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North Carolina Court Reinstates Malpractice Action On Appeal

This is a case of litigation malpractice. In Best Choice Products, Inc. v. Hendrick, Bryant, Nerhod, Sanders & Otis, Ltd, No. COA21-163, the Court of Appeals of North Carolina reinstated a legal malpractice action. Law Firm had represented Best Choice in an underlying case. According to the Complaint, the Law Firm failed to produce certain documents in the underlying case and the case was dismissed. The opinion at paragraph 4 quotes the key allegations of the Complaint:

¶ 4 On 20 July 2020, Best Choice filed its complaint against Defendants for professional malpractice. Best Choice attached to its complaint as exhibits the summary judgment order entered 24 July 2017, and an order granting sanctions on 25 January 2018 from the Prior Lawsuit. Best Choice made several allegations in its complaint relating to Defendants’ negligent representation and listed specific instances in which Defendants failed to meet the standard of care in rendering legal services in the Prior Lawsuit, which it designated as “Defendants’ Failures.” Best Choice made the following allegations pertinent to our review:

33. Defendants’ Failures continued in the Prior Lawsuit through the Orders referenced below, prevent Best Choice from avoiding or mitigating the adverse consequences imposed by the Orders.


43. Defendants’ Failures continued through the entry of the attached Orders and prevented any possibility of avoiding, rectifying or mitigating the excessive damages and sanctions imposed on Best Choice, all of which it has paid.

The trial court dismissed the case on the ground that the statute of limitations had expired. The Court of Appeals reversed. It reasoned that the lawsuit was timely based on the allegations contained in the Complaint.

¶ 14 Here, like in Southeastern Hospital Supply, Best Choice alleged in its complaint Defendants’ malpractice continued until the entry of the final order on 24 July 2017. See id. at 653, 430 S.E.2d at 471. The last act of Defendants giving rise to the cause of action may have occurred as late as 24 July 2017 based upon the allegations in the Complaint, and as a result, the cause of action may not have accrued until that time. See N.C. Gen. Stat. § 1-15. Although the order attached to the complaint as an exhibit discloses specific dates which may be helpful in determining the last act giving rise to Best Choice’s cause of action, we do not find the dates dispositive in our determination of whether the motion to dismiss was properly granted. In treating the allegations in the complaint as true, we cannot say Best Choice failed to state a claim upon which relief could be granted. See Carlisle, 169 N.C. App. at 681, 614 S.E.2d at 547 (stating a complaint is sufficient to withstand a Rule 12(b)(6) motion to dismiss when “as a matter of law, the allegations of the complaint, treated as true, are sufficient to state a claim upon which relief may be granted under some legal theory”). We conclude Best Choice’s claim may not be barred by the three-year statute of limitations for legal malpractice actions based upon the allegations in the Complaint and was improperly dismissed pursuant to Rule 12(b)(6). See Se. Hosp. Supply Corp., 110 N.C. App. at 654, 430 S.E.2d at 471; N.C. Gen. Stat. § 1-15(c).

Comment: The two best defenses a lawyer has against a malpractice action are (a) the statute of limitations or (b) the plaintiff cannot establish proximate causation. This plaintiff, depending on the proof, may be able to show that the lawsuit was timely, thus avoiding one of the two major defenses to a malpractice lawsuit.

If you have a question about a legal malpractice claim, do not hesitate to call me.

Ed Clinton, Jr.

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