San Francisco Residence Club Inc et al v. Leader Bulson & Nolan PLC et al

Filing 140

MEMORANDUM OPINION. Signed by Chief Judge Karon O Bowdre on 9/27/2018. Associated Cases: 2:14-cv-01953-KOB, 2:14-cv-01954-KOB, 2:14-cv-01955-KOB(JLC)

FILED
2018 Sep-27 PM 02:57
U.S. DISTRICT COURT
N.D. OF ALABAMA

UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ALABAMA
SOUTHERN DIVISION
SAN FRANCISCO RESIDENCE
CLUB, INC., et al.,
Plaintiffs,
v.
LEADER, BULSO & NOLAN,
PLC, et al.,
Defendants.

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Case Nos.: 2:14-CV-1953-KOB
2:14-CV-1954-KOB
2:14-CV-1955-KOB
This Document Relates to All Cases

MEMORANDUM OPINION
This legal malpractice matter comes before the court on Defendants Leader,
Bulso & Nolan and Eugene Bulso’s (collectively “LBN”) motions for partial
summary judgment in these three consolidated cases. (2:14-cv-1953-KOB, Doc.
118; 2-14-cv-1954-KOB, Docs. 117, 120; 2-14-cv-1955-KOB, Doc. 116).
These claims trace their origins to Alabama real estate investments Plaintiffs
made in the 2000s. LBN represented Plaintiffs San Francisco Residence Club,
Inc., Thomas O’Shea, Anne Donahue O’Shea, Kate Larkin Donahue, and
Grandview Credit, LLC in lawsuits in Alabama arising out of these real estate
transactions. Plaintiffs allege that LBN committed legal malpractice in the course
of its representation by failing to timely supplement Plaintiffs’ Rule 26 damages
disclosures in one case, negligently drafting a settlement agreement in that same

case, and overbilling in all matters. LBN argues that the statute of limitations bars
most of Plaintiffs’ claims, which is the basis of its motions for partial summary
judgment.
As discussed below, the court WILL DENY IN PART and WILL GRANT
IN PART LBN’s motions for partial summary judgment. First, the statute of
limitations does not bar Plaintiffs’ claims concerning LBN’s untimely
supplementation. The two-year limitations period was tolled until Plaintiffs
discovered LBN’s failure to timely supplement Plaintiffs’ Rule 26 damages
disclosures; Plaintiffs then timely brought suit within two years of discovery. And
the statute of limitations does not restrict Plaintiffs’ overbilling claims to invoices
issued within the two years before this lawsuit began; the court needs more
information on these particular claims, because depending on when Plaintiffs
discovered or should have discovered the overbilling, Plaintiffs may bring claims
for overbilling in invoices issued up to four years before this lawsuit. But the
statute of limitations bars Plaintiffs’ claims concerning the drafting of the
settlement agreement.
I.

STANDARD OF REVIEW
When considering a motion for summary judgment, the court must view the

evidence in the record in the light most favorable to the non-moving party and
draw reasonable inferences in favor of the non-moving party. White v. Beltram
2

Edge Tool Supply, Inc., 789 F.3d 1188, 1191 (11th Cir. 2015). The court must
decide whether “the movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a matter of law.” Fed. R.
Civ. P. 56(a). Not all factual disputes defeat a motion for summary judgment.
“‘Genuine disputes [of material fact] are those in which the evidence is such that a
reasonable jury could return a verdict for the non-movant. For factual issues to be
considered genuine, they must have a real basis in the record.’” Evans v. Books-AMillion, 762 F.3d 1288, 1294 (11th Cir. 2014) (alteration in original) (quoting Mize
v. Jefferson City Bd. of Educ., 93 F.3d 739, 742 (11th Cir. 1996)).
For this motion, the parties primarily raise questions of law as applied to the
facts. The court accordingly devotes the majority of this memorandum opinion to
resolving purely legal issues. But Plaintiffs contend that genuine issues of material
fact exist as to Plaintiffs’ negligent drafting and equitable tolling claims, and so the
court will also address the purported factual disputes as to those claims.
II.

BACKGROUND
Based on a request from the Special Master overseeing the mediation of this

complex legal dispute, the court instructed the parties to file initial dispositive
motions only on the statute of limitations issue. (Doc. 117).1 Accordingly, the
court presents only facts relevant to understanding the statute of limitations issue.
1

Record citations without a case name or number refer to docket entries in the lead case,
2:14-cv-01953-KOB.

