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Roach v. Caudle (3/13/98), 954 P 2d 1039
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Notice: This opinion is subject to formal correction before
publication in the Pacific Reporter. Readers are requested to bring errors to
the attention of the Clerk of the Appellate Courts, 303 K Street, Anchorage,
Alaska 99501, telephone (907) 264-0608, fax (907) 264-0878.
THE SUPREME COURT OF THE STATE OF ALASKA
HILLARD T. ROACH, )
) Supreme Court No. S-6984
Appellant, )
) Superior Court No.
v. ) 3AN-94-6152 CI
)
LARRY L. CAUDLE, ) O P I N I O N
)
Appellee. ) [No. 4954 - March 13, 1998]
______________________________)
Appeal from the Superior Court of the State of
Alaska, Third Judicial District, Anchorage,
Peter A. Michalski, Judge
Appearances: Edgar Paul Boyko and Robin L.
Koutchak, Edgar Paul Boyko and Associates, Anchorage, for
Appellant. Larry L. Caudle, pro se, Law Office of Larry L. Caudle,
Anchorage, Appellee.
Before: Compton, Chief Justice, Rabinowitz,
Matthews, Eastaugh, and Fabe, Justices.
FABE, Justice.
I. INTRODUCTION
Hillard Roach appeals the superior court's decision to
dismiss his legal malpractice suit for failure to comply with the
applicable statute of limitations. We reverse the superior court's
judgment and remand the case.
II. FACTS AND PROCEEDINGS
Roach hired attorney Larry Caudle to appeal a federal
bankruptcy court's decision. That appeal was dismissed on April
28, 1988, for failure to file a timely notice of appeal. On July
13, 1994, Roach sued Caudle in state court for legal malpractice.
In his complaint, Roach alleged that Caudle "never informed
plaintiff [Roach] that his appeal had been dismissed and plaintiff
did not discover that dismissal until July 15, 1992." Caudle moved
to dismiss Roach's malpractice action for failure to state a claim
under Alaska Civil Rule 12(b)(6), on the ground that the suit was
time-barred.
The superior court ruled that a six-year statute of
limitations applied and began to run on the date Roach's bankruptcy
appeal was dismissed. The superior court also concluded that the
discovery rule did not render Roach's complaint timely. Noting
that "Roach was aware of his cause of action by 15 July 1992,"the
superior court found that Roach had unreasonably delayed filing his
malpractice claim until July 1994. Therefore, it granted Caudle's
motion. This appeal followed.
III. DISCUSSION [Fn. 1]
A. A Six-Year Statute of Limitations Applies to Roach's
Legal Malpractice Claim.
Roach asserts that the superior court erred when it
applied a six-year statute of limitations to his case. We
disagree.
We recently stated that "[t]he six-year statute of
limitations generally applies to professional malpractice actions
claiming economic loss." Breck v. Moore, 910 P.2d 599, 603 (Alaska
1996) (citing Lee Houston & Assocs. v. Racine, 806 P.2d 848, 855
(Alaska 1991)). Roach's complaint principally alleged economic
loss, stating:
As a result of defendant Larry L. Caudle's
breach of his duty of due care to plaintiff, plaintiff has been
damaged, which damage includes, but is not limited to, his
inability to retain any interest in, or pursue litigation based
upon, a promissory note from Minnesota Construction Company and
others in his favor in the principle [sic] amount of $459,000 and
the related deed of trust, all to plaintiff's damage in an amount
in excess of $50,000, the exact amount to be proven at time of
trial.
Therefore, the six-year limitations period applies.
B. The Superior Court Erred in Dismissing Roach's Complaint
Based upon the Statute of Limitations.
Roach argues that the superior court should have denied
Caudle's Rule 12(b)(6) motion because the statute of limitations
did not begin running until July 15, 1992. Thus, Roach alleges
that his July 13, 1994 complaint was timely.
