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Diamond v. Wagstaff (5/13/94), 873 P 2d 1286
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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.
THE SUPREME COURT OF THE STATE OF ALASKA
DAVID DIAMOND, )
) Supreme Court No. S-5492
Appellant, )
) Superior Court No.
v. ) 3AN-89-6884 CI
)
ROBERT WAGSTAFF, ) O P I N I O N
)
Appellee. ) [No. 4082 - May 13, 1994]
______________________________)
Appeal from the Superior Court of the
State of Alaska, Third Judicial District,
Anchorage,
Dana A. Fabe, Judge.
Appearances: Michael W. Flanigan,
Walther & Flanigan, Anchorage, for Appellant.
Peter J. Maassen, Burr, Pease & Kurtz,
Anchorage, for Appellee.
Before: Moore, Chief Justice,
Rabinowitz, Matthews, Compton, Justices and
Bryner, Justice pro tem.*
RABINOWITZ, Justice.
I. INTRODUCTION
David Diamond wished to file a third-party claim for a
back injury that was covered under Alaska's workers' compensation
act. Diamond brought suit for legal malpractice based upon his
contention that attorney Robert Wagstaff incorrectly advised him
that permanent injury was a prerequisite to the filing of such a
claim, and that Wagstaff did not advise him of the applicable
statute of limitations. At trial, the jury found Wagstaff
negligent but awarded Diamond no damages. In this appeal,
Diamond challenges inter alia the superior court's denial of his
motions for partial summary judgment, judgment n.o.v., and a new
trial.
II. FACTS AND PROCEEDINGS
On October 25, 1983, in the course of his employment as
a driller's helper with Interstate Exploration, Diamond suffered
an injury to his lower back when a twenty-foot length of drill
pipe, vertically suspended from a mobile drilling rig, fell off a
hook and toppled onto him. He subsequently filed a workers'
compensation claim for his injury, retaining attorney Chancy
Croft to handle the matter.
Dissatisfied with the size of his workers' compensation
award, Diamond met with Wagstaff in late August 1984. Diamond
asked Wagstaff about filing a third-party claim against Alyeska
Pipeline Co. (Alyeska), the company that had hired Interstate
Exploration as an independent contractor for the drilling
project. During September 1984, Diamond and Wagstaff were in
contact a number of times.1
The substance of Wagstaff's advice to Diamond is a
matter of considerable dispute. Diamond thought that a third-
party action might give him leverage against the workers'
compensation carrier and cause the carrier to make higher
compensation payments. Wagstaff was skeptical, and advised him
to establish whether he, Diamond, had suffered a permanent
injury. Although both sides agree that Wagstaff expected Diamond
to release and gather medical records, they disagree about the
importance Wagstaff placed on whether there was a "permanent
injury." Wagstaff recalls his advice to have been that Diamond
should have a permanent injury in order to justify the expense
and work of bringing suit against Alyeska. According to
Wagstaff, Diamond knew that he could file the suit himself,
whatever its merits. Diamond, in contrast, contends that
Wagstaff characterized "permanent injury" as an absolute
prerequisite for commencing a third-party action.
In addition, the parties differ about whether Wagstaff
advised Diamond at their initial meeting as to the applicable
statute of limitations for any third-party claim. Wagstaff was
absolutely sure that he had discussed the statute of limitations
with Diamond:
[The statute of limitations is] a
subject that I--I bring up with everyone.
More than bring up, it's discussed fully
until I'm satisfied that the person
understands this. . . . And there was no
question that [Diamond] fully understood and
knew fully that there was a two year statute
of limitations on this claim.
. . . .
. . . I brought the subject up. I
said, Dave, we've got to talk about the
statute of limitations, the two year statute
of limitations on this. And we have to bring
the claim within two years or it's forever
lost. And that's very important that you
understand that. And he said, yes, I
understand that. I know that.
According to Wagstaff, this meeting was the only time that he and
Diamond discussed the statute of limitations. Diamond, on the
other hand, contends that they never discussed the statute of
limitations, and that he was unaware that a limitations period
existed.
