                     IN THE COURT OF APPEALS OF TENNESSEE

                                   FILED
                                   October 19, 1999

                               Cecil Crowson, Jr.
                              Appellate Court Clerk
                                 AT JACKSON
                ______________________________________________

P. PRESTON WILSON, Trustee
for the Estate of Blake A. Weber
and Lucy W. Weber, Debtors,

      Plaintiff-Appellee,
                                               Shelby Circuit No. 84459
Vs.                                            C.A. No. 02A01-9806-CV-00147

GAIL MATHES,

     Defendant-Appellant.
______________________________________________________________________
______

                    FROM THE SHELBY COUNTY CIRCUIT COURT
                   THE HONORABLE ROBERT L. CHILDERS, JUDGE



                            Ronald D. Krelstein of Memphis
                                    For Appellee

                         Tim Edwards and James F. Horner
                 Glassman, Jeter, Edwards and Wade, P.C., of Memphis
                                     For Appellant




                            AFFIRMED AND REMANDED

                                     Opinion filed:




                                                                              Page 1
                                                         W. FRANK CRAWFORD,
                                                         PRESIDING JUDGE, W.S.


CONCUR:

DAVID R. FARMER, JUDGE

HOLLY KIRBY LILLARD, JUDGE


       This is a legal malpractice action.     Defendant/appellant, Gail Mathes (Mathes),

appeals the order of the trial court denying her motion for summary judgment. 1

       In the summer of 1992, Blake Weber (Weber) was fired from his job at Jefferson

Pilot Insurance allegedly for attempting to hire an African-American woman. In the fall of

1992, Weber hired Mathes to represent him in an action against Jefferson Pilot for

retaliatory discharge. Mathes filed an action on behalf of Weber against Jefferson Pilot on

August 31, 1993, two weeks after the one-year anniversary date of his discharge. Jefferson

Pilot then filed a motion for summary judgment on the basis that the action was filed after the

one-year limitation period had expired, which the trial court granted on January 18, 1994.

       Mathes then filed notice of appeal, and this Court affirmed the trial court’s dismissal

on January 17, 1996. At that time, Mathes informed Weber that he may have a malpractice

claim against her.   Mathes’s application for permission to appeal was granted by the

Supreme Court. Subsequently, the decision of the Court of Appeals was affirmed.

       Weber and his wife declared bankruptcy at some point prior to filing this action, and

the bankruptcy trustee, P. Preston Wilson (Wilson), filed the present action for malpractice

on January 15, 1997. 2 Mathes filed a motion for summary judgment on the basis that the

one-year statute of limitations for legal malpractice actions began to run on January 18,

1994, when the trial court initially dismissed Weber’s case, and that the suit was time

barred.

       The trial court denied Mathes’ motion for summary judgment, and she was granted

an interlocutory appeal by the trial court and this Court pursuant to T.R.A.P. 9. Mathes


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presents the following issues in her brief:

              1. Whether the Trial Court erred in denying the Motion for
              Summary Judgment of Defendant Gail Mathes holding that a
              genuine issue of material fact existed with regard to whether
              Plaintiff’s claims of legal malpractice against Defendant Gail
              Mathes were barred by the one (1) year statute of limitations
              contained in T.C.A. § 28-3-104?

              2. Whether the one (1) year statute of limitations for legal
              malpractice actions set forth in T.C.A. § 28-3-104 is tolled
              where an attorney allegedly committing malpractice fails to
              advise his/her client of such malpractice even though the client
              is aware of all facts upon which said claim of malpractice is
              based over one (1) year prior to filing his claim for legal
              malpractice.

       A motion for summary judgment should be granted when the movant demonstrates

that there are no genuine issues of material fact and that the moving party is entitled to a

judgment as a matter of law. Tenn. R. Civ. P. 56.04.          The party moving for summary

judgment bears the burden of demonstrating that no genuine issue of material fact exists.

Bain v. Wells, 936 S.W.2d 618, 622 (Tenn. 1997). On a motion for summary judgment, the

court must take the strongest legitimate view of the evidence in favor of the nonmoving party,

allow all reasonable inferences in favor of that party, and discard all countervailing evidence.