We have recognized that in considering a Rule 12(b)(6)
motion, the trial court should focus on whether the complaint sets
forth "allegations of fact consistent with and appropriate to some
enforceable cause of action." Linck v. Barokas & Martin, 667 P.2d
171, 173 (Alaska 1983). The court "must presume all factual
allegations of the complaint to be true"and should deny the motion
to dismiss if "within the framework of the complaint, evidence may
be introduced which will sustain a grant of relief to the
plaintiff." Kollodge v. State, 757 P.2d 1024, 1026 (Alaska 1988)
(quoting 2A James Wm. Moore et al., Moore's Federal Practice 
12.07 (2d ed. 1986); see also Linck, 667 P.2d at 173).
We have determined that the statute of limitations does
not begin to run until a cause of action accrues. See Cameron v.
State, 822 P.2d 1362, 1366 (Alaska 1991). Under the discovery
rule, a cause of action accrues "when a person discovers, or
reasonably should have discovered, the existence of all elements
essential to the cause of action." Id. In his complaint, Roach
alleged that "Caudle never informed [him] that his [bankruptcy]
appeal had been dismissed and [Roach] did not discover that
dismissal until July 15, 1992." Because we must presume the
assertions in Roach's complaint to be true for purposes of
examining Caudle's Rule 12(b)(6) motion, we conclude that the six-
year statute of limitations did not begin running until Roach
allegedly discovered his potential cause of action on July 15,
1992. Because Roach filed his complaint within six years after
this date, the superior court should not have dismissed his lawsuit
based upon the statute of limitations. [Fn. 2]
IV. CONCLUSION
Assuming the validity of the allegations in Roach's
complaint, we conclude that the statute of limitations applicable
to Roach's legal malpractice claim did not expire before he filed
his July 13, 1994, complaint. Therefore, we REVERSE the superior
court's decision to dismiss Roach's complaint and REMAND for
further proceedings consistent with this opinion.
FOOTNOTES
Footnote 1:
This court reviews de novo a trial court's decision to dismiss
a case under Rule 12(b)(6). See Kollodge v. State, 757 P.2d 1024,
1026 n.4 (Alaska 1988).
Footnote 2:
The superior court rejected Roach's argument that his
complaint was timely by citing Cameron v. State, 822 P.2d 1362
(Alaska 1991), and finding:
Where an injured person discovers the elements
of a cause of action after it accrues, the question becomes whether
the person had a reasonable period of time to investigate and file
the cause of action prior to the expiration of the statute of
limitations.
In the present case, Roach was aware of his
cause of action by 15 July 1992. . . . Thus, he had over one year
and nine months to investigate and file the action before the
statute of limitations expired. Mr. Roach chose not to initiate a
timely action.
(Citation omitted.)
This application of Cameron is flawed. To conclude that
the six-year statute of limitations would expire one year and nine
months from July 15, 1992, the superior court must have assumed
that the statute of limitations began running on April 28, 1988,
the date Roach's bankruptcy appeal was dismissed. However, Cameron
states that "[t]he statute of limitations does not begin to run
until the claimant discovers, or reasonably should have discovered,
the existence of all elements essential to the cause of action."
Cameron, 822 P.2d at 1365 (quoting Mine Safety Appliances Co. v.
Stiles, 756 P.2d 288, 291 (Alaska 1988)). The second part of this
rule, which concerns when a person reasonably should have
discovered the existence of all elements of the cause of action,
requires further explanation. As we noted in Cameron, "a person
reasonably should know of his cause of action when he has
sufficient information to prompt an inquiry into the cause of
action, if all of the essential elements of the cause of action may
reasonably be discovered within the statutory period at a point
when a reasonable time remains within which to file suit." Id.
This explanation thus applies to inquiry notice cases where actual
discovery of the elements of the cause of action comes later than
the date of inquiry notice. The present case is, however, not such
a case as actual discovery of all of the elements of the cause of
action and inquiry notice were contemporaneous. As indicated
above, we assume for purposes of Rule 12(b)(6) that Roach's
complaint accurately states that he did not discover the essential
elements of his cause of action until July 15, 1992.
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