               IN THE SUPREME COURT OF IOWA
                                 No. 13–1381

                            Filed February 13, 2015


AHMAD S. VOSSOUGHI and C, N, & A, INC.,

      Appellants,

vs.

JOSEPH A. POLASCHEK and MICHAEL J. MELOY,

      Appellees.


      Appeal from the Iowa District Court for Scott County, David H.

Sivright Jr., Judge.



      Plaintiffs appeal from an adverse summary judgment ruling

dismissing legal malpractice claims against two attorneys. REVERSED

AND REMANDED.



      Steven E. Ballard and Michael J. Harris of Leff Law Firm, L.L.P,

Iowa City, for appellant.


      Robert V.P. Waterman Jr. and Joshua J. McIntyre of Lane &

Waterman, LLP, Davenport, for appellee Polaschek.

      John T. Flynn of Brubaker, Flynn & Darland, P.C., Davenport, for

appellee Meloy.
                                   2

HECHT, Justice.

      Vossoughi and a company owned by him brought this legal

malpractice action against attorneys who prepared documents in

connection with the sale of real and personal property.       Vossoughi

appeals from a district court ruling granting summary judgment to both

attorneys. Because we conclude the summary judgment should not have

been granted in favor of either attorney, we reverse and remand for

further proceedings.

      I. Factual Background and Proceedings.

      A reasonable fact finder viewing the evidence in the light most

favorable to Vossoughi and C, N, & A, Inc. could find the following facts

from the summary judgment record.       Ahmad Vossoughi was the sole

owner of C, N, & A, Inc.   The company owned and operated Cigarette

Oasis, LLC (Oasis). Oasis was located on real estate Vossoughi owned in

Davenport, Iowa.   In September 2006, Vossoughi and C, N, & A, Inc.

entered into a set of agreements with Mark Polaschek (Mark), who

managed BVM Enterprises LLC (BVM) and PPM Properties, Inc. (PPM).

The contracting parties were represented by counsel; Vossoughi and

C, N, & A, Inc. were represented by Michael J. Meloy, and Mark was

represented by his brother Joseph Polaschek (Polaschek).

      After five or six hours of negotiations, the parties executed three

separate agreements on September 15, 2006: (1) an “Asset and Business

Name Purchase Agreement,” setting out that BVM would pay C, N, & A,

Inc. the sum of $261,281.98 to acquire Oasis; (2) a “Noncompetition

Agreement,” requiring PPM to pay Vossoughi an additional $70,000; and
                                             3

(3) a “Real Estate Contract,” setting out that PPM would pay Vossoughi

$40,000 for the real property. 1

      An “Addendum to the Real Estate Contract” contained language

purporting to cross-collateralize the three agreements.              Paragraph 3 of

the addendum provided that any default under the Noncompetition

Agreement or Asset and Business Name Purchase Agreement would also

constitute default under the Real Estate Contract. Paragraph 5 of the

addendum authorized PPM to prepay the balance due on the Real Estate

Contract without penalty, but provided that the payment obligations

under the other two agreements would remain secured by the real

property until fully paid. 2 Paragraph 6 of the addendum included the

following language addressing the consequences of prepaying the real

estate purchase price:

      If Buyer elects to prepay under the terms of this real estate
      purchase contract, Seller shall convey the real property to
      Buyer subject to the full payment of said contract and
      expressly subject in the warranty deed for said conveyance
      stating that the Buyer is restricted and can sell said real
      estate only upon the full payment and completion of the
      terms of the Non-compete Agreement and the Asset Purchase
      Agreement.

             If the Buyer is unable to re-convey the real property in
      the event of default by Buyer of either the Non-competition
      Contract or the Asset Purchase Agreement, then the Buyer
      and Seller agree that the value of damages would be difficult
      if not impossible to calculate at this time and as such, the
      Buyer shall be obligated to pay to Seller as liquidated


      1The  contract called for a $10,000 down payment. The $30,000 balance was to
be paid in monthly installments over the next twenty years.
      2Paragraph   5 read, in part, as follows:
      In the event that the Buyer sells, assigns or pays off this contract before
      the due date, Buyer shall remain responsible to re-convey the real
      property in the event there is any default on either the Non Competition
      Contract or on the Asset and Business Name Purchase Agreement.
                                    4
      damages on the failure of the Buyer to re-convey the “market
      value” on the real property with any improvements.

Vossoughi believed the payments due on all three of the agreements were
secured by a lien on the real property created by language in the

addendum. However, the agreements and addendum did not provide for

perfection of a security interest securing the sellers’ interests in the

personal property, nor did they provide for a mortgage against the real

estate securing the contractual right to receive payments under two of

the agreements in the event PPM exercised its right to prepay the

purchase price on the real estate contract.

      The buyers took possession of Oasis and the real property, and

began making installment payments to Vossoughi. Six months later, in

March 2007, Mark contacted Meloy, stating he wanted to pay in full the

balance owed on the real estate contract.     On March 28, 2007, Meloy

contacted Vossoughi and informed him of Mark’s offer to prepay the real

estate contract obligation. When told there would be a fee for Meloy’s

legal services in connection with the closing of the real estate

transaction, Vossoughi terminated the attorney–client relationship.

Meloy did no further work for Vossoughi or C, N, & A, Inc.

      Vossoughi appeared the very next day at Polaschek’s office and

executed a warranty deed transferring title to the real estate to PPM.

