm test and the delayed discovery provision found in Fla. Stat. § 95.11(4)(a). Modern case law on the subject suggests that the redressable harm test has supplanted the delayed discovery provision, or at least is the primary consideration in the accrual analysis. Nevertheless, there are two primary considerations for determining when a cause of action for a legal malpractice claim accrues under Florida law. Whether the claim is litigation based or transactional based, a legal malpractice claim does not accrue “until the existence of a redressable harm or injury has been established and the injured party knows or should know of either the injury or the negligent act.” Throneburg, 659 So. 2d at 1136–37. While the rule is easily identified in case law, application of the rule to the unique facts of each case is often a complicated, fact-driven inquiry.