SPOKOINY v. GUARNERO, 143 Wn. App. 1050 (2008)

Affirmedby unpublished opinion per Grosse, J., concurred in by Schindler, C.J., and Cox, J.

In this, an action for legal malpractice, any continuing representation by the defendant ceased not later than July 2002, more than three years prior to February 2006, the date the complaint was filed. Hence, the trial court was correct in holding the claim barred by the statute of limitations. We affirm. In July 2000, Ricardo Guarnero filed a medical malpractice action on behalf of Elizabeth Spokoiny against several doctors and Overlake Hospital for failure to diagnose and treat an alleged autoimmune disorder. The trial court dismissed her claims against Overlake Hospital and several of the doctors (collectively, Overlake) for Spokoiny's repeated failure to comply with discovery orders. The trial court also dismissed her action against another group of doctors (collectively, Stroh) for failure to provide expert testimony that Stroh breached the applicable standard of care. Spokoiny filed an appeal to this court. Guarnero was one of her attorneys on appeal. In an unpublished opinion issued April 8, 2002,¹this court found the appeal of Stroh's dismissal frivolous and awarded the Stroh defendants attorney fees and costs. Because the trial court did not affirmatively state on the record that Overlake was substantially prejudiced by Spokoiny's failure to comply with the discovery orders as required in a recent Supreme Court decision,²this court reversed and remanded the action against Overlake. However, the action against Overlake was subsequently dismissed by the trial court without opposition on February 19, 2003.

In a letter dated May 6, 2002, sent by facsimile at 2:00 AM, Larry Spokoiny (Elizabeth Spokoiny's spouse and attorney in the present action) expressed to Guarnero his and his wife's dissatisfaction with Guarnero's actions to date:

Elizabeth put her trust in you, and up until now, you have let her down. You failed to return the majority of her phone calls, emails and instant messages. You moved offices without letting her know of your whereabouts. You have not kept her apprised of the status of HER case. Even your notice of the decision on appeal came over 2 weeks after the opinion was issued. Having a busy work schedule or inadequate staff help does not excuse what has occurred.

The letter further requested that Guarnero file an appeal of this court's decision.

Guarnero responded the same day, stating:

By delaying your response to my office and declining my suggestion to meet and further discuss these issues, you have left me no choice but to advise you herein as to the basis for my recommendation and to make a decision that I believe is appropriately within my professional judgment. Elizabeth and Larry, my offices have tried to diligently proceed with your claims. On numerous occasions, you have failed to provide my offices the information we needed to continue. You refused to answer interrogatories fully and completely, against my advice. You were determined to act as your expert, against my advice. Now, you have refused to discuss the risk attendant in a Petition for Review with my offices. This does not permit me to take the action you seek.

Unless you advise me otherwise, I understand that I am still your attorney of record on this matter and that you wish for me to oppose the pending fee petition and/or upon the issuance of the mandate and remand of the complaint against Overlake. Please communicate your intentions as to these issues with me in writing or by telephone at the earliest opportunity.

On May 16, 2002, a commissioner of this court awarded Stroh $18,264.00 in attorney fees and $181.85 in costs. On June 17, 2002, Spokoiny, now represented by her husband, Larry Spokoiny, moved for modification of the commissioner's ruling. In that motion, Spokoiny requested the court assess punitive sanctions against her attorneys, Guarnero and Patricia Rose,³based upon their improper conduct in the case. Larry Spokoiny argued that "[b]oth of her attorneys [, Guarnero and Rose,] have indicated their intent to withdraw from the case because they do not want to be personally liable for the sanctions." In support of that motion, Elizabeth Spokoiny submitted an affidavit signed on June 17, 2002, in which she stated that both of her attorneys had independently informed her that they would be withdrawing from the case. She further averred:

Due to Mr. Guarnero's egregious conduct, the Stroh Defendants are now completely off the hook, and I face an uphill battle to keep the case against the Overlake Defendants alive. What began as a valid medical malpractice case has been undermined by Mr. Guarnero's continuing neglect and indifference, and exacerbated by his half-hearted attempts to recover from his mistakes. I have already suffered the ultimate sanction in having a major part of my case dismissed, and the remaining part hanging by a thread.

On June 24, 2002, Larry Spokoiny entered a formal notice of appearance in the medical malpractice case before the Court of Appeals. That notice was sent to opposing counsel as well as to Guarnero and Rose. Guarnero submitted an affidavit in response to Spokoiny's motion to assess punitive damages, denying any wrongdoing. Further, because of a potential conflict of interest, Guarnero advised the court of his need to withdraw.⁴Stroh also filed an opposition to the motion to modify the commissioner's ruling in which Stroh argued that any claims that Spokoiny had against her counsel should be resolved in another forum. A panel of three judges from this court denied Spokoiny's motion.

Larry Spokoiny then filed a petition for review with the Supreme Court which was denied by a commissioner on November 6, 2002. The denial stated in part:

To that point in the appeal, Ms. Spokoiny had been represented by her original trial and appellate counsel, Ricardo Guarnero. . . . But when Ms. Spokoiny filed a motion to modify the commissioner's ruling on June 27, that pleading was signed by "Larry Spokoiny, acting attorney."