Polaschek had prepared the deed, and he charged Vossoughi $500 for

his legal services.   Vossoughi told Polaschek he was concerned the

warranty deed contained no reference to the cross-collateralizing

language of the addendum and no mention of the buyers’ remaining

payment obligations under the other two agreements. Polaschek assured

Vossoughi that after he signed the warranty deed, an additional page

incorporating the provisions of the addendum would be added to ensure
                                       5

the remaining payment obligations would remain secured by the real

property. Vossoughi signed the warranty deed, and despite Polaschek’s

promises, the deed was later recorded without any additional language

and   without    a   second    page    referencing    the   cross-collateralized

agreements.

      In February 2008, the buyers stopped making payments on the

two other contract obligations.       Vossoughi’s investigation revealed the

warranty deed he signed had been recorded on April 9, 2007, without the

additional page incorporating the provisions of the addendum.            Worse

yet, Vossoughi discovered Mark had borrowed $184,000 from American

Bank & Trust Company and secured the loan with a mortgage on the

Oasis real estate.

      Vossoughi and C, N, & A, Inc. filed a breach of contract action

against BVM, PPM, and Mark. The action produced no remedy for the

plaintiffs, however, because BVM had already been involuntarily

dissolved by the Illinois Secretary of State, and both PPM and Mark had

filed for bankruptcy under Chapter 7 of the Bankruptcy Code, 11 U.S.C.

§§ 701–84 (2006). American Bank & Trust foreclosed its mortgage.

      Vossoughi and C, N, & A, Inc. filed a petition in the bankruptcy

court seeking a determination that the contract obligations of PPM and

Mark arising from the Asset and Business Name Purchase Agreement

and   the     Noncompetition    Agreement      were     nondischargeable     in

bankruptcy. The bankruptcy court denied the requested relief, however,

because it found no evidence the debtors had committed any malicious

or fraudulent act within the meaning of 11 U.S.C. § 523(a)(2) or (6).

Accordingly, the bankruptcy court ruled the debts arising from the two

agreements were dischargeable.          See Vossoughi v. Polaschek (In re

Polaschek), No. 08–81311, 2012 WL 1569611, at *8 (Bankr. C.D. Ill. May
                                       6

3, 2012).    Vossoughi and C, N, & A, Inc. were left with $210,000 in

unsecured, nonpriority, fully dischargeable claims—and took nothing

from the bankruptcy.

      Vossoughi and C, N, & A, Inc. filed a petition alleging legal

malpractice claims against both Meloy and Polaschek on June 16, 2010.

The petition asserted the defendant attorneys were negligent in

connection with the preparation of the warranty deed and conveyance in

March 2007. After Meloy filed an affidavit disclaiming any involvement

in the March 2007 transaction, Vossoughi dismissed the action against

Meloy without prejudice on April 18, 2011.

      Vossoughi and C, N, & A, Inc. sued Meloy a second time, however,

on June 26, 2012.       In an amended petition filed in this action, the

plaintiffs   alleged   Meloy   negligently    performed    legal   services   in

negotiating, drafting, and providing legal advice in connection with the

three agreements executed in September 2006. 3 Each of the defendants

filed a motion for summary judgment.

      II. Summary Judgment on Claims Against Meloy.

      Meloy’s motion for summary judgment raised the statute of

limitations as an affirmative defense.        The district court found this
defense meritorious and granted summary judgment. The district court

noted the limitations period of five years for legal malpractice actions

does not begin to run until the plaintiff discovers the injury. See Iowa

Code § 614.1(4) (2005); Venard v. Winter, 524 N.W.2d 163, 166 (Iowa

1994); Franzen v. Deere & Co., 377 N.W.2d 660, 662 (Iowa 1985).

However, the district court held the plaintiffs were deemed to have

      3Because    Vossoughi filed the second petition against Meloy more than six
months after dismissing the first petition, the present claim is not considered a
continuation of the same action under Iowa Code section 614.10 (2005).
                                      7

discovered the injury on March 29, 2007, when Vossoughi signed the

warranty deed. The discovery occurred on that date, the district court

concluded, because Vossoughi’s signature on the deed imputes to him

knowledge of the deed’s contents. See Huber v. Hovey, 501 N.W.2d 53,

55 (Iowa 1993) (“[F]ailure to read a contract before signing it will not

invalidate the contract. Absent fraud or mistake, ignorance of a written

contract’s contents will not negate its effect.” (Citation omitted.)).

      The district court further held in the alternative that the plaintiffs

discovered the injury when the warranty deed was recorded on April 9,

2007. See Iowa Code § 558.55 (“[T]he filing and indexing [of deeds in the

recorder’s office] shall constitute constructive notice to all persons of the

rights of the grantees conferred by the instruments.”). Thus, the district

court concluded the limitations period for filing the instant claim against

Meloy expired on either March 29, 2012, or April 9, 2012, and granted

summary judgment to Meloy because the plaintiffs’ petition asserting the

instant claim against him was not filed until June 26, 2012.

      The plaintiffs filed a motion to amend the court’s ruling,

contending there was no injury as a result of Meloy’s actions in drafting

the original agreement until Mark and PPM stopped making payments in

February 2008. The motion asserted that although Meloy’s negligence

may have left the contract payment obligations unsecured as early as

September 2006, the failure to secure the sellers’ interests represented

only a prospect of future harm at that point, and a mere prospect of

harm could not have given rise to an actionable claim for legal

malpractice. The district court considered this argument, but rejected it:

      [T]he Iowa Supreme Court . . . has adopted the rule that the
      date of injury “coincides with the last possible date when the
      attorney’s negligence became irreversible.” Neylan v. Moser,
      400 N.W.2d 538, 542 (Iowa 1987). In Neylan, the Court was
                                      8
      distinguishing between the date of an adverse trial court
      verdict and the date of its final appeal, deciding the statute
      of limitations was tolled until the later date. Id. Applying
      this rule here, any negligence by Meloy became “irreversible”
      when the deed was signed and recorded. At that point,
      plaintiffs became insecure and had no remedy in the event
      the buyers defaulted. Thus, based on the holding in Neylan,
      the statute of limitations commenced to run in April 2007.