 Id. In Byrd v. Hall, 847 S.W.2d 208 (Tenn. 1993), our Supreme Court stated:

              Once it is shown by the moving party that there is no
                    genuine issue of material fact, the nonmoving
                    party must then demonstrate, by affidavits or
                    discovery materials, that there is a genuine,
                    material fact dispute to warrant a trial. In this
                    regard, Rule 56.05 [now Rule 56.06] provides that
                    the nonmoving party cannot simply rely upon his
                    pleadings but must set forth specific facts
                    showing that there is a genuine issue of material
                    fact for trial.

Id. at 211 (citations omitted) (emphasis in original).

       Summary judgment is only appropriate when the facts and the legal conclusions

drawn from the facts reasonably permit only one conclusion. Carvell v. Bottoms, 900

S.W.2d 23, 26 (Tenn. 1995).         Since only questions of law are involved, there is no

presumption of correctness regarding a trial court's grant of summary judgment. Baie, 936



                                                                                                   Page 3
S.W.2d at 622. Therefore, our review of the trial court’s grant of summary judgment is de

novo on the record before this Court. Warren v. Estate of Kirk, 954 S.W.2d 722, 723

(Tenn. 1997).

       An action for legal malpractice must be commenced “within one (1) year after the

cause of action accrued.” T.C.A. § 28-3-104(a)(2) (Supp. 1998). Carvell v Bottoms, 900

S.W.2d 23 (Tenn. 1995), is the seminal case in Tennessee involving the accrual of a legal

malpractice cause of action. In Carvell, the plaintiffs retained the legal services of the

defendants for the purpose of selling a real estate parcel to Ms. Roaby Baxter. Although a

preliminary title opinion drafted by the defendants indicated the existence of a pipeline

easement across the property, the warranty deed prepared by the defendants did not

mention the easement. A few years after purchasing the property, Ms. Baxter filed suit

against the Carvells upon discovering the existence of the easement. The plaintiffs were put

on notice at some point soon thereafter that the defendants may have negligently drafted the

warranty deed. In January of 1989, a trial court entered an order on a jury verdict in favor of

Ms. Baxter. 3 Both parties appealed, but the trial court’s judgment was affirmed in March of

1990. The plaintiffs proceeded to bring a legal malpractice suit against the defendants in

May of 1990. Id. at 24-25.

       The plaintiffs argued that the cause of action did not accrue until the Court of Appeals

decision was filed in March of 1990, claiming that their injury did not become “irremediable”

until all of their possible appeals had been exhausted. Id. at 29. The Supreme Court

rejected the plaintiffs’ argument and held that although the plaintiffs’ injury need not be “

irremediable” there must be a “legally cognizable” or “actual” injury.4 Carvell, 900 S.W.2d at

29-30. The Court further stated that “the plaintiff is deemed to have discovered the right of

action if he is aware of facts sufficient to put a reasonable person on notice that he has

suffered an injury as a result of wrongful conduct.” Id. at 29 (quoting Roe v. Jefferson, 875

S.W.2d 653, 657 (Tenn. 1994)). Applying this standard, the Court noted that the Carvells

should have known that they had sustained an injury as a result of the lawyer’s negligence



                                                                                                  Page 4
when they were sued by Baxter in 1986. Carvell, 900 S.W.2d at 29.

       Thus, a cause of action for legal malpractice accrues when: 1) the defendant’s

negligence causes the plaintiff to suffer a legally cognizable or actual injury; and 2) the

plaintiff knows “or in the exercise of reasonable diligence should have known that this injury

was caused by defendant’s negligence.” Id. at 28, 30.

       Before Carvell, Tennessee courts struggled with the issue of the accrual of a legal

malpractice cause of action on numerous occasions. In Ameraccount Club, Inc. v. Hill,

617 S.W.2d 876 (Tenn. 1981), the plaintiff corporation employed the defendant attorneys to

register a service mark and logo with the United States Patent Office. After learning in

March of 1975 that their application filed in December of 1974, was incomplete, the

defendants completed the application, and a registration date of March 13, 1975 was

assigned.   The defendants, however, failed to conduct a search of whether any other

applications for similar service marks had been submitted. By letter of August 13, 1975, the

plaintiff was notified that another company had submitted an application for a similar service

mark in February of 1975. Although the other company was conferred precedence, the

plaintiff was notified that it retained the right to contest this conferral. Shortly thereafter

(before August 27, 1975), the plaintiff conducted a shareholders’ meeting in which the

members agreed that the defendants had acted negligently. The plaintiff never contested

the Patent Office’s decision and was notified on April 27, 1976 that the Patent Office had

officially refused its application.   The plaintiff filed a legal malpractice suit against the

defendants on August 27, 1976. Id. at 876-77.

