Texas Expands Statute of Limitations at Akin Gump’s Expense

/ 20.Nov, 2012

Last year Akin Gump Strauss Hauer & Feld won summary judgment in a legal malpractice action arising out of a failed real estate development.  The real estate developer, Riverwalk Cy Hotel Partners, hired Akin Gump to represent it in the purchase of a tract of land.  Riverwalk then contracted with Lyda Sinerton Builders Inc. to build a hotel.  Akin Gump was subsequently retained to defend Riverwalk in a nuisance, business interference and trespass claim.  The nuisance claim arose out of dust and debris at the construction site.

The legal malpractice action was based on a contention that Akin Gump did not seek indemnification for Riverwalk from Lyda.  Riverwalk also alleged Akin Gump overbilled it during the representation.   Akin Gump filed for summary judgment based upon the expiration of the applicable statute of limitations.  Summary judgment was granted, and Riverwalk appealed.  On appeal, the Fourth District Court of Appeals in San Antonio reversed and remanded, holding the statue limitations was stayed until the expiration of all appeals in the underlying action.  While this is been the law in Texas for some time, Akin Gump had argued it was not applicable in this matter because the underlying action did not stem from the alleged legal malpractice.  The Court of Appeals disagreed, noting the legal malpractice claims “arise out of” the underlying lawsuit.

The law on statutes of limitations in legal malpractice cases is different throughout the country.  In Pennsylvania, legal malpractice cases are subject to an occurrence rule, so that the statue limitations begins to run at the time the alleged legal malpractice occurred, and pendency of appeals does not toll the statute of limitations.  See, Robbins & Seventko Orthopedic Surgeons, Inc. v. Geisenberger, 449 Pa.Super. 367, 674 A.2d 244, 248 (Pa. Super. 1996).  When bringing or defending a legal malpractice action, a careful analysis of the applicable statute of limitations is vitally important.

Josh J.T. Byrne, Esquire