                                                                         F I L E D
                                                                  United States Court of Appeals
                                                                          Tenth Circuit
                     UNITED STATES COURT OF APPEALS
                                                                          JAN 8 2004
                                  TENTH CIRCUIT
                                                                     PATRICK FISHER
                                                                              Clerk

    SUE SPENCER,

                Plaintiff - Appellant,

    v.                                                   No. 02-2229
                                               (D.C. No. CIV-00-1774 JP/LFG)
    JOSEPH A. SOMMER; SOMMER,                             (D. N.M.)
    FOX, UDALL, OTHMER,
    HARDWICK & WISE, P.A.,

                Defendants - Appellees.


                             ORDER AND JUDGMENT         *




Before SEYMOUR , BRISCOE , and LUCERO , Circuit Judges.



         Plaintiff Sue Spencer appeals from the entry of summary judgment in favor

of defendants, attorney Joseph A. Sommer and his law firm Sommer, Fox, Udall,

Othmer, Hardwick & Wise, P.A. in this diversity action for legal malpractice,



*
       After examining the briefs and appellate record, this panel has determined
unanimously that oral argument would not materially assist the determination of
this appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is
therefore ordered submitted without oral argument. This order and judgment is
not binding precedent, except under the doctrines of law of the case, res judicata,
and collateral estoppel. The court generally disfavors the citation of orders and
judgments; nevertheless, an order and judgment may be cited under the terms and
conditions of 10th Cir. R. 36.3.
breach of fiduciary duty, and deceit. Spencer alleged that Sommer, as co-personal

representative of her late father’s estate, and Sommer’s firm, as counsel for the

estate, mishandled matters ancillary to the estate’s administration. The district

court granted summary judgment to defendants on several grounds, holding that

Spencer’s claims were (1) time-barred, (2) precluded by res judicata and collateral

estoppel, and (3) failed to establish the requisite attorney-client relationship to

sound in legal malpractice. On de novo review,       see Tiberi v. Cigna Corp. , 89

F.3d 1423, 1428 (10 th Cir. 1996), we agree that Spencer’s claims are time-barred

and, accordingly, affirm without reaching any of the other issues raised.

       As a threshold matter, we address Spencer’s objection that an order issued

by the magistrate judge denied her adequate discovery to respond to defendants’

summary judgment motion. Review of a magistrate judge’s ruling must first be

sought in the district court, as “appellate courts are without power to hear appeals

directly from orders of federal magistrates.”      Niehaus v. Kan. Bar Ass’n , 793 F.2d

1159, 1165 (10 th Cir. 1986). Because Spencer did not challenge the magistrate

judge’s order in district court, we may not consider this challenge.     See also

Pippinger v. Rubin , 129 F.3d 519, 533 (10 th Cir. 1997) (“ It is a well established

rule that the court of appeals cannot review a magistrate judge's order . . . .”).

       We note that months after the magistrate judge issued its order denying

Spencer’s request for additional discovery, defendants submitted a notice to file


                                            -2-
supplemental documents in support of summary judgment. (App. vol. 3, tab 19.)

Spencer moved to strike this submission, or, in the alternative, for the court to

reconsider her request for additional discovery. (      Id., tab 20.) Spencer does not

argue that her motion to strike constitutes a challenge to the magistrate judge’s

order. Moreover, because the district court expressly stated that it did not rely on

defendants’ additional documents in granting summary judgment and thus

dismissed Spencer’s motion as moot, we would not consider such an argument

persuasive in any event. ( Id. , tab 23, at 859.) Therefore, we decline to consider

Spencer’s challenge to the magistrate’s order denying additional discovery.

       Because this is a diversity case alleging legal malpractice, we apply the

limitations law of the forum state.      Jenkins v. City of Topeka , 136 F.3d 1274,

1275 (10 th Cir. 1998). New Mexico courts have not resolved whether the

three-year statute for personal injury actions, N.M. Stat. Ann. § 37-1-8, or the

four-year statute for claims on unwritten contracts and “all other actions not

herein otherwise provided for,” N.M. Stat. Ann. § 37-1-4, should apply in the

legal malpractice context.   1
                                 See , e.g. , Delta Automatic Sys., Inc. v. Bingham   , 974

P.2d 1174, 1179 (N.M. Ct. App. 1998);         Duncan v. Campbell , 936 P.2d 863,

864-65 (N.M. Ct. App. 1997). The district court concluded that this action filed


1
       The parties agreed that the limitations analysis for legal malpractice claims
should control the disposition of Spencer’s related claims as well.   See App. vol.
3, tab 23, at 853 n.5.

                                              -3-
on December 18, 2000, was untimely under either statute, obviating a definitive

choice between the two. We reach the same conclusion.

       A legal malpractice claim accrues when an attorney causes actual injury to

a client who knows, or by reasonable diligence should know, facts essential to a

cause of action to redress the injury.   Sharts v. Natelson , 885 P.2d 642, 645 (N.M.

1994). “Thus, the statute of limitations does not begin to run until the client

discovers, or should discover, that he or she has suffered a loss and that the loss

may have been caused by the attorney’s wrongful act or omission.”             Id.