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A.

The Underlying Lawsuits

LBN represented Plaintiffs in several lawsuits arising out of botched real
estate transactions in Huntsville, Alabama. Plaintiffs sued, among other
defendants, Wilmer & Lee, P.A., the law firm that acted as escrow agent for the
purchase of commercial property called Park Tower, and Scott McDermott, a
residential real estate agent. San Francisco Residence Club, Inc., et al. v. Park
Tower, LLC, et al., No. 5:08-cv-01423-AKK (N.D. Ala. Aug. 8, 2008) (the “Park
Tower” case).
In a separate action, Plaintiffs sued Wilmer & Lee and Mr. McDermott for
allegedly mishandling the purchase of additional properties called Moquin,
Fountain, and Corporate Drive. San Francisco Residence Club, Inc., et al. v.
Baswell-Guthrie, et al., No. 5:09-cv-00421-CLS (N.D. Ala. Mar. 3, 2009) (the
“Baswell-Guthrie” case).
While representing Plaintiffs in both cases, LBN billed Plaintiffs monthly
for work on both cases. (See Docs. 131-1, 131-4). In the monthly invoices, LBN
provided an itemized list of services performed, timekeeping records, amounts due
for services and disbursements, and total balance due.
On July 13, 2010, Plaintiffs entered into a pro tanto settlement agreement
with Mr. McDermott and his associates in the Park Tower case, after which
Wilmer & Lee remained as a defendant. (Doc. 22-5). Pursuant to the settlement
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agreement, Plaintiffs obtained title to Park Tower. Defendant Eugene Bulso
drafted the final settlement agreement. (Doc. 124-2 at 3-4). A prior negotiating
paper for the settlement agreement contained a provision holding the McDermott
defendants personally liable for Park Tower’s obligations. The final settlement
agreement signed on July 13, 2010 did not contain that provision. For purposes of
this motion only, the court will assume that the omission of personal liability was a
drafting error and did not accurately reflect the negotiated agreement.
On September 27, 2010, in the Park Tower case, Judge Abdul Kallon
ordered Plaintiffs to “supplement their prior disclosures regarding damages” by
October 11, 2010 in light of the settlement agreement with some, but not all
defendants in that case. (Park Tower, Doc. 242 at 2). On October 11, 2010, LBN
filed supplemental Rule 26 damages disclosures in which LBN divulged for the
first time that Plaintiffs sought to recover loss of value and loss of income damages
for the three years during which the McDermott defendants owned and operated
Park Tower. (Park Tower, Doc. 246-1 at 2).
On October 15, 2010, Wilmer & Lee asked the court to strike the loss of
value and loss of income categories of damages from the supplemental Rule 26
disclosures. (Park Tower, Doc. 246). Wilmer & Lee argued that defending against
new damage claims would impose severe and unreasonable financial burdens. On
March 31, 2011, Judge Kallon found that Plaintiffs had no substantial justification
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to assert new categories of damages so late in the proceedings and that re-opening
discovery for those claims would harm Wilmer & Lee. (Park Tower, Doc. 262 at
9-10). Accordingly, pursuant to Rule 37(c)(1) of the Federal Rules of Civil
Procedure, Judge Kallon precluded Plaintiffs from pursuing loss of value and loss
of income damages against Wilmer & Lee.
B.

The Current Actions

On October 26, 2012, Plaintiffs filed a complaint bringing malpractice and
several other claims against LBN in the Superior Court of California in Marin
County. (2:13-cv-00951-SLB, Doc. 1 at 1-2, 13-17). Plaintiffs did not serve
process on LBN. On January 29, 2013, Plaintiffs filed an amended complaint in
the Superior Court and served process on LBN the same day. (Id. at 2).
On February 25, 2013, LBN removed the state court action to the United
States District Court for the Northern District of California. (2:13-cv-00951-SLB,
Doc. 1 at 1). On May 14, 2013, the district court transferred the case to the
Northern District of Alabama. (2:13-cv-00951-SLB, Doc. 14). On September 8,
2014, Judge Sharon Blackburn ordered Plaintiffs to replead and refile their
underlying claims as separate actions, each of which would relate back to the filing
date of Plaintiffs’ original complaint. (2:13-cv-00951-SLB, Doc. 44 at 2).
On October 10, 2014, Plaintiffs filed three separate actions: (1) San
Francisco Residence Club, Inc., et al. v. Leader, Bulso & Nolan, PLC, et al., 2:146

