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Packgen, Inc. v. Bernstein, Shur, Sawyer & Nelson, P.A.

Supreme Court of Maine

June 6, 2019

PACKGEN, INC.
v.
BERNSTEIN, SHUR, SAWYER & NELSON, P.A.

          Argued: September 11, 2018

          Phillip E. Johnson, Esq. (orally), Johnson, Webbert & Young, LLP, Augusta, for appellant Packgen, Inc.

          George T. Dilworth, Esq. (orally), and Jeana M. McCormick, Esq., Drummond Woodsum, Portland, for appellee Bernstein, Shur, Sawyer & Nelson, P.A.

          Panel: SAUFLEY, C.J., and ALEXANDER, MEAD, GORMAN, JABAR, HJELM, and HUMPHREY, JJ.

          HUMPHREY, J.

         [¶1] In Maine, with exceptions not applicable to this appeal, the Legislature has spoken-a civil action against an attorney for professional negligence, malpractice, or breach of contract for legal services "shall be commenced within 6 years after the cause of action accrues," 14 M.R.S. § 752 (2018), [1] and the cause of action accrues on "the date of the act or omission giving rise to the injury, not from the discovery of the [attorney] malpractice, negligence or breach of contract." 14 M.R.S. § 753-B (2018).[2] The question we address in this appeal is whether the court-made doctrines of continuing representation and continuing negligence should apply in the determination of the date on which a cause of action for legal malpractice accrues under section 753-B.

         [¶2] Packgen, Inc., appeals from a judgment entered by the Superior Court (Cumberland County, Warren, /.) granting the motion of Bernstein, Shur, Sawyer & Nelson, P.A. (Bernstein Shur), to dismiss Packgen's complaint for legal malpractice because Packgen's claim is barred by Maine's six-year statutes of limitations for civil actions, 14 M.R.S. § 752, and attorney malpractice actions, 14 M.R.S. § 753-B. Packgen argues that its claim is not barred because the doctrines of continuing representation[3] and continuing negligence[4] operate to bring the date of the act or omission "giving rise to [its] injury"-Bernstein Shur's failure to serve a proper notice of claim or file a defective-products complaint-within the statute of limitations. 14 M.R.S. § 753-B(1). In the context of actions for attorney malpractice, we decline to adopt either doctrine and affirm the judgment dismissing the complaint as untimely pursuant to 14M.R.S. §§752, 753-B.

         I. BACKGROUND

         [¶3] The following facts are drawn from Packgen's amended complaint and from documents attached to it whose authenticity is not challenged. See Andrews v. Sheepscot Island Co., 2016 ME 68, ¶ 8, 138 A.3d 1197; see also Moody v. State Liquor & Lottery Comm'n, 2004 ME 20, ¶ 11, 843 A.2d 43. We view the facts alleged in the complaint as if they were admitted. See Andrews, 2016 ME 68, ¶ 8, 138 A.3d 1197.

         A. Underlying Federal Case-Packgen v. Covalence

         [¶4] In 2008, Packgen retained Bernstein Shur to prosecute a defective-products claim against Covalence Specialty Coatings, LLC, and Berry Plastics Corporation.

         [¶5] On May 29, 2008, Bernstein Shur sent a letter to Covalence "to provide notice of [Packgen's] claim against Covalence."[5] Although the letter was signed by a Bernstein Shur attorney, it did not set forth the cause of action under oath as is required by 14 M.R.S. § 1602-B(5) (2018). Bernstein Shur did not notice the missing oath, nor did it inform Packgen that a "proper notice of claim [was required] to start the accrual of prejudgment interest" or warn Packgen of "the adverse consequences of failing to serve such a notice" or the need to "promptly file suit ... in order to protect Packgen's prejudgment interest rights." In the three years that followed, Bernstein Shur "made no attempt to serve a valid notice of claim that complied with section 1602-B," "failed to file suit or otherwise diligently pursue the case," and "failed to keep Packgen adequately informed about the status of its case."

         [¶6] In 2011, Packgen retained new counsel and sued Covalence and Berry Plastics in the United States District Court for the District of Maine. On November 13, 2015, a jury rendered a verdict in favor of Packgen in the amount of $7, 206, 646.30, plus interest as allowed by law. Packgen filed an amended motion to alter or amend the judgment to allow post-judgment interest to accrue from May 29, 2008, the date that Covalence purportedly received Bernstein Shur's letter on behalf of Packgen.

         [¶7] On December 11, 2015, while the parties were awaiting the court's decision on the amended motion, Packgen and Bernstein Shur "entered into a tolling agreement pursuant to which any and all legal defenses based on the passage of time and any limitations periods applicable to any claim or cause of action Packgen may possess against [Bernstein Shur] arising out of [Bernstein Shur's] representation of Packgen on claims against [Covalence] and other responsible parties . . . were tolled and would be deemed suspended from running as of December 11, 2015."

         [¶8] On March 7, 2016, the federal court [Torresen, J.) denied Packgen's motion to alter or amend the judgment because Bernstein Shur's letter to Covalence failed to comply with the oath requirement in 14 M.R.S. § 1602-B(5) and therefore did not constitute a valid notice of claim. As a result, Packgen was permitted to recover prejudgment interest dating only from the filing of the complaint in 2011 rather than from May 29, 2008, the date on which Bernstein Shur served the unsworn notice.

         B. Packgen's Claim Against Bernstein Shur

         [¶9] On May 23, 2017, Packgen filed a complaint against Bernstein Shur in the Superior Court alleging that the law firm's failure to send a notice that complied with the requirements of section 1602-B caused Packgen to sustain an economic loss in the amount of $2, 510, 293.84-the difference between the prejudgment interest actually awarded by the federal court and the prejudgment interest that would have been awarded but for Bernstein Shur's negligence.

         [¶10] Bernstein Shur responded with a motion to dismiss the complaint on the grounds that Packgen's claims were barred by the six-year statutes of limitations for civil actions, 14 M.R.S. § 752, and attorney malpractice actions, 14 M.R.S. § 753-B. Bernstein Shur argued that the act giving rise to Packgen's alleged injury-the basis for Packgen's cause of action against it-occurred on May 29, 2008, the date the defective notice was sent to Covalence, and therefore the statute of limitations expired on May 29, 2014, three years before Packgen filed its complaint.

         [¶11] Packgen then filed an amended complaint, asserting that the December 2015 tolling agreement suspended the statute of limitations. Bernstein Shur countered in an amended motion to dismiss that the tolling agreement only saved claims that had not already expired. Bernstein Shur argued that, because the letter was sent on May 29, 2008, the suit alleging negligence in that letter was barred by the statute of limitations regardless of the tolling agreement, which only preserved claims accruing after December 11, 2009, six years prior to the signing of the agreement.

         [¶12] The court concluded that section 753-B(1) barred Packgen's claim and granted Bernstein Shur's motion to dismiss the amended complaint "as to any claim for loss of prejudgment interest prior to the filing of [Packgen's] federal complaint."

         [¶13] The court noted that Packgen "appear[ed] to argue that its claim is not limited to the loss of prejudgment interest because of [Bernstein Shur's] failure to diligently pursue the case and keep Packgen informed of its status constituted legal malpractice 'which caused additional damage to Packgen.' Packgen's amended complaint, however, in no way specifies what additional damage or losses were allegedly caused by [Bernstein Shur's] lack of diligence." (Citation omitted.) The court granted Packgen leave to file a motion to file an amended complaint if it alleged that Bernstein Shur committed professional negligence on or after December 11, 2009, that caused Packgen to incur financial losses other than the loss of prejudgment interest. Packgen did not file such a motion, and the court entered its final judgment dismissing the action on January 24, 2018.

         [¶14] The court rejected Packgen's assertions that the doctrines of continuing representation and continuing negligence operate to save its claim from Bernstein Shur's statute of limitations defense because it determined that such a result would contravene the Legislature's intent in rejecting the discovery rule and adopting the six year statute of limitations in 14 M.R.S. § 753-B(1). Packgen timely appealed. M.R. App. P. 2B(c).