       Defendants insist that the bare factual knowledge of counsel’s conduct is

all that is required to start the clock on a malpractice claim, regardless of whether

the client knows or should know anything that would call that conduct into

question. Conversely, Spencer argues that a legal malpractice action does not

accrue until the client learns that an attorney’s conduct is legally redressible.

Neither of these positions, however, correctly read the rule articulated in         Sharts ,

which reflects a measured approach lying between these extremes: the known

facts must suggest some error or omission by counsel to prompt the client’s

diligent preservation of her claim, but it is not necessary that the client know that

the facts satisfy a legal standard for liability.

       For example, in Sharts , the New Mexico Supreme Court held that plaintiff’s

letter accusing his attorney of carelessness in preparing real estate covenants


                                             -4-
constituted sufficient knowledge to trigger the malpractice limitations period.       Id.

at 647. It was not necessary that plaintiff knew the mistake constituted actionable

malpractice; it was enough that he knew his attorney “may have been negligent in

drafting the covenants.”    Id. In so concluding, the court relied on several cases

determining that a claim accrues when plaintiffs demonstrate knowledge of the

“errors,” “mishandl[ed] funds,” or “bad advice” on which their malpractice claims

rest. Id. (citing Levin v. Berley , 728 F.2d 551, 553 (1 st Cir. 1984); Kabbe v.

Miller , 275 Cal. Rptr. 893, 895 (Cal. Ct. App. 1990);        Melgard v. Hanna , 607 P.2d

795, 797 (Or. Ct. App. 1980)). Subsequent decisions by the New Mexico Court

of Appeals are consistent with this view.      See , e.g. , Delta Automatic Sys., Inc ,

974 P.2d at 1180-81 (holding claim accrued, even if client did not know counsel

had committed malpractice, when client knew counsel had failed to terminate a

union contract over a year after he was retained to do so);       Duncan , 936 P.2d at

865 (holding claim accrued at time when plaintiff alleged he knew counsel “had

not adequately and properly represented him”).

       Spencer’s claims turn on defendants’ allegedly erroneous legal advice

regarding the sale of land in her father’s estate to another of defendants’ clients,

Ralph Brutsche. In 1987, Spencer’s father contracted to sell a 160-acre tract to

Brutsche. Complications arose and, when her father died in 1989, Brutsche had

not timely consummated the contract nor accepted an extension he was offered.


                                            -5-
Spencer alleges that she relied on defendants’ advice that Brutsche could enforce

the 1987 contact, which would result in dire IRD (income-in-respect-of-a-

decedent) tax consequences, when     she decided to negotiate a new contract with

Brutsche in 1990 on less favorable terms rather than seek other purchasers.

Spencer claims that she later learned the 1987 contract was      not enforceable and,

hence, should not have affected her decision to sell the land to Brutshe.

      As a result of what she felt was her constrained bargaining position,

Spencer suffered actual loss as a result of defendants’ advice long before the

December 18, 1996 cutoff for the four-year limitations period.      The critical

question, then, is when Spencer knew or should have known that defendants may

have been negligent (or intentionally wrongful) in giving her that advice.

Spencer’s affidavit states that she retained attorney Earl Potter in 1995 to review

defendants’ records of the Brutsche transaction. Although Potter did not conclude

that defendants mishandled the matter, Spencer’s doubts persisted and, in January

1996, she asked Sommer and the firm to relinquish their role in the probate

proceedings. When they declined to withdraw, one month later, Spencer retained

attorney Martin Threat to look into various concerns she had about defendants’

representation, particularly in connection with the administration of her father’s

estate. Threat sought a full inventory of the estate, but later withdrew for

personal reasons before completing his review. Finally, in 1999, Spencer once


                                           -6-
more retained an attorney, this time Donald Swaim, to review the Brutsche

transaction. Based on facts related by Spencer, Swaim concluded that the 1987

Brutsche contract was not enforceable and would not result in IRD tax

consequences as defendants suggested. Spencer argues that her cause of action

against defendants did not accrue until Swaim’s assessment of the Brutsche

transaction confirmed her suspicions about the legal inadequacy of defendants’

advice.

       We disagree. Swain’s negative professional opinion was not necessary to

trigger the statute of limitations. Again, the crucial juncture is when Spencer

knew or should have known that defendants’ advice may have been wrong.

Spencer’s bare factual knowledge of defendants’ conduct, i.e., that they advised

her to negotiate with Brutsche to avoid IRD tax liabilities, is not itself sufficient

to trigger the limitations period. However, on Spencer’s own recital of the salient

facts, she clearly had doubts about defendants’ advice regarding the Brutsche

transaction as early as 1995 when she retained Potter to evaluate the matter,   2
                                                                                    and


2
       Spencer argues that because Potter did not catch the error later discerned by
Swaim, her retention of Potter should not trigger the accrual of her claim under
the discovery rule. Thus Spencer assumes that if a client’s suggestion of error is
not confirmed by a professional assessment, an action cannot accrue. Spencer
cites no authority for her view, which runs counter to the basic thrust of the case
law. For example, New Mexico courts have repeatedly stated that accrual of a
malpractice claim is not postponed “until the plaintiff consults an attorney,”     Delta
Automatic Sys., Inc ., 974 P.2d at 1181 (quotation omitted); a fortiori, accrual is
                                                                           (continued...)