cv-01953, bringing malpractice claims related to the Park Tower case; (2) San
Francisco Residence Club, Inc., et al. v. Leader, Bulso & Nolan, PLC, et al., 2:14cv-01954, bringing malpractice claims related to the Baswell-Guthrie case; and (3)
O’Shea, et al. v. Leader, Bulso & Nolan, PLC, et al., 2:14-cv-01955, bringing elder
abuse claims under California law. Those three cases later were reassigned to the
undersigned judge. Because the cases involve a common question of law or fact,
the court consolidated the three cases. (Doc. 45).
Among other contentions, Plaintiffs allege that LBN violated the Alabama
Legal Services Liability Act, Ala. Code § 6-5-570, et seq. (“ALSLA”), by failing
to timely supplement Plaintiffs’ Rule 26 damages disclosures in the Park Tower
case, which Plaintiffs contend cost them millions of dollars of damages, and by
overbilling Plaintiffs for unnecessary and unreasonable legal services. (Doc. 1 at
¶¶ 10-11, 13). The court presumes that Plaintiffs allege also that LBN negligently
drafted the July 13, 2010 pro tanto settlement agreement in the Park Tower case,
which did not hold the McDermott defendants personally liable for Park Tower’s
obligations.2
The court appointed James Pratt to serve as a Special Master in this action
2

The court cannot locate any pleading in which Plaintiffs claim that LBN negligently
drafted a settlement agreement. The claim seems to arise from an expert witness report
challenging LBN’s drafting and a line of questioning at the deposition of an LBN attorney.
(Doc. 120-3 at ¶ 13; Doc. 124-2 at 2-4). Nevertheless, the parties have fully briefed the issue as
if Plaintiffs had pled the claim, and so in an abundance of caution—and for the purposes of this
motion only—the court will consider the timeliness of any negligent drafting aspect of Plaintiffs’
ALSLA claims.

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and stayed the case pending mediation. (Doc. 113 at 1-2). On March 20, 2018,
based on a request from the Special Master, the court lifted the stay in this case
only to allow the parties to file partial summary judgment motions on the statute of
limitations issue. (Doc. 117).
LBN moved for partial summary judgment based on the ALSLA statute of
limitations. (Doc. 118). LBN argues that the statute of limitations bars all of
Plaintiffs’ ALSLA claims as they relate to the supplemental Rule 26 damages
disclosures and negligent drafting. Also, LBN argues that the statute of limitations
restricts Plaintiffs’ overbilling claims to invoices issued to Plaintiffs within the two
years prior to this lawsuit.
With this background in mind, the court will analyze the timeliness of
Plaintiffs’ ALSLA claims.
III.

DISCUSSION
A.

Commencement Date

The court must first determine when Plaintiffs began this action for statute
of limitations purposes; that is, when they filed the complaint with “a bona fide
intent to have it immediately served.” Dunnam v. Ovbiagele, 814 So. 2d 232, 238
(Ala. 2001).3 Plaintiffs filed their original complaint in Marin County, California

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Although Plaintiffs filed their original complaint in California state court, Plaintiffs
bring their malpractice claims specifically under the ALSLA. Plaintiffs’ claims are therefore
subject to the ALSLA’s statute of limitations and the law is clear that an ALSLA action is

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on October 26, 2012, but did not serve LBN until they amended their complaint on
January 29, 2013. (2:13-cv-00951-SLB, Doc. 1 at 1-2). The record contains no
evidence of Plaintiffs’ effort or intent to serve LBN before January 29, 2013.
Therefore, the court finds that Plaintiffs began this action for statute of limitations
purposes on January 29, 2013.
B.