      III. Summary Judgment on Claims Against Polaschek.

      Polaschek’s motion for summary judgment asserted his acts and

omissions could not have been the cause of any damages. Even if it is

assumed he breached his duty by recording the warranty deed without

incorporating the restrictive terms of the addendum, Polaschek posited

the only consequence was the unavailability of the addendum’s

liquidated damages remedy. The bankruptcy discharges of the plaintiffs’

contract claims were, Polaschek contended, independently sufficient

causes of their inability to collect damages.

      The district court granted Polaschek’s motion, reasoning that a

judgment in favor of Vossoughi and C, N, & A, Inc. would not have been

collectible absent Polaschek’s alleged negligence. Because it determined

any   judgment    entered   against   Mark      or   PPM   would   have   been

uncollectible as a consequence of their bankruptcy discharges, the

district court concluded any breach of duty by Polaschek could not have

been a “but for” cause of the claimed damages.

      Vossoughi and C, N, & A, Inc. appealed, and we retained the

appeal.

      IV. Standard of Review.

      We review the district court’s summary judgment ruling to correct

errors at law. Boelman v. Grinnell Mut. Reins. Co., 826 N.W.2d 494, 500

(Iowa 2013); SDG Macerich Props., L.P. v. Stanek Inc., 648 N.W.2d 581,

584 (Iowa 2002). Summary judgment is appropriate when the moving
                                    9

party demonstrates that no genuine issue of material fact exists and that

the movant is entitled to judgment as a matter of law.      Boelman, 826

N.W.2d at 501; Murtha v. Cahalan, 745 N.W.2d 711, 713 (Iowa 2008).

We afford the nonmoving party “every legitimate inference that can be

reasonably deduced from the evidence”—and if the review of the evidence

pertaining to a particular issue shows “reasonable minds can differ on

how the issue should be resolved,” an order entering summary judgment

on that issue must be vacated or reversed.      Hills Bank & Trust Co. v.

Converse, 772 N.W.2d 764, 771 (Iowa 2009).

      V. Analysis.

      A. Claims Against Meloy.          We first turn to the question of

whether the district court correctly ruled the claims of Vossoughi and

C, N, & A, Inc. against Meloy are time-barred. To resolve this issue, we

must determine when the injuries claimed by Vossoughi and C, N, & A,

Inc. gave rise to a cause of action. If the cause of action accrued more

than five years before the plaintiffs filed their amended petition against

Meloy on June 26, 2012, we must then evaluate whether the discovery

rule extended the limitations period.

      1. Actual injury.   Legal malpractice claims sound in negligence.

Claims based on negligence do not accrue, and the statute of limitations

does not begin to run, until the injured plaintiff “has actual or imputed

knowledge of all the elements of the action.”    Franzen, 377 N.W.2d at

662; accord Buechel v. Five Star Quality Care, Inc., 745 N.W.2d 732, 736

(Iowa 2008); Stanley L. & Carolyn M. Watkins Trust v. Lacosta, 92 P.3d

620, 628 (Mont. 2004) (“[T]he statute of limitations in a legal malpractice

action does not begin to run until . . . all elements of the legal

malpractice claim, including damages, have occurred.”). To establish a

prima facie claim of legal malpractice, the plaintiff must produce
                                     10

evidence showing the attorney’s breach of duty caused “actual injury,

loss, or damage.”    Ruden v. Jenk, 543 N.W.2d 605, 610 (Iowa 1996).

Until the attorney’s act or omission that breached the applicable duty

“produces injury to claimant’s interest by way of loss or damage, no

cause of action accrues.” Wolfswinkel v. Gesink, 180 N.W.2d 452, 456

(Iowa 1970).   The injury must be concrete; “an essential element to a

legal malpractice cause of action is proof of actual loss rather than a

breach of a professional duty causing . . . speculative harm, or the threat

of future harm.” 7A C.J.S. Attorney & Client § 303, at 337 (2004). No

matter what the plaintiffs knew or when they knew it, the statute of

limitations could not have begun to run any earlier than the date an

actual injury occurred.

      The district court relied on Neylan in concluding the date of the

plaintiffs’ injuries was either March 29, 2007 (the date the deed was

executed), or April 9, 2007 (the date the deed was recorded), and in

concluding this action against Meloy was time-barred. The plaintiffs in

Neylan brought a legal malpractice action alleging their attorneys had

“negligently failed to present adequate evidence to support [the plaintiffs’]

claim of damages” at trial.       Neylan, 400 N.W.2d at 542.         In the

malpractice action, the plaintiffs sued their attorneys for the damages

they believed should have been recoverable. Id. The defendants asserted

the district court’s decision entered against their former clients prior to

appeal “should mark the time when a legal malpractice cause of action

accrue[d], because the claimant [was] then formally advised of an adverse

ruling and resulting damage.” Id. However, we adopted a different view

and held the legal malpractice claim accrued when this court affirmed

the trial court’s decision on appeal.     Id.   At that moment, when all

avenues to recovery were exhausted and the underlying claims were
                                     11

extinguished, the injury caused by the alleged breach of duty became

actual rather than potential. See id.

         Our decision in Neylan was undergirded by the principle that each

client “has a ‘right to rely upon the superior skill and knowledge of his

attorney’ ” until that reliance results in actual injury.      Id. (quoting

Millwright v. Romer, 322 N.W.2d 30, 34 (Iowa 1982)). We also reasoned a

litigant who believes she may have been injured through her attorney’s

negligence should not be forced to choose between (a) sabotaging her

relationship with her attorney during ongoing representation by filing a

legal malpractice claim, and (b) waiving her opportunity to bring the

claim before the statute of limitations extinguishes it. Id.; accord Dudden

v. Goodman, 543 N.W.2d 624, 629 (Iowa Ct. App. 1995) (“[I]t would be

palpably unjust and quite unreasonable to require a client of a lawyer to

obtain a second opinion on every professional decision the lawyer

makes.”); see also Amfac Distrib. Corp. v. Miller, 673 P.2d 795, 799 (Ariz.

Ct. App.) (“Under our rule, a client will not have to challenge and

question every decision made by his attorney or routinely double check

his attorney’s conduct . . . . Thus, the client will have peace of mind to

allow the legal process to work fully and finally in hopes that his position

will ultimately be vindicated and will not be forced to disrupt his

relationship with his lawyer to preserve what he thinks may be a valid

malpractice claim.”), approved as supplemented, 673 P.2d 792 (Ariz.

1983) (en banc).

         We conclude Neylan does not justify summary judgment in Meloy’s

favor under the circumstances presented here.        The core teaching of

Neylan is that speculative injury does not give rise to a legal malpractice

claim.     See Neylan, 400 N.W.2d at 542.    An injury arising from legal

malpractice is actionable when it is actual but not when it is merely
                                   12

potential. See, e.g., Huber v. Watson, 568 N.W.2d 787, 790 (Iowa 1997)

(requiring as an element of legal malpractice that “the [client] sustained

actual injury, loss, or damage” (emphasis added)); Ruden, 543 N.W.2d at

610 (same); Vande Kop v. McGill, 528 N.W.2d 609, 611 (Iowa 1995)

(same); Schmitz v. Crotty, 528 N.W.2d 112, 115 (Iowa 1995) (same);

Dessel v. Dessel, 431 N.W.2d 359, 361 (Iowa 1988) (same); Burke v.

Roberson, 417 N.W.2d 209, 211 (Iowa 1987) (same). To be sure, Neylan

did not establish that a legal malpractice claim accrues when a client has

not yet suffered actual injury. See Neylan, 400 N.W.2d at 542.

      Many other jurisdictions follow this rule. See, e.g., Greater Area

Inc. v. Bookman, 657 P.2d 828, 829 n.3 (Alaska 1982) (“[I]f the client

discovers his attorney’s negligence before he suffers consequential

damages, the statute of limitations will not begin to run until the client

suffers actual damages.”); Amfac Distrib. Corp., 673 P.2d at 798–99

(adhering to “the time-honored principles of law which require that the

plaintiff be damaged or injured in some way as a predicate to bringing an

action for negligence”); Jordache Enters., Inc. v. Brobeck, Phleger &

Harrison, 958 P.2d 1062, 1070 (Cal. 1998) (“The mere breach of a

professional duty, causing only . . . speculative harm, or the threat of

future harm—not yet realized—does not suffice to create a cause of

action for negligence.”); Romano v. Morrisroe, 759 N.E.2d 611, 614 (Ill.

App. Ct. 2001) (“No cause of action accrues without actual damages, and

damages are only speculative if their existence itself is uncertain.”);

Pancake House, Inc. v. Redmond, 716 P.2d 575, 579 (Kan. 1986)

(recognizing one theory of accrual is that “the client does not accrue a

cause of action for malpractice until he suffers appreciable harm or

actual damage as a consequence of his lawyer’s conduct”); Mass. Elec.

Co. v. Fletcher, Tilton & Whipple, P.C., 475 N.E.2d 390, 391 (Mass. 1985)
                                     13

(“[T]he electric companies knew immediately of the alleged negligence of

the defendant attorneys, but it was not then clear that the alleged

negligence had caused or would cause the companies any appreciable

harm.”); Watkins Trust, 92 P.3d at 630 (“[T]he mere threat of future harm

does not constitute actual damages.”); Semenza v. Nev. Med. Liab. Ins.

Co., 765 P.2d 184, 186 (Nev. 1988) (“[W]here damage has not been

sustained or where it is too early to know whether damage has been

sustained, a legal malpractice action is premature . . . . [I]t follows that a

legal malpractice action does not accrue until the plaintiff’s damages are

certain and not contingent.”); Grunwald v. Bronkesh, 621 A.2d 459, 464–

65 (N.J. 1993) (“[T]he statute of limitations begins to run only when the

client suffers actual damage . . . . Actual damages are those that are real

and substantial as opposed to speculative.”); Jaramillo v. Hood, 601 P.2d

66, 67 (N.M. 1979) (“[T]he cause of action accrues when actual loss or

damage results . . . .”); Kituskie v. Corbman, 714 A.2d 1027, 1030 (Pa.

1998) (“An essential element to [legal malpractice] is proof of actual loss

rather than a breach of a professional duty causing only . . . speculative

harm or the threat of future harm.”); Ameraccount Club, Inc. v. Hill, 617

S.W.2d 876, 878 (Tenn. 1981) (“The Court of Appeals erred in holding

that the plaintiff's cause of action accrued and the statute of limitations

began to run when the plaintiff became aware of the negligence of the

defendant attorneys; still more was required, viz., damage or injury to the

plaintiff resulting from that negligence.”); Hennekens v. Hoerl, 465

N.W.2d 812, 816 (Wis. 1991) (“A tort claim is not ‘capable of present

enforcement’ until the plaintiff has suffered actual damage. . . . Actual

damage is not the mere possibility of future harm.”).

      We also find support for the principle that a legal malpractice claim

does not arise until actual injury results in the Restatement (Third) of the
                                           14

Law Governing Lawyers, which focuses on pragmatic policy concerns like

those we found persuasive in Neylan:
       [T]he statute of limitations does not start to run until the
       lawyer’s alleged malpractice has inflicted significant injury.
       For example, if a lawyer negligently drafts a contract so as to
       render it arguably unenforceable, the statute of limitations
       does not start to run until the other contracting party
       declines to perform or the client suffers comparable injury.
       Until then, it is unclear whether the lawyer’s malpractice will
       cause harm. Moreover, to require the client to file suit before
       then might injure both client and lawyer by attracting the
       attention of the other contracting party to the problem.
Restatement (Third) of the Law Governing Lawyers § 54 cmt. g, at 406

(2000).

       The statute of limitations cannot require legal malpractice claims

to be brought while “the record is uncertain and speculative whether a

party has sustained damages.” Crookham v. Riley, 584 N.W.2d 258, 266

(Iowa 1998). Put another way, the statute of limitations cannot sensibly

be applied in a way that forces parties to file suit before an actual injury

has been sustained on penalty of losing the opportunity to file a claim at

all. See Cannon v. Sears, Roebuck & Co., 374 N.E.2d 582, 584 (Mass.

1978). Accordingly, we reaffirm the statute of limitations does not begin

to run on a legal malpractice claim until the cause of action accrues.

The cause of action accrues when the client sustains an actual,

nonspeculative injury and has actual or imputed knowledge 4 of the other
elements of the claim.        Franzen, 377 N.W.2d at 662 (“[T]he statute of

limitations does not begin to run until the injured person has actual or



       4Knowledge    could be imputed through the doctrine of inquiry notice. We have
said “[t]he [limitations] period begins at the time the [plaintiff] is on inquiry notice.”
Franzen, 377 N.W.2d at 662. “A party is placed on inquiry notice when a person gains
sufficient knowledge of facts that would put that person on notice of the existence of a
problem or potential problem.” Buechel, 745 N.W.2d at 736.
                                          15

imputed knowledge of all the elements of the action.” (Emphasis added.));

see Watkins Trust, 92 P.3d at 628.

       2. Whether insecurity constitutes an actual injury.            The question

remains, however, whether the plaintiffs’ insecurity arising from the

absence of a mortgage lien against the real estate and a perfected

security interest in the personal property constituted an actual injury.

We hold insecurity alone does not constitute an actual injury.                   Until

Mark and PPM stopped making payments in February 2008, it was

entirely possible the plaintiffs would have continued collecting contract

payments without disruption. Accordingly, it was entirely possible the

decision to structure the transaction without the protection of a

mortgage on the real estate or a perfected security interest in the

personal property would cause the sellers no actual injury.                    See 16

Gregory C. Sisk & Mark S. Cady, Iowa Practice Series: Lawyer and

Judicial Ethics § 13:2(b)(2), at 1088 (2014) (“[U]ntil the final bell is rung

and    the   match   is   truly   over,    the    possibility    persists     that   an

unsatisfactory outcome could be avoided . . . because an opponent fails

to take advantage of the error.”); see also David B. Lilly Co. v. Fisher, 18

F.3d 1112, 1117–18 (3d Cir. 1994) (determining when an attorney

negligently structured a business acquisition transaction by failing to

preserve Lilly’s “small business eligibility,” a legal malpractice claim did

not accrue until several years later when a competitor challenged Lilly’s

small business status); Fritz v. Ehrmann, 39 Cal. Rptr. 3d 670, 676 (Ct.

App.   2006)   (finding   a   promissory         note   with    negligently    drafted

prepayment and interest provisions created only speculative injury

because the promisors “might never have had the funds or the

inclination to prepay principal, and they might have paid . . . without

regard to any ambiguity” in the document).              In other words, until the
                                    16

payments stopped, the plaintiffs suffered only the prospect of future

harm. See Rayne State Bank & Trust Co. v. Nat’l Union Fire Ins. Co., 483

So. 2d 987, 995 (La. 1986) (“Damage was not sustained by the bank by

virtue of the mere existence of defects in the mortgages. At this point,

the possibility of damage to the bank was merely speculative, uncertain

and contingent on the possibility of an attack on the validity of the

mortgages by a third party, or on the possibility that the debtors would

declare bankruptcy.    In the event that neither of these contingencies

occurred, and the debtors continued payment of their indebtedness, no

harm at all would have resulted to the bank.”); see also Dearborn Animal

Clinic, P.A. v. Wilson, 806 P.2d 997, 1003 (Kan. 1991) (“[T]he alleged

negligent act of Wilson occurred at the time he prepared the . . .

agreement, and arguably the plaintiffs suffered injury at that time when

they did not get the agreement that Dearborn hired Wilson to prepare.

However, no actionable injury had occurred because [a third party] might

have elected to exercise his option in which case the plaintiffs would have

suffered no injury even though Wilson was negligent in preparing the

agreement.” (Emphasis added.)); cf. Callahan v. Gibson, Dunn & Crutcher

LLP, 125 Cal. Rptr. 3d 120, 133–34 (Ct. App. 2011) (finding no actual

injury arose from an executed partnership agreement until its negligently

drafted succession provisions became operative).