                                            -7-
certainly by January 1996, when she asked defendants to relinquish their role in

the probate proceedings. Because both these dates precede the December 18,

1996 cutoff for the four-year limitations period, we conclude that Spencer’s

claims are time-barred.      3



       Finally, Spencer seeks to invoke the “continuous representation” doctrine

recognized in a majority of states to toll the limitations period until the attorney-

client relationship terminates with respect to the matters that form the basis of the

client’s malpractice suit.       See 3 Ronald E. Mallen & Jeffrey M. Smith,   Legal

Malpractice § 22.13, at 431-37 (5 th ed. 2000). New Mexico courts have thus far

declined to adopt this doctrine, at least in cases where compelling circumstances

were not present.    See Sharts , 885 P.2d at 647; LaMure v. Peters , 924 P.2d 1379,

1385 (N.M. Ct. App. 1996);         see also Delta Automatic Sys., Inc ., 974 P.2d at 1181.

Considerations of federalism make us reluctant to take this step on behalf of New

2
 (...continued)
not postponed during multiple professional consultations until the plaintiff
succeeds in securing an opinion supporting a legal claim. Again, the critical
inquiry is when the client knows enough suggestive facts to suspect that counsel
may have acted wrongfully, not when she knows that an actionable claim exists.
3
       Our analysis has concentrated on the disputed Brutsche transaction that is
the focal point of Spencer’s case. We have not, however, overlooked her other
allegations more directly associated with estate administration. To the extent she
maintains that these secondary matters would survive even if her primary claim
was time-barred, the undisputed facts clearly demonstrate otherwise. By no later
than January-February 1996, she had become just as dissatisfied and suspicious
regarding defendants’ overall administration of the estate as she was regarding the
primary Brutsche transaction.

                                               -8-
Mexico courts. However, even if adopted, the doctrine would not apply here for

two reasons.

       First, “[t]he purpose of the [continuous representation] doctrine is to avoid

unnecessarily disrupting the attorney-client relationship.”        Sharts , 885 P.2d at 647

(quotation omitted). Consequently, “[o]ne of the predicates to application of the

continuous representation doctrine is continuing trust and confidence” between

client and attorney.   Pittelli v. Schulman , 128 A.D.2d 600, 601 (N.Y. App. Div.

1987); see Hendrick v. ABC Ins. Co. , 787 So.2d 283, 293 (La. 2001).           Thus, the

doctrine has not been applied when a dissatisfied or suspicious client sought

“second opinions” regarding counsel’s conduct,        Hendrick , 787 So.2d at 293, or

attempted to terminate or curtail the professional relationship,      Pittelli , 128 A.2d at

601. Cf. LaMure , 924 P.2d at 1385 (concluding that in light of dissatisfied

client’s effort to limit professional duties of accountant, “the policies behind

adopting the continuous relationship exception severely diminish,” and, “[t]hus,

even if [this court] were free to question the Supreme Court’s recent, express

disinclination [in Sharts ] to adopt the continuous relationship exception, [this

court] would not do so in this case”) (citation omitted)      . Spencer repeatedly

retained other representation to scrutinize defendants’ conduct, and tried to force

defendants’ withdrawal from the estate proceedings well before the operative

limitations date. Requiring Spencer to take action to preserve potential legal


                                             -9-
claims by pursuing the many suspicions of misconduct she harbored at that time

hardly constitutes an unnecessary disruption of an existing relationship of

professional trust.

       Second, and this point relates with particular force to Spencer’s primary

complaint about the Brutsche transaction, “[t]he predicate of the continuous

representation rule is not merely the existence of an attorney-client relationship

but [continued] representation on the same subject matter [underlying the

malpractice claim]. Representation on unrelated matters is not continuous

representation. A general, ongoing relationship on other matters does not

suffice.” 3 Mallen & Smith,        supra § 22.13, at 445–46; see Sharts , 885 P.2d at

647–48 (noting necessary continuity relates to “the attorney’s representation

concerning a particular transaction”) (quotation omitted). Thus, continued

representation by counsel on other matters will not toll the limitations period for

malpractice claims relating to counsel’s prior conduct on discrete questions or

particular transactions, such as failure to record a trust, negligent handling of a

sale, or erroneous title advice.     See , e.g. , Stevens v. Lake , 615 So.2d 1177, 1182

(Miss. 1993). There is some dispute about the timing, nature, and even existence

of a professional relationship between the parties in the years following the

conclusion of Spencer’s dealings with Brutsche; suffice it to say that whatever the




                                              -10-
precise character of that relationship,   it does not serve to toll the limitations

period for Spencer’s claims of misconduct by defendants in connection therewith.

       We conclude that Spencer’s claims are time-barred and, therefore, AFFIRM

the judgment of the district court.



                                                        Entered for the Court



                                                        Carlos F. Lucero
                                                        Circuit Judge




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