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Kim v. Dickinson Wright, PLLC

Supreme Court of Nevada

June 13, 2019

TAE-SI KIM, AN INDIVIDUAL; AND JIN-SUNG HONG, AN INDIVIDUAL, Appellants,
v.
DICKINSON WRIGHT, PLLC, A NEVADA PROFESSIONAL LIMITED LIABILITY COMPANY; JODI DONETTA LOWRY, ESQ., AN INDIVIDUAL; JONATHAN M.A. SALLS, ESQ., AN INDIVIDUAL; ERIC DOBBERSTEIN, ESQ., AN INDIVIDUAL; AND MICHAEL G. VARTANIAN, ESQ., AN INDIVIDUAL; Respondents.

          Appeal from a district court order granting a motion to dismiss in a legal malpractice action. Eighth Judicial District Court, Clark County; James Crockett, Judge.

          Brandon L. Phillips, Attorney at Law, PLLC, and Brandon L. Phillips, Las Vegas, for Appellants.

          Morris Law Group and Steve L. Morris and Ryan M. Lower, Las Vegas, for Respondents.

         BEFORE THE COURT EN BANC. [1]

          OPINION

          SILVER, J.

         This case allows us to clarify the interplay between Nevada's litigation malpractice tolling rule and 28 U.S.C. § 1367(d) (2012), a federal tolling statute, on a legal malpractice claim. We first address the application of § 1367(d), which tolls the statute of limitations for a state-law claim joined with a federal claim under supplemental jurisdiction while the state-law claim is pending in federal court, and for at least 30 days after the state-law claim's dismissal from federal court. We clarify that § 1367(d) distinguishes between an "action" and a "claim," and thus, the state-law claim's dismissal is sufficient to end the federal tolling period. Finally, we reaffirm our prior holdings that the litigation malpractice tolling rule[2] does not apply to non-adversarial proceedings.

         Because 28 U.S.C. § 1367(d) tolled claims brought by appellants Tae-Si Kim and Jin-Sung Hong (collectively, Kim) only until the claims were dismissed, we hold that the district court erred by finding that Kim's claims against Charles M. Damus, Esq., were tolled until the remaining claims in the federal action were also dismissed. Furthermore, because the litigation malpractice tolling rule does not apply to the claims against Damus, Kim's claims against Damus potentially became barred by the statute of limitations during respondents' representation of Kim. Since the litigation malpractice tolling rule does apply to the claims against respondents, we further hold that the district court erred by finding that Kim's claims against respondents were timed-barred by Nevada's statute of limitations for legal malpractice claims.

         FACTS AND PROCEDURAL HISTORY

         Kim hired Damus to handle a real property dispute in December 2008. Damus failed to file a complaint to protect Kim's interest in the property, and the property was foreclosed on. Kim fired Damus in September 2009. One month prior to firing Damus, Kim hired the law firm of Gibson Lowry Burris LLP (the Gibson firm) to also pursue claims related to the property dispute. Under the Gibson firm's representation, Kim filed a complaint regarding the property in Nevada's federal district court. Kim later amended the complaint on March 2, 2010, to include claims against Damus for legal malpractice, negligent undertaking to perform services, and unjust enrichment for his failure to file a complaint stopping the foreclosure of the property. During this time, respondent Dickinson Wright, PLLC, absorbed the Gibson firm. Damus filed a motion to dismiss the claims against him for lack of subject matter jurisdiction, which the federal court granted on December 6, 2010.

         Kim entered into an amended and restated legal services agreement with Dickinson Wright, during which time Kim's federal action was still ongoing. More than three years later, Kim emailed a Dickinson Wright attorney asking whether the Gibson firm had previously filed Kim's malpractice claims against Damus in state court. The attorney responded that the Gibson firm had not filed a state action against Damus, that Dickinson Wright would not do so because it was terminating its representation of Rim, and that Kim should contact other counsel if they wished to pursue such claims. The federal district court dismissed the remaining federal claims with prejudice on September 4, 2015.

         Kim filed a malpractice complaint in state court against Dickinson Wright on June 12, 2017. Kim argued that Dickinson Wright failed to sue Damus in state court and thereafter allowed the statute of limitations on those claims to run. Kim argued that 28 U.S.C. § 1367(d) only tolled the claims against Damus until the federal court dismissed the claims and, therefore, the statute ran during the firm's representation. Kim also argued that Nevada's litigation malpractice tolling rule did not apply to the claims against Damus, such that those claims are now barred, but it did apply to toll the claim against Dickinson Wright during the federal litigation, and therefore, the claim against Dickinson Wright was not time-barred. Conversely, Dickinson Wright argued that § 1367(d) and Nevada's litigation malpractice tolling rule tolled Kim's claims against Damus until the federal action ended and, therefore, Kim had plenty of time to sue the attorney but let the statute of limitations run. Further, Dickinson Wright argued that Kim's malpractice claim against it was time-barred.

         The district court granted the motion to dismiss, finding that (1) 28 U.S.C § 1367(d) tolled the statute of limitations on any state action against Damus until September 4, 2015, when the federal action was dismissed, so Kim could have brought suit then as advised by Dickinson Wright;[3] (2) under Nevada's litigation malpractice tolling rule, Kim's legal malpractice claim against Damus did not accrue until the end of the federal action when damages were certain; and (3) Kim's claim against Dickinson Wright was time-barred under NRS 11.207.[4] Kim appealed.

         DISCUSSION

         We rigorously review an order granting an NRCP 12(b)(5) motion to dismiss, recognizing all factual allegations in the complaint as true and drawing all inferences in the plaintiffs' favor, and reviewing all legal conclusions de novo. Buzz Stew, LLC v. City of N. Las Vegas, 124 Nev. 224, 227-28, 181 P.3d 670, 672 (2008). "A complaint should only be dismissed for failure to state a claim if it appears beyond a doubt that it could prove no set of facts, which, if true, would entitle it to relief." ...


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