The Interplay Between Michigan’s Legal Malpractice Statute of Repose and the Minority/Insanity Tolling Statute
I write this piece as we all hope and pray for peace and healing in Israel.
The question I wish to address here, which I hope may be of assistance to some, is whether an impaired plaintiff may wait 30 years before launching a collateral attack on an underlying settlement, after documents have been destroyed, memories have been forgotten, witnesses have died, and all participants have thought for decades that they had closure and finality. Intuitively, the answer would seem to be an obvious “no.” In Michigan, however, it’s not so simple.
We are currently defending a case where the plaintiff’s ward suffered permanent injuries in a house fire in the late 80’s. The ward, represented by our client, brought a personal injury action alleging that a defective gas stove had caused the fire. That case ultimately resolved, and the case was closed in 1994. In a follow-on legal malpractice action filed earlier this year, the plaintiff alleges that our client committed errors and omissions in its handling of the underlying settlement.
We filed a motion for summary disposition, arguing that Michigan’s statute of repose bars the plaintiff from proceeding. (We also made a laches argument, which I won’t discuss here.) In a nutshell, the two-year statute of limitations for legal malpractice claims is tolled by Michigan’s minority/insanity statute because of the impairment of the plaintiff’s ward. But the Michigan Legislature in 2013 enacted a six-year statute of repose, designed to protect lawyers from stale claims. Unlike the statute of limitations, the statute of repose bars a claim after a fixed period of time from the defendant’s alleged act or omission and may prevent accrual of a claim even if the injury happens after the statutory period has expired.
In our case, the plaintiff’s claim is based on a settlement that was reached in 1994, meaning that the limitations period on any legal malpractice claim arising out of the settlement expired in 1996, and the statute of repose expired in 2000, or 23 years before the plaintiff filed suit.
In response, the plaintiff argued that the statute of repose does not apply retroactively to bar claims that accrued prior to its effective date of 2013 and consequently her claim is still timely thanks to the minority/insanity tolling statute. Alternatively, she argued that the minority/insanity statute tolls not only the statute of limitations but also the statute of repose, so her claims are timely in any event. In our case, the judge heard oral argument and took our motion under advisement, ordering the parties to conduct some limited discovery into what and when the plaintiff knew about the legal malpractice claims and into the ward’s eligibility to seek protection under the minority/insanity statute.
To our knowledge, there has been one published Michigan appellate court decision on the issue of the retroactivity of the statute of repose, but it has not been uniformly applied, and there are no decisions on the issue of whether the minority/insanity statute tolls the statute of repose. Until there is clarity from the appellate courts, the plaintiff’s bar may continue to bring decades-old legal malpractice claims, where the parties will be forced to reconstruct the underlying facts with only a fraction of the documents and witness memories that once existed. Rather than engage in nearly impossible discovery efforts, the defendant may wish to make the argument that the claims are time-barred.