Statute of Limitations

The ALSLA statute of limitations provides that “[a]ll legal service liability
actions against a legal service provider must be commenced within two years after
the act or omission or failure giving rise to the claim, and not afterwards.” Ala.
Code § 6-5-574(a). The statute also provides a “savings clause”: if a plaintiff does
not discover or could not reasonably have discovered the cause of action within
two years after the “act or omission or failure” giving rise to the claim, “then the
action may be commenced within six months from the date of such discovery or
the date of discovery of facts which would reasonably lead to such discovery,
whichever is earlier.” Id. But the statute also places an absolute four-year bar on
any claim. Even if the plaintiff did not or could not discover the cause of action
within two years, “in no event may the action be commenced more than four years
after such act or omission or failure.” Id.

commenced for purposes of the ALSLA statute of limitations when the complaint is filed with a
bona fide intent to have it immediately served. See ENT Assocs. of Alabama, P.A. v. Hoke, 223
So. 3d 209, 214 (Ala. 2016).

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Before deciding when the statute of limitations clock ran out, the court first
must decide when it began to tick. Not surprising, the parties dispute when the
two-year limitations period begins to run. Plaintiffs argue that Alabama follows
the so-called “injury rule” and the limitations period begins to run when a plaintiff
suffers actual injury from a lawyer’s malpractice. LBN, on the other hand, argues
that Alabama follows the so-called “occurrence rule” and the limitations period
begins to run when a lawyer commits the “act or omission or failure” giving rise to
the malpractice claim, regardless of when a plaintiff sustains injury.
But both parties are correct—at least to some degree. The parties’ dispute
arises out of confusing Alabama Supreme Court precedent. The Alabama Supreme
Court has recognized both the injury rule and the occurrence rule as triggers to
start the statute of limitations. Initially, the Alabama Supreme Court followed the
injury rule, pursuant to which the statute of limitations begins to run when the
plaintiff suffers “damages” or a “legal injury” from the alleged malpractice.
Mississippi Valley Title Ins. Co. v. Hooper, 707 So. 2d 209, 213 (Ala. 1997);
Cantrell v. Stewart, 628 So. 2d 543, 545 (Ala. 1993); Michael v. Beasley, 583 So.
2d 245, 252 (Ala. 1991).
Then, the Alabama Supreme Court changed horses and adopted the
occurrence rule, pursuant to which “a legal-malpractice cause of action accrues,
and the statute-of-limitations period begins to run, when ‘the act or omission or
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failure giving rise to the claim’ occurs, and not when the client first suffers actual
damage.” Ex parte Panell, 756 So. 2d 862, 868 (Ala. 1999) (plurality opinion)
(footnote omitted) (quoting Ala. Code § 6-5-574(a)).
Since Panell, the Alabama Supreme Court has sometimes applied the
occurrence rule and sometimes used the injury rule, but it has never explained how
to decide which trigger to use.
For example, the Alabama Supreme Court applied the Panell occurrence
rule in Ex parte Seabol, 782 So. 2d 212, 214 (Ala. 2000) and Dennis v. Northcutt,
887 So. 2d 219, 221 (Ala. 2004). But the Alabama Supreme Court still applied the
injury rule in three cases decided after Panell: Price v. Ragland, 966 So. 2d 246,
259 (Ala. 2007); Wesson v. McCleave, Roberts, Shields & Green, P.C., 810 So. 2d
652, 658-59 (Ala. 2001); Sirote & Permutt, P.C. v. Bennett, 776 So. 2d 40, 44-45
(Ala. 2000). And in multiple opinions, the Alabama Supreme Court declined to
elect between the occurrence rule and the injury rule because both triggers
produced the same result. See Coilplus-Alabama, Inc. v. Vann, 53 So. 3d 898, 906
(Ala. 2010); Denbo v. DeBray, 968 So. 2d 983, 991 (Ala. 2006); Floyd v. Massey
& Stotser, P.C., 807 So. 2d 508, 511 (Ala. 2001).
Although the Alabama Supreme Court has not established conclusively
which rule governs under what circumstances, the Court articulated clearly that a
discovery and tolling principle applies to the ALSLA statute of limitations: “the
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running of the limitations period is tolled until the client discovers, or reasonably
should discover, the attorney’s act or omission or failure.” Seabol, 782 So. 2d at
214.
Case law demonstrates how this discovery and tolling principle coexists with
the ALSLA’s two-year limitations period, six-month savings period, and absolute
four-year bar. In Seabol, in which the Alabama Supreme Court applied the
occurrence rule, the plaintiff discovered the occurrence more than two years later,
but within the four-year bar. A genuine dispute existed as to whether the plaintiff
should have discovered the occurrence at an earlier time. Seabol, 782 So. 2d at
216. If the plaintiff should have discovered the occurrence within two years, then
the ALSLA savings clause would not apply, but if the plaintiff could not have
discovered the occurrence within two years, then the plaintiff could bring his claim
within six months of discovery under the savings clause. The Alabama Supreme
Court remanded the case for the trial court to determine when the plaintiff should
have discovered the occurrence. Id. at 216-17.
In Denbo, the absolute four-year bar precluded the plaintiff’s claims because
he discovered both the occurrence and the injury more than four years after the
trigger of the statute of limitations under either approach. 968 So. 2d at 990. In
Vann, the plaintiff discovered the occurrence and the injury more than two years
later and could not have discovered the occurrence and injury at any earlier time.
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But because the plaintiff brought his claim more than six months after discovery,
the savings clause could not save the day and his claim was time-barred. Vann, 53
So. 3d at 906-07. And in Floyd, the plaintiff brought suit more than two years after
he discovered the occurrence and the injury, so neither tolling nor the savings
clause could save his claim. 807 So. 2d at 511-12.
As in Denbo, Vann, and Floyd, the court does not need to decide whether the
occurrence rule or the injury rule governs under Alabama law. As discussed
below, both rules produce the same outcome in this case: Plaintiffs timely brought
their claim that LBN failed to timely supplement Plaintiffs’ Rule 26 disclosures,
Plaintiffs are not limited to claims of overbilling in invoices issued during the two
years prior to this lawsuit, and Plaintiffs’ claim of negligent drafting is time-barred.
1.