       The Supreme Court rejected the defendants’ argument that the cause of action

accrued at the point that the plaintiff discovered the defendants’ negligence. Instead, the

Court held that “more was required, viz., damage or injury to the plaintiff resulting from that

negligence,” and found that the plaintiff did not suffer an injury from the alleged negligence

until the Patent Office rejected its application on April 27, 1996. Id. at 878. The Court cited

approvingly the notion that the cause of action accrues at the point at which the alleged



                                                                                                  Page 5
negligence becomes “irremediable.” Id. at 879 (quoting Chamberlain v. Smith, 72 Cal.

App. 3d 835, 140 Cal. Rptr. 493 (1977)).

       In Security Bank & Trust Co. v. Fabricating, Inc., 673 S.W.2d 860 (Tenn. 1983), a

town’s local bond counsel assisted in the issuance of revenue bonds that were personally

guaranteed by two individuals.     The bonds defaulted on October 1, 1974, and it was

subsequently discovered that the bond issue may have been fraudulently conceived by the

two individual guarantors. A few months later, the town and the trustee bank filed suit

against the two guarantors, 5 seeking recovery for the failure of the bond issue. In the

Summer of 1975, letters were written to the trustee bank recommending that a suit be

brought on behalf of the bondholders against certain parties, including the bond attorneys.

A legal malpractice suit was not brought against these attorneys, however, until November

of 1976. Id. at 861-63.

       The Supreme Court rejected the plaintiffs’ argument that the cause of action did not

accrue until the suit against the guarantors was concluded. Citing Ameraccount, supra,

the Court stated:

              Obviously, negligence without injury is not actionable; hence, the
              statute of limitations could not begin to run until the attorney’s
              negligence had resulted in injury to the plaintiff. In the instant
              case, the injury to the bondholders occurred on October 1,
              1974, when the bonds defaulted. There is no merit whatever
              in the plaintiffs’ argument that their injury did not occur until the
              suit against the guarantors in Texas was concluded. A plaintiff
              cannot be permitted to wait until he knows all of the injurious
              effects as consequences of an actionable wrong.

Security Bank, 673 S.W.2d at 864-65 (internal citation omitted) (emphasis in original).



       In Chambers v. Dillow, 713 S.W.2d 896 (Tenn. 1986), the plaintiff hired the

defendant attorney to represent him in a suit against the county. The plaintiff’s suit against

the county was dismissed in March of 1981 for failure to prosecute. After being notified of

this dismissal in March of 1982, the plaintiff hired another attorney, who filed a T.R.A.P.

60.02 motion to set aside the order of dismissal. Although this motion was granted, the trial



                                                                                                 Page 6
court ultimately dismissed the suit for the second time in April of 1983. The plaintiff filed a

malpractice suit against the defendant and the defendant’s law firm in October of 1983. Id.

at 896-97.

       The plaintiff argued that his cause of action did not accrue until the date of the

second dismissal.      The Supreme Court, however, found that the plaintiff suffered “

irremediable” injury on the date of the first order of dismissal in March of 1981, since this

dismissal qualified as “an adjudication upon the merits” in accordance with T.R.A.P.

41.02(3). 6 Chambers, 713 S.W.2d at 898. The Court stated:

              Where as here the client has knowledge of the lawyer’s
              negligence, of the termination of his lawsuit, of the legal
              consequences of that termination, and has employed another
              lawyer to prosecute his malpractice claim, he cannot defer the
              irremediable injury date by futile efforts to revive a legally
              dismissed lawsuit.

Id. The Court also noted that the plaintiff had suffered “sufficient” tangible injury at the point

of his discovery that the initial suit was dismissed: namely he was liable for the court costs of

his dismissed suit, he had lost at least the interest on anticipated money recovery, and he

was faced with the prospect of incurring attorney’s fees for the impending legal malpractice

suit. Id. at 898-99. See also Bland v. Smith, 197 Tenn. 683, 277 S.W.2d 377 (1955).

