Attorney Malpractice Statute of Limitations Notice of Injury Tolling
Communications Network Intl., Ltd v. Mullineaux et al., PICS Case No. 17-1063 (C.P. Philadelphia July 10, 2017) McInerney, J. (12 pages).
While it appeared that plaintiff's counsel may have violated the standard of care on multiple occasions, plaintiff failed to file this legal malpractice action in a timely manner and there were no applicable tolling provisions to save the claims. The court recommended affirmance of its order granting defendants summary judgment.
In February 2001, MCI WorldCom Communications, Inc., sued Communications Network International, Ltd. (CNI), for breach of contract. CNI hired attorney William M. Mullineaux to represent the company in the litigation. Mullineaux filed an answer and counterclaim asserting a breach of contract claim against WorldCom for "slamming," i.e., the theft of telephone customers. WorldCom filed for bankruptcy protection in July 2002; thus, the bankruptcy court adjudicated the dispute between WorldCom and CNI. In 2006, the bankruptcy court dismissed all CNI's claims, finding that they were precluded by the "filed rate doctrine." The court also found that CNI had alleged that WorldCom engaged in slamming practices without asserting supporting facts. A district court affirmed the bankruptcy court's findings in October 2010. Mullineaux filed an untimely appeal, which was dismissed. On Dec. 19, 2014, CNI filed this legal malpractice suit against Mullineaux and the firms he worked for while representing CNI. Defendants moved for summary judgment, asking the court to dismiss the claims based on the running of the four-year statute of limitations applicable to contracts and the two-year statute of limitations applicable to torts. The court granted defendants' motion. CNI filed an appeal, prompting the court's opinion. According to the court, it appeared that CNI's former attorney may have violated the standard of care on multiple occasions; however, the statutes of limitations on CNI's claims began to run when the bankruptcy court ruled against the company in 2006. CNI received the district court's order on Oct. 28, 2010. Company representatives knew or should have known by that date that they had been injured, the court observed. CNI did not file this action until four years and 42 days after the company received the district court's 2010 opinion. Thus, both its tort and contract claims based upon Mullineaux's alleged failure to properly plead the slamming claims were time-barred. CNI argued that the statutes should be tolled due to Mullineaux's alleged concealment of the bankruptcy court's 2006 findings that he had inadequately pleaded the slamming claim and failed to understand the filed rate doctrine. The court noted, however, that CNI's principals should have read the 2006 bankruptcy opinion. Moreover, even if CNI's principals were somehow misled by Mullineaux about the contents of the 2006 opinion, they should have known of their alleged injury by Oct. 28, 2010, when they received the district court's order. The fact that Mullineaux continued to represent CNI on appeal from the adverse decision did not toll the statutes of limitations, the court observed.