Claim Arising From Supplemental Rule 26 Disclosures

Plaintiffs first allege that LBN committed malpractice by failing to timely
supplement their Rule 26 damages disclosures in the Park Tower case. So the “act
or omission or failure” occurred sometime before October 11, 2010 (when LBN
filed the supplement), more than two years before Plaintiffs began this action.
However, Plaintiffs did not and could not discover the occurrence until
March 31, 2011. On that day, Judge Kallon decided that the October 11, 2010
supplement came too late. Before Judge Kallon’s order, Plaintiffs could not have
known that the time to assert new categories of damages had passed—the Federal
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Rules of Civil Procedure do not set a firm deadline on supplementation and LBN
actually complied with Judge Kallon’s order to supplement on or before October
11, 2010. See Fed. R. Civ. P. 26(e)(1)(A) (a party must supplement its Rule 26
disclosures “in a timely manner”); (Park Tower, Doc. 242 at 2) (“Plaintiffs should
supplement their prior disclosures by October 11, 2010.”). Plaintiffs simply could
not have known that LBN did not timely add new categories of damages until
Judge Kallon made that finding.
So, pursuant to Seabol, the two-year limitations period did not begin to run
until discovery of the failure on March 31, 2011. See Seabol, 782 So. 2d at 214
(“[T]he running of the limitations period is tolled until the client discovers, or
reasonably should discover, the attorney’s act or omission or failure.”). Plaintiffs
timely brought suit on this claim less than two years later on January 29, 2013.
The injury rule produces the same result. Plaintiffs suffered injury on March
31, 2011 when, because of LBN’s failure to timely supplement Plaintiffs’ Rule 26
damages disclosures, the court blocked Plaintiffs from pursuing several million
dollars in loss of value and loss of income damages. Again, Plaintiffs timely
brought suit within two years of suffering injury.
Therefore, the ALSLA statute of limitations does not bar Plaintiffs’ claims
as they relate to LBN’s failure to timely supplement Plaintiffs’ Rule 26 damages
disclosures in the Park Tower case and the court will deny LBN’s motions for
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partial summary judgment as to those claims.
2.