       This Court considered this issue in 1986 in Memphis Aero Corp. v. Swain, 732

S.W.2d 608 (Tenn. App. 1986). The plaintiff in Memphis Aero hired the defendant attorney

to collect the balance of an account owed by Argonauts, Inc.. The defendant proceeded to

file a civil warrant and an attachment for an aircraft owned by Argonauts that was stored on

the plaintiff’s premises. The plaintiff’s attachment was sustained when Argonauts failed to

appear, and the aircraft was sold to satisfy the judgment.        One month later, Argonauts

notified the defendant that the attachment was wrongfully obtained since no service of

process was ever received by Argonauts. Consequently, Argonauts filed suit for damages

resulting from the wrongful attachment against the defendant and the plaintiff in August of

1978. A 1982 order by the trial court dismissing the suit was reversed by the Court of




                                                                                                     Page 7
Appeals and, ultimately, Argonauts was awarded a judgment in December of 1983. Also in

December of 1983, the plaintiff sued the defendant for legal malpractice. Id. at 608-09.

       We held that the cause of action accrued more than one year before the complaint

was filed. Citing the aforementioned cases, we found that the plaintiff suffered an injury as

early as the time that Argonauts filed its suit for the wrongful attachment in August of 1978,

when the plaintiff “received periodic billings from its lawyers for services in the defense of

the Argonauts case and paid bills as they were received throughout the pendency of that

suit.” Id. at 612; see also Tennessee WSMP, Inc. v. Capps, No. 03A01-9407-CV-00241,

1995 WL 83579 (Tenn. App. Mar. 2, 1995); Dukes v. Noe, 856 S.W.2d 403 (Tenn. App.

1992); Batchelor v. Heiskell, Donelson, Bearman, Adams, Williams & Kirsch, 828

S.W.2d 388 (Tenn. App. 1991); Bridges v. Baird, Shelby Law No. 32, 1989 WL 740 (Tenn.

App. Jan 9, 1989); Denley v. Smith, Shelby Law No. 48, 1989 WL 738, *4 (Tenn. App. Jan.

9, 1989) (“[T]he action accrued when any damages, no matter how small, became apparent.

”); Master Slack Corp. v. Bowling, Hardeman Law No. 2, 1987 WL 10406 (Tenn. App.

May 5, 1987); Citizens Bank v. Williford, No. 85-315-II, 1986 WL 6056, *7-9 (Tenn. App.

May 29, 1986) (Koch, J., concurring); Annotation, When Statute of Limitations Begins to

Run Upon Action Against Attorney for Malpractice, 18 A.L.R.3d 978 (1968).

       Since Carvell, the issue has been revisited by the Court of Appeals on a few

occasions. See, e.g., Tanaka v. Meares, 980 S.W.2d 210 (Tenn. App. 1998); Rayford v.

Leffler, 953 S.W.2d 204 (Tenn. App. 1997); Bokor v. Bruce, No. 01A01-9603-CV-00119,

1996 WL 465235 (Tenn. App. Aug. 16, 1996); Smith v. Petkoff, 919 S.W.2d 595 (Tenn.

App. 1995). In Porter-Metler v. Edwards, No. 03A01-9709-CV-00393, 1998 WL 131515

(Tenn. App. Mar. 25, 1998), the plaintiff hired the defendant attorney to represent her in a

personal injury suit. A complaint was filed 7 but process and alias process were returned

unserved in 1993. Because further process was not issued and a new complaint was not

timely filed, the trial court dismissed the action. 8 The plaintiff proceeded to bring a legal

malpractice suit against the defendant on June 12, 1995. Id. at *1. Citing the two-prong



                                                                                                 Page 8
rule articulated in Carvell, supra, the Court stated:

                    Regarding the first part of the discovery rule, plaintiff argues
                that she did not suffer a legally cognizable injury until the court
                entered an order dismissing her underlying case. If the issue of
                whether dismissal should have been granted were less clear or
                open to reasonable legal debate, the plaintiff might have a
                stronger argument. But in this case, where service of process
                was not timely reissued, it was patently clear that plaintiff’s claim
                against [the alleged personal injury tortfeasor] had become
                time-barred and there was nothing that could have been done to
                revive her action. Thus, she suffered a legally cognizable injury
                at the expiration of the six-month period within which she was
                allowed by the Tennessee Rules of Civil Procedure to reissue a
                summons. . . .