      An Idaho case provides an apt illustration. In Parsons Packing, Inc.

v. Masingill, 95 P.3d 631, 632–33 (Idaho 2004), the plaintiff alleged its

attorney had negligently failed to draft an effective security agreement

and failed to file a financing statement to secure its interest in debtor

Pro-Ag’s industrial onion bins. The Idaho Supreme Court determined the

abstract and theoretical injury Parsons suffered from being placed in a

weaker position by the attorney’s failure to secure its interest in the
                                     17

collateral was not the injury that truly gave rise to the legal malpractice

claim, and thus was not the injury that controlled the applicable statute

of limitations. See id. at 634. Rather, the requisite injury—which, under

Idaho law, is “some damage”—only occurred when Pro-Ag defaulted and

recovery became impossible:

      Parsons entered into the Agreement as part of a normal lease
      and sale transaction and had Pro–Ag not defaulted, each
      party would have received the intended benefit of the
      bargain. The onion bins were exchanged for a promise on
      the part of Pro–Ag to make the agreed payments, which they
      did until 1998. Although it is true that steps could have
      been taken to secure Parsons’ interest in the bins in the
      event of Pro–Ag’s insolvency, bankruptcy was not
      contemplated and would have been mere speculation in
      1992 when the Agreement was executed. Although they
      were subjected to a greater risk, the Parsons were not
      damaged by the lack of security in the bins until Pro–Ag’s
      bankruptcy. . . . For application of the statute of limitation
      some damage did not occur in 1992. Some damage occurred
      the date of default, April 14, 1998.

Id.

      A Kentucky Supreme Court decision provides another relevant

illustration of the importance of actual injury in our analysis:

             In April and again in October of 1990, appellee
      Wheatley conducted a title examination relating to certain
      real property upon which appellant proposed to make a first
      mortgage loan to its customers, the Pearmans. His opinion
      failed to disclose a recorded mortgage. Within a few months
      after the loan was made, the Pearmans defaulted and
      appellant commenced preparations to bring an action to
      enforce its mortgage lien. The prior mortgage lien was then
      discovered and appellant realized that its loan might be in
      jeopardy.

            ....

            In the present case, the time allowed [for the filing of
      the legal malpractice action] began to run as of the date of
      the foreclosure sale. Prior to that date, Appellants had only
      a fear that they would suffer a loss on the property. Their
      fear was not realized as damages until the sale of the
      property in June of 1992. At that time, what was merely
                                         18
       probable became fact, and thus commenced the running of
       the statute.

Meade Cnty. Bank v. Wheatley, 910 S.W.2d 233, 234–35 (Ky. 1995).
Here, even after the deed from Vossoughi to PPM was recorded, the

plaintiffs’ injuries were merely speculative because Mark and PPM

continued to make payments, and may have continued to do so until

their obligations under the Noncompetition Agreement and Asset and

Business Name Purchase Agreement were satisfied.                    The plaintiffs’

injuries became actual and nonspeculative no earlier than February

2008, when Mark and PPM stopped making payments. 5 “At that time,

what was merely probable became fact . . . .” Id.; see also Pioneer Nat’l

Title Ins. Co. v. Sabo, 432 F. Supp. 76, 76–77, 79, 81–82 (D. Del. 1977)

(finding an insurance company whose hired attorney negligently drafted

a title insurance policy to expand the insurance company’s liability

suffered injury not when the policy was initially issued, but later, when

the overinclusive coverage was actually implicated); Jeansonne v. Att’y’s

Liab. Assurance Soc’y, 891 So. 2d 721, 728 (La. Ct. App. 2004)

(“Mr. Jeansonne did not sustain damages by the mere existence of the

alleged defects in the Promissory Note and Stock Purchase Agreement

. . . . The possibility of damage to Mr. Jeansonne was merely speculative,

uncertain and contingent on the clause Mr. Jeansonne believed was

incorporated into the promissory note and stock purchase agreement. In


       5Moreover,  because Vossoughi could potentially have recovered the balance of
the payment obligations on the remaining two agreements through his action against
Mark and PPM for breach of contract, the actual injury might not have arisen until
Mark and PPM filed for bankruptcy on May 15, 2008. But further analysis on this
temporal question is unnecessary; whether the actual injury occurred in February 2008
when the payments stopped, in May 2008 when Mark and PPM filed for bankruptcy, or
even at some later time—perhaps when the bankruptcy court discharged Vossoughi’s
contract claims—the amended petition against Meloy on June 26, 2012 was
indisputably timely.
                                           19

the event that this contingency did not occur, no harm at all would have

resulted . . . .”). 6

       3. The discovery rule. The discovery rule can extend the applicable

deadline for filing legal malpractice actions. It is “an ameliorative device

favoring the right to bring suit” in situations where laypeople rely on

professionals and later discover misplaced reliance caused injury. Poole

v. Lowe, 615 A.2d 589, 592 (D.C. 1992)).                “The rule is based on the

theory that a statute of limitations should not bar the remedy of a person

who has been excusably unaware of the existence of the cause of action.”

Franzen, 377 N.W.2d at 662.