         II. DISCUSSION

         [¶15] Packgen argues that the court erred when it dismissed its claim as untimely because the court limited its analysis to Bernstein Shur's act of sending the defective notice of claim to Covalence on May 29, 2008. It is Packgen's position that Bernstein Shur committed actionable, negligent omissions each day that it failed to send a valid notice or take other action in the case after December 11, 2009.[6]

         A. Standard of Review

         [¶16] "A motion to dismiss tests the legal sufficiency of the complaint," In re Wage Payment Litig., 2000 ME 162, ¶ 3, 759 A.2d 217 (quotation marks omitted), the material allegations of which "must be taken as admitted," Moody, 2004 ME 20, ¶ 7, 843 A.2d 43 (quotation marks omitted); see also Ramsey v. Baxter Title Co., 2012 ME 113, ¶ 2, 54 A.3d 710. When reviewing the grant of a motion to dismiss, "we examine the complaint in the light most favorable to the plaintiff to determine whether it sets forth elements of a cause of action or alleges facts that would entitle the plaintiff to relief pursuant to some legal theory." In re Wage Payment Litig., 2000 ME 162, ¶ 3, 759 A.2d 217; see also McCormick v. Crane, 2012 ME 20, ¶ 5, 37 A.3d 295. A dismissal is only proper "when it appears beyond doubt that [the] plaintiff is entitled to no relief under any set of facts that [it] might prove in support of [its] claim." Moody, 2004 ME 20, ¶ 7, 843 A.2d 43 (quotation marks omitted).

         B. Statute of Limitations

         [¶17] In this case, Packgen challenges the court's interpretation and application of the statute of limitations in attorney malpractice cases. "Whether a claim is barred by the statute of limitations is a legal question subject to de novo review." Estate of Weatherbee, 2014 ME 73, ¶ 14, 93 A.3d 248. "The statute of limitations is an affirmative defense. Unless it is clear on the face of the complaint that the action is barred by the relevant statute of limitations, dismissal on limitations grounds is improper." Jackson v. Borkowski, 627 A.2d 1010, 1013 (Me. 1993) (citation omitted).

         [¶18] In a legal negligence or malpractice action, the six-year statute of limitations begins to run from the date the cause of action accrues, 14 M.R.S. § 752-that is, "from the date of the act or omission giving rise to the injury, not from the discovery of the [attorney] malpractice, negligence or breach of contract," id. § 753-B(1).

         [¶19] In general, "[w]e construe statutes of limitations narrowly." White v. McTeague, Higbee, Case, Cohen, Whitney & Toker, P.A., 2002 ME 160, ¶ 8, 809 A.2d 622. "When a statute already defines accrual ... we are not free to re-define the term," Musk v. Nelson, 647 A.2d 1198, 1201 (Me. 1994); however, "[a]bsent legislative direction, the decision of when a cause of action accrues is a judicial function," White, 2002 ME 160, ¶ 7, 809 A.2d 622.

         [¶20] "In interpreting a statute, our single goal is to give effect to the Legislature's intent in enacting the statute." Dickau v. Vt. Mut. Ins. Co., 2014 ME 158, ¶ 19, 107 A.3d 621. In general, a statute of limitations "should be construed strictly in favor of the bar which it was intended to create." Harkness v. Fitzgerald, 1997 ME 207, ¶ 5, 701 A.2d 370 (quotation marks omitted); see also Dickau, 2014 ME 158, ¶ 21, 107 A.3d 621 ("Among [the principles of statutory construction] is the principle that we must interpret the plain language by taking into account the subject matter and purposes of the statute, and the consequences of a particular interpretation.").

         [¶21] To determine that legislative intent, "we first look to the plain language of the provisions to determine their meaning." Mainetoday Media, Inc. v. State,2013 ME 100, ¶ 6, 82 A.3d 104. "We seek to discern from the plain language of the statute the real purpose of the legislation, avoiding results that are absurd, inconsistent, unreasonable, or illogical. If the statutory language is clear and unambiguous, we construe the statute in accordance with its plain meaning in the context of the whole statutory scheme." Harrington v. State,2014 ME 88, ¶ 5, 96 A.3d 696 (alteration, citation, and quotation marks omitted). "If the plain language of a statute is ambiguous-that is, susceptible of different meanings-we will then go on to ...


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