Id. at *2 (emphasis added).

          Finally, the Supreme Court recently addressed this issue again in John Kohl & Co.

P.C. v. Dearborn & Ewing, 977 S.W.2d 528 (Tenn. 1998).                    Kohl involved a legal

malpractice claim concerning alleged erroneous advice given in connection with the client’s

profit sharing plan.    The trial court found the law firm liable for some of its actions in

connection with the profit sharing plan and awarded damages therefor. However, the trial

court held that the claims relative to the rollovers and contributions of individual retirement

account funds were barred by the one-year statute of limitations. The Court of Appeals

affirmed the judgment of the trial court, and the Supreme Court affirmed the two lower

courts.

          The Court noted that in September of 1988, the Kohls received a letter from the IRS

informing them of some problems with their 1986 tax return and requested further

information concerning the statements in the return. The Kohls’s accountant responded to

the letter shortly thereafter with the information sought by the IRS. On October 24, 1988,

Robert Kolarich, another of the Kohls’s lawyers, wrote Dearborn & Ewing advising the law

firm of new problems with the IRS concerning the pension and profit sharing plans. Mr.

Kolarich’s letter stated, among other things:

                Evidently, Mr. Huffstutter had advised that the funds held in an
                IRA account could be transferred to the pension and profit
                sharing account and the IRS is reviewing the transaction.



                                                                                                  Page 9
Kohl, 977 S.W.2d at 531.

       On May 1, 1990, Kohl filed a legal malpractice suit against Huffstutter and Dearborn

& Ewing alleging that they committed malpractice in connection with the profit sharing plan

in various particulars. The trial court, in holding that the statute of limitations barred the

claims pertaining to the rollover and contributions to the profit sharing plan, noted that the

October 24, 1988 letter from Kolarich indicated that both Kohl and Kolarich were aware of

the problem, and it was so severe that Kohl was changing law firms.

       The Kohl Court began by reiterating the two-prong rule articulated in Carvell, supra.

 Id. at 532. In discussing the actual injury prong, the Court stated that “[a]n actual injury may

also take the form of the plaintiff being forced to take some action or otherwise suffer ‘some

actual inconvenience,’ such as incurring an expense, as a result of the defendant’s negligent

or wrongful act.” Id. Moreover, the Court stated:

               A plaintiff may not, of course, delay filing suit until all the injurious
               effects or consequences of the alleged wrong are actually
               known to the plaintiff. Allowing suit to be filed once all the
               injurious effects and consequences are known would defeat the
               rationale for the existence of statutes of limitations, which is to
               avoid the uncertainties and burdens inherent in pursuing and
               defending stale claims.

Id. at 533 (citations omitted).

       As for the facts before them, the Court noted that the Kohls needed only to be aware

of facts sufficient to put them on notice that an injury had been sustained as a result of

erroneous advice, and that Kolarich’s letter established that the Kohls had notice of a

problem in this regard. The Court found that the inquiry by the IRS was sufficient in itself to

satisfy the injury prong of the discovery rule, and that Kolarich’s letter of October 24, 1988 to

the law firm satisfied the knowledge prong. The Court said:

               The plaintiffs [Kohl] suffered an actual injury for purposes of
               the discovery rule when they began to incur expenses, or
               at least had to take some action, as a result of the
               defendant’s negligent advice. This would have been on
               October 19, 1988 when their accountant had to respond to the
               IRS’s request for information after it noted a conflict between the



                                                                                                    Page 10
              amount reported by the plaintiffs on their tax returns and the
              amounts reported by payers. The plaintiffs’ arguments to the
              contrary notwithstanding, the fact that the IRS had not taken any
              formal action against the Kohls as of that date, such as filing suit
              against them or issuing a deficiency notice, is largely irrelevant
              because, as noted above, it was unnecessary for the plaintiffs to
              have suffered all of the injurious effects or consequences of the
              defendant’s negligence in order for the statute to begin running.