Almost four years later, Larry Spokoiny, on behalf of his wife, filed a legal malpractice action against Guarnero on February 21, 2006. On April 21, 2006, Lawrence Kahn substituted as attorney for Larry Spokoiny. Kahn obtained an order of default on August 21, 2006. Two days later, Kahn wrote a letter to Guarnero's malpractice insurer enclosing a copy of the default order. Guarnero's carrier then entered a notice of appearance on behalf of Guarnero and successfully moved to set aside the default order. Kahn withdrew from representation of Spokoiny on November 16, 2006. On November 22, Guarnero moved for summary judgment dismissal asserting, inter alia, that the lawsuit was barred by the statute of limitations. The trial court granted summary judgment dismissal. Spokoiny appeals, contending the trial court erred in granting Guarnero's summary judgment suit and denying her subsequent motion for reconsideration. Spokoiny further argues that the court erred in setting aside the order of default. Statute of Limitations

Pursuant to RCW4.16.080(3), an action for legal malpractice must be commenced within three years.⁵A cause of action accrues when the plaintiff is on notice of facts giving rise to the claim. "`[O]ne who has notice of facts sufficient to put him upon inquiry is deemed to have notice of all facts which reasonable inquiry would disclose.'"⁶Spokoiny's medical malpractice suit was dismissed in 2001.⁷Yet, Spokoiny did not file suit until 2006, more than five years after her cause of action accrued.

The discovery rule applies to legal malpractice actions; i.e., the cause of action accrues when the client discovers or, in the exercise of reasonable diligence should have discovered, the facts which give rise to the cause of action.

Spokoiny argues that the statute of limitations is tolled because of the continuous representation rule. The continuous representation rule was adopted by this court inJanicki.Under this rule, "the statute of limitations on an attorney malpractice claim is tolled during an attorney's continuous representation of the client in the same matter from which the malpractice claim arose."⁸The purpose of the rule is to avoid unnecessarily disrupting the attorney-client relationship. It permits the attorney to remedy any mistakes that may have been made and, at the same time, prevents the attorney from maintaining a relationship to prevent a cause of action.

The rule is inapplicable here as there is no continuous relationship between Spokoiny and Guarnero. In an affidavit supporting her opposition to the dismissal of the default order, Spokoiny avers that Guarnero never withdrew from representation "either formally by notice of withdrawal or informally by notice to [her]." However, this is in direct contradiction to her declaration made previously in support of her motion to modify the commissioner's ruling four years earlier in the underlying medical malpractice matter in which she stated that both her attorneys had independently informed her that they would be withdrawing from the case. Moreover, after this court entered its opinion in the underlying medical malpractice matter and the commissioner ruled on attorney fees, Larry Spokoiny entered a notice of appearance and handled further appeals in the matter, including the petition for review. Reasonable minds could not differ about when Spokoiny knew or should have known the facts giving rise to her legal malpractice claim against Guarnero.Order of Default

A trial court retains authority to set aside default orders and the decision to set aside an order of default lies within its discretion.⁹CR 55(c)(1) provides:

For good cause shown and upon such terms as the court deems just, the court may set aside an entry of default, and if a judgment by default has been entered, may likewise set it aside in accordance with rule 60(b).

In setting aside default judgments, courts consider four factors: (1) substantial evidence to support at least a prima facie defense to the claim; (2) moving party's failure to timely appear was occasioned by mistake, inadvertence, surprise or excusable neglect; (3) that the moving party moved with due diligence after receiving notice of the default judgment; and (4) that no substantial hardship will result to the opposing party.¹⁰All four factors need not be given equal weight.¹¹

First, Guarnero put forth a prima facie defense that the action was barred by the statute of limitations. As a matter of law, Spokoiny was on notice that she was damaged when the trial court entered an adverse decision against her by dismissing her medical malpractice action.¹²Second, Guarnero mistakenly believed that his discharge in bankruptcy covered any liability arising from this case. Third, Guarnero diligently moved to set aside the order of default. As soon as Guarnero's insurance carrier received notification, counsel entered a notice of appearance on Guarnero's behalf and attempted to negotiate a stipulation to set aside the order. As to the fourth factor, Spokoiny has shown no prejudice resulting from setting aside the order of default. "The possibility of a trial is an insufficient basis for the court to find substantial hardship on the nonmoving party."¹³Here, the trial court acted within its discretion in setting aside the order of default.

Because the trial court did not err in setting aside the order of default and the statute of limitations bars the medical malpractice action, this court need not address the alternative arguments supporting the trial court's issuance of summary judgment dismissal.Attorney Fees

Guarnero requests attorney fees under RAP 18.9(a) for having to defend a frivolous appeal. RAP 18.9(a) provides, "[t]he appellate court on its own initiative or on motion of a party may order a party . . . who . . . files a frivolous appeal . . . to pay terms or compensatory damages to any other party who has been harmed." "A frivolous appeal is one which, when all doubts are resolved in favor of the appellant, is so devoid of merit that there is no chance of reversal."¹⁴Here, there is no merit to Spokoiny's appeal. We award attorney fees in favor of Guarnero. A commissioner of this court will determine the amount of the award.

The trial court is affirmed.

WE CONCUR: