Summary
The Supreme Court of Montana affirmed summary judgment for former officers and legal counsel of Chief Dull Knife College in claims arising from the transfer of college assets to a nonprofit foundation. The court held that the legal malpractice and breach-of-fiduciary-duty claims were barred by the applicable statutes of limitation. The memorandum decision was designated noncitable under the Montana Supreme Court's internal operating rules.
Topics
Practice areas
Questions Presented
- Whether the College's legal-malpractice claims against Torske were barred by the applicable three-year statute of limitations.
- Whether the College's breach-of-fiduciary-duty claims against McDonald and Pond were barred by the applicable three-year statute of limitations.
- Whether the district court properly granted summary judgment on statute-of-limitations grounds.
Holdings
- The legal-malpractice claims against Torske were untimely because the College should have discovered the alleged wrongful conduct and resulting damage when the transfer documents were created in the early 1990s, and the complaint was not filed until May 17, 2002.
- The breach-of-fiduciary-duty claims against McDonald and Pond were time-barred because any breach occurred during their tenure as College officers, which ended in August 1995, and the three-year limitations period expired by August 1998.
Key quotations
“Hence, the statute of limitations in a legal malpractice action does not begin to run until the negligent act was, or should have been discovered, and all elements of the legal malpractice claim, including damages, have occurred.” (¶ 7)
Factual background
In the 1990s, Chief Dull Knife College created the Morning Star Memorial Foundation and transferred approximately $1.7 million to $2 million of College assets to it. College officials became concerned in 1995 that the assets were disappearing and requested an accounting and return of the assets. The Foundation refused, asserting that the assets had been gifted. The College filed suit in May 2002, alleging legal malpractice against former counsel James Torske and breach of fiduciary duties against former officers Arthur McDonald and Doreen Pond.
Procedural history
The College filed claims in May 2002 arising from the creation of the Morning Star Memorial Foundation and transfer of College assets, including legal malpractice claims against Torske and breach-of-fiduciary-duty claims against McDonald and Pond. The Sixteenth Judicial District Court, Rosebud County, granted summary judgment for all defendants, concluding that the claims were barred by the applicable statutes of limitation. The Montana Supreme Court affirmed.