977 S.W.2d at 533 (emphasis added).

       Mathes asserts that Weber suffered an injury when the chancery court dismissed his

action on January 18, 1994. We agree. This appears to satisfy the first prong of the Carvell

test. Mathes also asserts that Weber knew, or in the exercise of reasonable diligence

should have known, that the trial court’s dismissal of his action was caused by her

negligence, thus satisfying the second prong of the Carvell test. 9

       When viewed in the light most favorable to Weber, the non-moving party, the facts in

this case do not support a finding that Weber knew that he had suffered an injury as a result

of Mathes’s conduct prior to the Court of Appeals’s affirmation of the trial court’s dismissal.

Weber’s affidavit makes this point quite clear:

              I either met, or conferred by phone, with Ms. Mathes, or her
              associate, on many occasions. After suit was filed, I learned
              from Mathes that the defendant had filed a Motion to Dismiss.
              The defendant claimed that the statute of limitations had
              expired.
              Mathes did not advise me to seek the advice of independent
              counsel about a claim that I would have against her for legal
              practice. To the contrary, Mathes assured me that the Motion
              was meritless, and was a stalling tactic by Jefferson Pilot. She
              said not to worry about the Motion, she reassured me that my
              action had been timely filed. She insisted that the issue had
              been carefully researched before the case was filed.
              The Motion was set for a hearing. Mathes was not present and
              sent an associate to argue the Motion. Even before the
              hearing, Mathes continued to tell me that the Motion had no
              merit. At the conclusion of the hearing, the Motion was granted,
              and my case dismissed.
              I then met with Mathes. . . . Mathes stated in unequivocal terms
              that the trial court’s ruling was wrong, and would be summarily
              reversed on appeal.           She further stated that Chancellor
              Alisandratos was the most reversed judge in Shelby County,
              and that he just did not really understand Tennessee law on this
              issue.



                                                                                                  Page 11
               She continued to assure me that we would prevail on appeal
               while the appeal was being perfected. From the date of the trial
               court’s dismissal until the date of the ruling of the Court of
               Appeals, she never advised me to seek the advice of
               independent counsel, or that I had a potential malpractice claim
               against her. While the appeal was pending, an offer of
               settlement was tendered by Jefferson Pilot. The offer was
               viewed by us as being “nuisance value” only. However, Mathes
               told me that the fact that an offer of any sort was being made
               reinforced her position that the trial court was wrong, and the
               decision would be reversed.

       Mathes filed an affidavit which did not contradict that she clearly and repeatedly told

Weber that the trial judge had erred in dismissing his action, and that the Court of Appeals

would “summarily reverse[]” the trial court’s dismissal. In Porter-Metler v. Edwards, No.

03A01-9709-CV-00393, 1998 WL 131515, *3 (E.S. Tenn. App. March 25, 1998), this Court

stated in pertinent part:

               Tennessee courts have recognized and held that questions
               involving whether a person’s behavior conforms to a standard of
               reasonable and diligent conduct, such as the second part of the
               malpractice discovery rule test, are questions of fact for a jury,
               unless the facts and the inferences drawn therefrom are so clear
               that reasonable persons could not disagree on the answer.
               (citations omitted).

       We believe that Mathes’ actions and assertions to Weber that the trial court had

erred could cause “reasonable persons” to disagree as to whether Weber knew or should

have known that he suffered an injury due to Mathes’s negligence on the day that the trial

court dismissed his cause of action. We have carefully reviewed the evidence in the record

presented to this Court and conclude that a genuine issue of material fact exists as to

whether Weber knew or should have known more than one year prior to filing this legal

malpractice action that he had suffered an injury as a result of Mathes’ wrongful conduct.

       Accordingly, the order of the trial court denying summary judgment is affirmed, and

the case is remanded to the trial court for such further proceedings as




are necessary. Costs of the appeal are assessed to appellant.             The second issue is



                                                                                                 Page 12
pretermitted.


_________________________________
                                       W. FRANK CRAWFORD,
                                       PRESIDING JUDGE, W.S.

CONCUR:


____________________________________
DAVID R. FARMER, JUDGE

____________________________________
HOLLY KIRBY LILLARD, JUDGE




                                                               Page 13