       6We   acknowledge a few courts have decided insecurity alone constitutes an
actual injury for claim accrual purposes. See Ladner v. Inge, 603 So. 2d 1012, 1015
(Ala. 1992) (concluding the plaintiff suffered an actual injury “when she accepted . . .
unsecured promissory notes” in exchange for real estate); Vision Mortg. Corp. v. Patricia
J. Chiapperini, Inc., 722 A.2d 527, 530 (N.J. 1999) (per curiam) (“[T]he cause of action
should accrue when the mortgagee knows or has reason to know that its collateral has
been impaired or endangered by the negligen[ce] . . . .”). However, we do not find
Ladner persuasive, and we choose instead to follow the numerous authorities we have
cited above holding negligently-drafted documents must cause an actual injury more
tangible than insecurity before a legal malpractice claim accrues.
        Further, our decision today is consistent with Vision Mortgage. The issue
decided there was when the complete cause of action accrued, not merely when the
element of actual injury occurred. See Vision Mortg. Corp., 722 A.2d at 529–30. The
elements of any negligence claim are (1) existence of a duty, (2) breach of that duty, (3)
causation, and (4) damages. Ruden, 543 N.W.2d at 610; see also, e.g., Raas v. State,
729 N.W.2d 444, 447 (Iowa 2007); Yates v. Iowa W. Racing Ass’n, 721 N.W.2d 762, 774
(Iowa 2006); Trobaugh v. Sondag, 668 N.W.2d 577, 580 n.1 (Iowa 2003). In Vision
Mortgage, the court concluded a lender’s negligence claim accrued when a second
appraisal revealed the possibility that a previous appraisal was negligently performed by
the defendant. Vision Mortg. Corp., 722 A.2d at 530. It is crucial to note, however, that
the second appraisal was obtained long after the borrowers defaulted and actual injury
was suffered by the plaintiff. See id. at 528, 530 (noting the borrowers defaulted in
1989, yet the claim did not accrue until 1991). In other words, the lender suffered
actual injury (element 4) when the borrowers defaulted, but did not discover that injury
was caused by negligence (elements 1 and 2) until much later. Thus, Vision Mortgage
stands for the proposition that a negligence claim accrues when all the elements of the
negligence claim are provable. Id. at 530. We follow the same rule here.
                                    20

      However, the discovery rule only lengthens the time to file. See

Millwright, 322 N.W.2d at 33.     Because the plaintiffs did not suffer a

concrete injury before Mark and PPM stopped making payments in

February 2008, the amended petition filed in June 2012 by Vossoughi

and C, N, & A, Inc. asserting claims against Meloy was plainly not time-

barred.   Therefore, the timeliness of the plaintiffs’ action is clearly

established, and the discovery rule is inapplicable in this case.

      4. Disposition of claims against Meloy.     Until at least February

2008, Vossoughi and C, N, & A, Inc. had suffered only the prospect of

potential future harm. When they actually suffered damage, their claims

accrued and only then did the limitations period begin to run. Because

they filed their amended petition against Meloy in June 2012, we

conclude their claims are not time-barred.     The district court erred in

granting summary judgment to Meloy.

      B. Claims Against Polaschek.         Turning to the second issue

before us, we are asked to determine whether the district court correctly

ruled Polaschek’s failure to include in the deed the substance of the

addendum and record the deed with those additions was, as a matter of

law, not a factual cause of the plaintiffs’ damages. To satisfy the “proof

of causation” requirement in legal malpractice cases, plaintiffs must

often make a “showing of the money or rights that the plaintiff would

have collected in the absence of the lawyer’s negligence, which we [have]

referred to as proof of ‘collect[a]bility.’ ” Woods v. Schmitt, 439 N.W.2d

855, 864 (Iowa 1989) (quoting Burke, 417 N.W.2d at 212). The district

court granted Polaschek’s motion for summary judgment based on the

conclusion that Mark and PPM’s bankruptcy would have prevented the

plaintiffs from recovering anything from the buyers’ default even absent

any alleged legal malpractice.      Put another way, the district court
                                        21

concluded the plaintiffs cannot show Polaschek’s acts or omissions

caused any damage and therefore cannot state a claim for legal

malpractice.

       In resolving this issue, we consider whether a reasonable fact

finder could find on this record that if Polaschek had incorporated the

substance of the addendum with the deed as he promised (and recorded

it), American Bank & Trust might not have loaned money to Mark and

taken a mortgage on the real estate. We further consider whether the

fact finder could find that if the real estate had not been mortgaged to

American Bank & Trust as a consequence of the recording, the contract

forfeiture remedy could have been available to prevent or mitigate the

plaintiffs’ losses.

       Collectability need not be shown if a plaintiff alleges legal

malpractice directly caused actual loss; but collectability is a critical

element of any legal malpractice claim alleging legal malpractice

prevented the plaintiff’s recovery. This distinction is illustrated best by

Pickens, Barnes & Abernathy v. Heasley, 328 N.W.2d 524, 525 (Iowa

1983), in which we addressed an appeal from a jury verdict awarding

damages to Heasley for legal malpractice.          Heasley claimed damages

arising from the defendant lawyers’ legal malpractice during a prior trial.

Id. at 525. In particular, Heasley alleged her former lawyers negligently

prosecuted her underlying claim and caused her to fail to recover, and

negligently defended against a counterclaim and caused her to pay

damages on it.        See id.   The district court refused in the malpractice

action to instruct the jury as to any collectability requirement, and

Heasley “did not introduce substantial evidence from which a jury could

reasonably find that a judgment [in her favor in the underlying action]

would [have] be[en] collectible in full or in an ascertainable part.” Id. at
                                     22

526.    We noted the district court’s failure to instruct the jury on

collectability did not invalidate the jury verdict or the damages award on

the counterclaim because actual loss from negligent defense against the

counterclaim had been shown in the amount that Heasley had paid in

damages. Id. at 526–27. But we reversed and granted the defendants’

motion for judgment notwithstanding the verdict as it pertained to lost

recovery stemming from negligent handling of Heasley’s underlying claim

because “when the loss arises from negligently prosecuting a prior case

the client has the burden of proving not only the amount of the judgment

he would have obtained but for the negligence, but also what he would

have collected.” Id. at 525–27.