At Wagstaff's request, Diamond agreed to release his
medical records, and Wagstaff subsequently received and examined
at least one of them. Wagstaff did not, however, undertake any
further investigation into Diamond's claim.
Between September 1984 and May 1985, Diamond and
Wagstaff had no contact with each other. During this time,
Diamond travelled to San Francisco and Seattle to consult
additional physicians concerning his injury. In February 1985,
he wrote Croft, his workers' compensation attorney, from
California and asked about the continued viability of a claim
against Alyeska:
I left Anchorage without seeing Bob
Wagstaff and would like to reach him. I am
unclear on the viability of a suit in this
sort of case if no court action is taken
within a year of the injury.
Diamond admitted at trial that when he wrote Croft this letter,
he was concerned about whether he would be barred from suing if
he did not file his action within a year of his injury. Croft's
response to the letter did not include an answer to this
question.
On May 9, 1985, Diamond wrote Wagstaff a letter, in
which he inquired about the continued viability of a third-party
claim:
Whenever I sit down to write you,
to ask if we may proceed against Alyeska
Pipeline, I remember your words: "is the
damage permanent?" It seemed odd to me then
that permanent damage was the only litigable
damage, and it is part of my continuing
frustration with this injury that both
justice and healing remain remote, elusive
goals.
My back and legs are no better than
when I saw you last. I left Anchorage to
find a doctor who might be more imaginitive,
[sic] inquiring and resourceful . . . .
Lumbar spinal fusion surgery is likely . . .
.
Two questions for you:
1.) Would you consider handling the
Workers Comp. end of this. Actually, there's
nothing to do but receive checks every other
week . . . .
2.) When and how will the
permanence of this injury be established
sufficient to take action against Alyeska?
Wagstaff responded to Diamond's letter on May 17:
Thanks for your letter of May 9.
I'm sorry to hear that you are still having
problems. I do not handle Worker's
Compensation matters myself. An attorney who
does is named William Erwin, . . . and you
may want to contact him.
Unfortunately, I am not really in a
position to take on any new work now of the
contingent fee variety as I've got more than
I can handle. What I suggest is that you
contact Irwin [sic], or if he is
unacceptable, I can come up with another
Worker's Compensation attorney, and discuss
your potential third party claim with him.
I'm sorry I can't be of more help at this
time.
Between the time that he received Wagstaff's response
and the time that the statute of limitations ran for a third-
party claim against Alyeska--a period of approximately five
months--Diamond neither contacted Wagstaff nor consulted another
attorney about his potential third-party claim. Diamond
underwent back surgery in August 1986. In the spring of 1987,
while consulting another attorney about his workers' compensation
case, Diamond purportedly learned for the first time that the
statute of limitations had run on any third-party claim. In
August 1989, Diamond filed a complaint against Wagstaff for legal
malpractice.
In June 1992, Diamond filed a motion for partial
summary judgment, contending that as a matter of law Wagstaff was
liable for failing to include in his response to Diamond's May
1985 letter advice on the statute of limitations applicable to
Diamond's potential cause of action against Alyeska. The
superior court denied this motion and the case proceeded to
trial.
The jury, in a special verdict, found Wagstaff
negligent, but determined that his negligence was not a legal
cause of Diamond's failure to file a timely suit against Alyeska.
The superior court thereafter entered a judgment in Wagstaff's
favor. Diamond then moved for a judgment n.o.v., or
alternatively for a new trial. The superior court denied the
motion, concluding that the evidence allowed "a reasonable jury
to find that the failure to give written notice of the statute of
limitations was not the cause of plaintiff's failure to timely
file the lawsuit, given the testimony that he knew of the two
year statute of limitations." Diamond now brings this appeal.