Overbilling

The court next addresses Plaintiffs’ claims that LBN overbilled them in
several invoices issued for work done in the Park Tower and Baswell-Guthrie
cases. Plaintiffs first argue that their overbilling claims are compulsory or
permissive counterclaims to LBN’s attorneys’ fee liens asserted in the Park Tower
and Baswell-Guthrie cases and thus exempt from the ALSLA statute of limitations.
(Doc. 123-1 at 33-36). On October 28, 2011, in both the Park Tower case and the
Baswell-Guthrie case, LBN filed a “Notice of Attorneys Lien” which stated, “[t]he
undersigned hereby serves notice that, pursuant to Ala. Code 1975 § 34-3-61(d), it
has a lien upon any money or property recovered in this action. In accordance with
Section 34-3-61(b), ‘no person shall be at liberty to satisfy the action or judgment,
until the lien or claim of the attorney . . . is fully satisfied.’” (Park Tower, Doc.
292; Baswell-Guthrie, Doc. 177).
But under Alabama law, LBN’s attorneys’ fee liens attached only to
property recovered in the Park Tower and Baswell-Guthrie cases and did not
establish a cause of action against Plaintiffs personally. See Ala. Code § 34-361(c); Boykin Timber & Farm Res., Inc. v. Nix, 438 So. 2d 294, 296 (Ala. 1983).
And Plaintiffs offer no authority for the proposition that a stand-alone legal
malpractice action is a counterclaim to an attorney’s security interest on settlement
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proceeds recovered in a separate lawsuit. Despite Plaintiffs’ attempt to reclassify
their claims, Plaintiffs’ overbilling claims are stand-alone malpractice claims
subject to the malpractice statute of limitations.
The court must next determine when the clock started to run for Plaintiffs’
overbilling claims. Assuming that LBN overbilled Plaintiffs, the overbilling
occurred each time LBN issued an inflated invoice. If LBN issued inflated
invoices, then Plaintiffs suffered injury and a cause of action accrued with each
invoice, because with each invoice Plaintiffs had to pay allegedly unreasonable
fees. The “occurrence” and the “injury” happened simultaneously, and so the
occurrence rule and the injury rule will produce the same result.
But Plaintiffs suggest that they discovered overbilling in invoices at some
point after LBN issued the invoices and so the two-year limitations period should
not begin to run until that discovery. (See Doc. 123-1 at 3, 5, 37-38). The times
when Plaintiffs discovered overbilling and the times when Plaintiffs should have
discovered overbilling can affect the timeliness of their claims, and so the court
will describe which circumstances give rise to a timely overbilling claim.
Regardless of when Plaintiffs discovered any overbilling, because of the
ALSLA’s absolute four-year bar, Plaintiffs may not bring claims for overbilling in
invoices issued more than four years before January 29, 2013. And also regardless
of when Plaintiffs discovered any overbilling, Plaintiffs may bring claims for
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overbilling in invoices issued within the ALSLA’s standard two-year limitations
period before January 29, 2013. So invoices issued before January 29, 2009 are
untimely, while invoices issued after January 29, 2011 are timely. The trouble lies
with invoices issued between January 30, 2009 and January 28, 2011.
The ALSLA’s six-month savings period and evidence of when Plaintiffs
discovered and should have discovered overbilling comes into play for invoices
issued between January 30, 2009 and January 28, 2011. For these invoices, if
Plaintiffs discovered the overbilling within two years of the invoice date, and
Plaintiffs could not have reasonably discovered the overbilling at an earlier time,
then the two-year limitations period was tolled until discovery and Plaintiffs could
bring suit within two years of discovery. If Plaintiffs discovered the overbilling
more than two years after the invoice date, and Plaintiffs could not have reasonably
discovered the overbilling at an earlier time, then Plaintiffs could bring claims for
overbilling within six months. In no circumstance may Plaintiffs bring an
overbilling claim more than four years after the invoice date or more than two
years after they discovered or should have discovered overbilling in an invoice.
This framework demonstrates that the timeliness of Plaintiffs’ overbilling
claims for invoices issued between January 30, 2009 and January 28, 2011depends
on when Plaintiffs discovered each instance of supposed overbilling, and so the
court will deny LBN’s motions for partial summary judgment on Plaintiffs’ claims
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of overbilling in invoices issued between January 30, 2009 and January 28, 2011.
3.

Negligent Drafting of the Settlement Agreement

The statute of limitations applies straightforwardly to Plaintiffs’ negligent
drafting claim. Plaintiffs allege that LBN negligently failed to include a provision
holding the McDermott defendants personally liable for Park Tower’s obligations
in the pro tanto settlement agreement executed on July 13, 2010 in the Park Tower
case. Therefore, LBN’s “act or omission or failure” for ALSLA purposes occurred
on July 13, 2010. Plaintiffs suffered injury the same day, because at that point they
acquired title to property encumbered by several unwanted obligations. Again, the
“occurrence” and the “injury” happened simultaneously and so the occurrence rule
and the injury rule will produce the same result.
Plaintiffs signed the settlement agreement on July 13, 2010. Plaintiffs
should have discovered on that day or shortly thereafter that the retained liability
provision was missing. Plaintiffs offered no evidence showing that they somehow
could not discover the deficiency until some later time. Plaintiffs brought suit
more than two years later on January 29, 2013 and so the statute of limitations bars
their negligent drafting claim. Again, the court assumes the Complaint states such
a claim.
C.