       Accordingly, under the rule stated in Pickens, Vossoughi and C, N,

& A, Inc. have a burden at trial in this case to prove by a preponderance

of the evidence that the negligence of Meloy, Polaschek, or both caused

the plaintiffs’ inability to recover contract damages from Mark, PPM, or

both. In other words, the plaintiffs in this case must produce evidence

“affording a reasonable basis for ascertaining the loss.” Id. at 526. But

to withstand the defendants’ motions for summary judgment, the

plaintiffs need only engender a genuine dispute of material fact on the

collectability issue.

       “[I]t is a rare case when an issue of collect[a]bility in a malpractice

case is so clear that it can be decided as a matter of law.” Burke, 417

N.W.2d at 213; see also Crookham, 584 N.W.2d at 265 (“It is well

established the questions of negligence . . . and proximate cause are

generally for the jury and only in exceptional cases can they be decided

as a matter of law.”).       We conclude the parties’ conflicting expert

testimony bearing upon collectability engendered a genuine dispute of

material fact on this issue. Vossoughi’s resistance to Polaschek’s motion
                                     23

for summary judgment relied in part on deposition testimony from expert

witness Elaine Gray:

            Q: . . . [I]ncluding the   requested language from the
      contracts wouldn’t have been     sufficient to create a lien on
      the Oasis property, correct?     A: Correct, but it may also
      have deterred any other lien     from being perfected on the
      Oasis property.

              Q: And what do you mean by that? A: If I were
      examining an abstract for a bank who wished to take a first
      priority security interest in property and included in a
      warranty deed was language restricting the owner’s ability to
      sell, I don’t believe that if I set that information out, the bank
      would have believed themselves to be secure in the first
      priority and would therefore not likely have granted a
      mortgage against the property, at least without further
      showing as to what was required to negate the ability or the
      restriction on sale.

      Polaschek supported his motion for summary judgment in part

with testimony of his own expert witness, Stephen T. Hunter. Hunter

opined Polaschek’s failure to record the addendum caused no injury

because even if it had been recorded, the addendum would not have

prevented Mark from mortgaging the property.

      After reading Hunter’s opinion on causation, Gray responded that

no matter the legal effect, the practical consequences of recording the

addendum or its substance with the deed may have been different.

Specifically, Gray opined recording would have created a practical

impediment to a bank considering a loan based on the property as

collateral:

            Q: . . . [T]he final sentence [of Hunter’s report states],
      “The mortgage of the real estate by the buyer is not restricted
      by such omitted language by its terms as affirmed in the
      opinion.” A: From a legal standpoint, I think that’s true; but
      from a practical standpoint, I think a mortgage is restricted.

            Q: And what do you mean by that? A: Again, my
      involvement with banks is that they are very conservative
                                         24
       about lending money against collateral in which they may
       not have a clearly defined first priority security interest; and,
       in my opinion, had Mr. Polaschek or one of his companies
       obtained that real estate with that language in the deed,
       which would in turn have been included in the abstract, the
       proper opinion to a bank would not enable an attorney to
       pass on title . . . if what the bank wanted to do was obtain a
       clearly defined first priority security interest.

We conclude Gray’s deposition testimony engenders a genuine dispute of

material fact on the issue of factual causation—collectability.

       Polaschek contends the addendum did not create any legal limit on

PPM’s right to mortgage the Oasis property, and that the plaintiffs cannot

prove no mortgage lender would have acquired a lien on the Oasis

property and foreclosed on it even if American Bank & Trust had not.

We conclude this contention misconstrues the plaintiffs’ burden at the

summary judgment stage.          To defeat Polaschek’s motion for summary

judgment, the plaintiffs need not prove as a matter of law that recording

the substance of the addendum would have rendered title to the real

estate unmerchantable, as Polaschek suggests. Rather, to prevail at the

summary judgment stage, Polaschek must carry the burden of proving

no genuine dispute of material fact on the collectability element is

engendered from the evidence in the record.               This he has failed to

accomplish. 7
       The    experts’   competing      visions   of   the    potential    practical

consequences of incorporating and recording the language from the

addendum in the warranty deed requires a trial of the factual causation

issue. Therefore, we reverse the district court’s order entering summary

judgment for Polaschek.

       7Polaschek may be able to persuade a fact finder at trial that a bold mortgage
lender might not have been deterred from making a loan to Mark and PPM even if the
substance of the addendum had been recorded with the deed. However, this is a fact
question that cannot be resolved on this record at the summary judgment stage.
                                   25

      VI. Conclusion.

      Vossoughi and C, N, & A, Inc. did not suffer actual damage until at

least February 2008 when the buyers defaulted on their contract

payments. Accordingly, summary judgment in favor of Meloy should not

have been granted. The district court also erred in granting summary

judgment to Polaschek because a fact question remains for trial on the

question whether the substance of the addendum, if recorded, may have

deterred a risk-averse lender from extending credit to Mark and PPM and

taking a mortgage on the subject real estate. Accordingly, we reverse the

district court’s summary judgment order and remand for further

proceedings.

      REVERSED AND REMANDED.

      All justices concur except Waterman, J., who takes no part.