III. DISCUSSION
A. Diamond's Motion for Partial Summary Judgment
Diamond contends that the superior court erred in
denying his motion for partial summary judgment as to Wagstaff's
liability for legal malpractice. According to Diamond,
Wagstaff's only reasonable response to his letter of May 9 would
have been to notify him that evidence of a permanent injury was
unnecessary in order to file a third-party claim against Alyeska
and that Diamond would have had to bring such a claim within two
years of his accident. Wagstaff responds that denial of the
summary judgment motion is appropriate if one construes Diamond's
letter and Wagstaff's response in the context of the other facts
appearing in the record.
Relying on two recent cases, Doe v. Hughes, Thorsness,
Gantz, Powell & Brundin, 838 P.2d 804 (Alaska 1992), and Drake v.
Wickwire, 795 P.2d 195 (Alaska 1990), Diamond contends that this
court will uphold summary judgment if it finds certain attorney
conduct to be negligent as a matter of law. Yet the parties in
Hughes, Thorsness did not dispute the facts. The issue on appeal
was whether a law firm's tactical decision in an adoption
proceeding constituted negligence as a matter of law or merely an
error in judgment. See 838 P.2d at 805-07. Drake involved an
unusual situation in which this court took judicial notice of the
facts as recited in the defendant attorney's brief in an earlier
appeal to this court. 795 P.2d at 197 n.1. Thus, the facts in
Drake also were "undisputed."
Neither of these cases is applicable here. When
reviewing a grant or denial of summary judgment, this court
determines whether a genuine issue of material fact exists and
whether the moving party is entitled to judgment as a matter of
law. Saddler v. Alaska Marine Lines, Inc., 856 P.2d 784, 787
(Alaska 1993). In his opposition to summary judgment, which
relied on his own deposition testimony and the affidavit of an
expert witness, Wagstaff raised genuine issues of material fact
as to whether he properly informed Diamond as to the applicable
statute of limitations and whether he had advised that Diamond
could not file suit until his injury was found to be permanent.
Diamond attempts to distinguish Wagstaff's showing by
contending that communications between them prior to the May 1985
exchange of letters are not relevant to resolution of the summary
judgment issues. Essentially, Diamond contends that Wagstaff had
a duty, as a matter of law, to remind him of the statute of
limitations, and that there is no genuine issue of material fact
as to whether he did so.
The superior court correctly rejected this argument,
concluding that Diamond's letter should be construed not in a
"vacuum," but rather "in context of what else was told at what
point, with what degree of detail and what the client's response
and . . . understanding of those points was." Whether Wagstaff
breached a duty depended upon whether Diamond understood that the
statute of limitations applied to his claim. The language of
Diamond's May 1985 letter does not clearly communicate a
misunderstanding on Diamond's part as to the statute of
limitations. When construed in the light most favorable to
Wagstaff, the facts indicate that Wagstaff apprised Diamond of
the applicable statute of limitations, that Diamond understood
the applicable statute of limitations, and that Wagstaff
construed the letter in the context of his previous contacts with
Diamond, reading the letter to relate to whether Diamond should
pursue a claim. Furthermore, the parties presented affidavits of
experts, the opinions of which conflicted on the appropriateness
of Wagstaff's response. Therefore, there was a genuine issue of
material fact on this point, and the superior court correctly
denied Diamond's motion for partial summary judgment.
B. Diamond's Motion for Judgment N.O.V. or a New Trial
Diamond contends that the superior court erred in
denying his motion for a judgment n.o.v. or a new trial. He
claims that Wagstaff's theories explaining the jury's decision on
causation were based on mere "hypothetical possibilities," and
that under this court's holding in Korean Air Lines Co. v. State,
779 P.2d 333 (Alaska 1989), the jury could not reasonably rely
upon them.
When reviewing a motion for a judgment n.o.v., we
determine whether evidence, when viewed in the light most
favorable to the non-movant, is such that reasonable persons
could not differ in their judgment. Korean Air Lines, 779 P.2d
at 338. We neither weigh the evidence nor judge the credibility
of witnesses. Rather, we employ an objective test: If there is
room for diversity of opinion among reasonable people, then a
jury question exists. Id.