Equitable Tolling

Plaintiffs argue finally that genuine issues of material fact exist as to
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whether equitable tolling preserves their claims. (Doc. 123 at ¶ 4; Doc. 123-1 at 56, 20, 36-38). Plaintiffs’ evidence offered to show equitable tolling relates
primarily to Plaintiffs’ claim that LBN failed to timely supplement Plaintiffs’ Rule
26 damages disclosures. (See Doc. 124-3 at ¶¶ 7, 9; Doc. 124-6). The court has
already found that Plaintiffs timely brought that claim within two years of
discovery, so Plaintiffs do not need to rely on equitable tolling for that claim.
Plaintiffs then cite to John Donahue’s deposition as evidence to support their
claim of equitable tolling of the overbilling claims, even those invoices issued
more than four years before this lawsuit. (Doc. 123-1 at 6; Doc. 138 at 14). Mr.
Donahue testified that Mr. Bulso told him that LBN would no longer represent
Plaintiffs and that LBN agreed to continue representing Plaintiffs only after
Plaintiffs paid substantially more money. (Doc. 124-1 at 2-5). According to
Plaintiffs, Mr. Donahue’s deposition “establish[es] that Bulso represented to
Plaintiffs in February 2011 that he would see their cases through trial if Plaintiffs
paid $200,000 towards the deferred fees (fees exceeding the mere $50,000 per
month Bulso agreed to accept).” (Doc. 138 at 14). Mr. Donahue’s testimony may
concern the reasonableness of LBN’s fees, but it does not suggest any
circumstances that would have prevented Plaintiffs from discovering overbilling.
Therefore, Mr. Donahue’s testimony has no bearing on the timeliness of Plaintiffs’
overbilling claims.
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And finally, as to Plaintiffs’ negligent drafting claim, Plaintiffs cite only an
excerpt of Steven Nieter’s deposition as evidence to support equitable tolling.
(Doc. 123-1 at 20). At his deposition, Mr. Nieter testified that he did not know
why Mr. Bulso did not include a provision holding the McDermott defendants
personally liable for Park Tower’s obligations in the settlement agreement with the
McDermott defendants in the Park Tower case. (Doc. 124-2 at 2-4). This
testimony falls short of showing relation to any circumstances that would have
tolled the statute of limitations. Thus, Plaintiffs fail to establish any basis for
equitable tolling and the statute of limitations bars the claims involving the
settlement agreement.
IV.

CONCLUSION
By separate order, the court WILL DENY IN PART and WILL GRANT

IN PART LBN’s motions for partial summary judgment. The statute of
limitations does not bar Plaintiffs’ ALSLA claims involving LBN’s failure to
timely supplement Plaintiffs’ Rule 26 damages disclosures in the Park Tower case.
(2:14-cv-1953-KOB, Doc. 118 at 2; 2:14-cv-1954-KOB, Doc. 117 at 2; 2:14-cv1955-KOB, Doc. 116 at 2). The statute of limitations does not restrict Plaintiffs’
overbilling claims to invoices issued within the two years before January 29, 2013.
(2:14-cv-1953-KOB, Doc. 118 at 3; 2:14-cv-1954-KOB, Doc. 117 at 2, Doc. 120
at 2; 2:14-cv-1955-KOB, Doc. 116 at 3). Depending on when Plaintiffs discovered
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and should have discovered overbilling, Plaintiffs may bring claims for overbilling
in invoices issued up to four years before this lawsuit. But the statute of
limitations bars Plaintiffs’ claims concerning the negligent drafting of the July 13,
2010 settlement agreement in the Park Tower case; the court will grant partial
summary judgment as to that claim. (2:14-cv-1953-KOB, Doc. 118 at 2; 2:14-cv1954-KOB, Doc. 117 at 2; 2:14-cv-1955-KOB, Doc. 116 at 2).
DONE and ORDERED this 27th day of September, 2018.

____________________________________
KARON OWEN BOWDRE
CHIEF UNITED STATES DISTRICT JUDGE

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