We review the superior court's denial of a motion for a
new trial for an abuse of discretion. See Lamer v. McKee Indus.,
Inc., 721 P.2d 611, 613 (Alaska 1986). An abuse of discretion
occurs only if the evidence supporting the jury's verdict was
either completely lacking or slight and unconvincing, so that the
verdict was manifestly unreasonable and unjust. Again, we draw
all inferences from the facts in the light most favorable to the
non-movant. Id.
When reviewing a jury verdict under these standards,
this court necessarily considers hypothetical explanations for
the jury's determination. Otherwise, we would not be able to
review verdicts at all. Contrary to Diamond's contention, Korean
Air Lines did not bar reliance on hypothetical possibilities; it
simply concluded that particular hypothetical possibilities were
not ones on which reasonable jurors could rely. See 779 P.2d at
339.
Here, reasonable jurors could have disagreed as to
whether Wagstaff's negligence caused Diamond's delay in filing
suit. Wagstaff presented evidence that Diamond knew and
understood the statute of limitations. For example, the jury
could have relied on Wagstaff's testimony that he advised Diamond
concerning the applicable statute of limitations during his
initial meeting with him, and that Diamond was knowledgeable
enough about the law to understand its meaning. In addition, the
jury could have relied on Diamond's February 1985 letter to
Croft, in which Diamond expressed concern over the amount of time
remaining to sue, as an indication that Diamond knew about the
statute of limitations for third-party claims.
As Wagstaff correctly notes, given the evidence
presented, a reasonable jury could have found negligence but not
causation. The jury could have found that Wagstaff negligently
omitted discussion of the statute of limitations in his May 1985
letter, but that Diamond was aware that any third-party claim was
subject to the statute of limitations, and that Diamond
nonetheless neither filed suit nor sought further advice. This
theory is particularly plausible given that Diamond's only
evidence pertaining to causation is his own testimony that as a
result of Wagstaff's May 1985 letter, he did not file a claim.
The jury reasonably could have accorded more weight to Wagstaff's
evidence challenging the credibility of such testimony.
Therefore, the superior court properly denied Diamond a
judgment n.o.v. In addition, evidence that Diamond knew of the
applicable statute of limitations was sufficient for the superior
court to deny Diamond a new trial on the issue of causation.2
IV. CONCLUSION
Genuine issues of fact existed as to whether Diamond
knew about the statute of limitations applicable to his third-
party claim. Therefore, the superior court properly denied
Diamond's motion for partial summary judgment. In addition, the
jury had sufficient evidence to reasonably return a special
verdict finding that Wagstaff was negligent but that his
negligence was not a legal cause of Diamond's failure to file a
timely third-party claim against Alyeska. Accordingly, the
superior court did not err in declining to grant Diamond a
judgment n.o.v. or a new trial.
AFFIRMED.
_______________________________
* Sitting by assignment made pursuant to article IV,
section 16 of the Alaska Constitution.
1 Diamond testified to at least one meeting with Wagstaff
in addition to the initial August consultation. Diamond's diary
lists four communications with Wagstaff's office during
September, though the diary does not indicate whether they were
in person or by telephone. Diamond testified that he saw
Wagstaff personally, though not necessarily by appointment, four
or five times. Wagstaff, for his part, recalled meeting
personally with Diamond only once, but acknowledged that there
may have been two meetings, and that Diamond may also have
telephoned him or may have come by the office and talked with
Wagstaff's secretary.
2 Before trial, Wagstaff filed several motions in limine.
Two sought a ruling that would require Diamond to prove his "case
within a case,"by showing that he had a viable claim against
Alyeska, before he could recover for Wagstaff's alleged
malpractice. The third sought preclusion of any evidence that
Diamond might present regarding the theoretical "settlement
value"of a potential claim against Alyeska. The superior court
granted these motions. On appeal, Diamond contends that the
superior court erred in granting Wagstaff's motions in limine.
Our disposition of this case makes discussion of these arguments
unnecessary.
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