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Skadburg v. Gately

Court of Appeals of Iowa

January 10, 2018

MICHELLE R. SKADBURG, Plaintiff-Appellant,
v.
GARY GATELY and WHITFIELD & EDDY, P.L.C., Defendants-Appellees.

         Appeal from the Iowa District Court for Cerro Gordo County, Rustin T. Davenport, Judge.

         Michelle Skadburg appeals from summary judgment granted to the defendants in this legal-malpractice action.

          Peter C. Riley of Tom Riley Law Firm, P.L.C., Cedar Rapids, for appellant.

          Lylea Dodson Critelli and Nick V. Critelli Jr. of Critelli Law, P.C., Des Moines, for appellees.

          Considered by Danilson, C.J., and Tabor and McDonald, JJ.

          DANILSON, CHIEF JUDGE.

         Michelle Skadburg appeals from summary judgment granted to the defendants in this legal-malpractice action. We conclude there remains a genuine issue of material fact as to when Skadburg knew of the cause of action and, thus, when the statute of limitations on this action began to run. Summary judgment should not have been granted, and we reverse and remand.

         I. Undisputed Facts.

         The following facts are not in dispute. Barbara Haffner died on August 20, 2008. Skadburg is Haffner's sole heir and she was the designated beneficiary of Haffner's life insurance policy ($20, 000) and a 401k account ($87, 054.65).

         On November 6, 2008, Skadburg was appointed as administrator of Haffner's estate and Gary Gately of Whitfield & Eddy, P.L.L.C. was designated as attorney for the administrator.

         Upon the advice of counsel, Skadburg used funds she received as the designated beneficiary of exempt proceeds to pay Haffner's outstanding bills and other expenses.[1] Ultimately, it was determined the estate was insolvent as the debts exceeded the assets. Because the estate and Skadbury, as the administrator, only had to pay the estate's debts to the extent of the assets, her use of her exempt funds to pay her mother's debts gave rise to her claim of malpractice.

         With respect to the payment of debts, Skadburg and Gately had several communications by email during the pendency of the estate administration. In a January 30, 2009 email to Gately, Skadburg wrote:

Anyway, this news today was kind of sickening for me. I would like to think I would have done the right thing and paid off her debts even if l wasn't legally obligated to . . .,
I should have given you the entire list of debts and asked for more specific advice on what to do, but I took you at your word to pay the debts and did that. Anyway it was her money and her debt and no use second guessing now as they have been paid and that is that.
In a December 30, 2009 email to Gately, Skadburg wrote,
As far as the fees, Tom [Reavely] had told me when this started that he would charge me $200-300 to do this. I do realize there has been more work involved so I am willing to negotiate on this, but I will be honest, not willing to pay the usual fee. . . . It seems there has been miscommunication in all of this. Paying off mom's debt with money that should not have been part of the estate was one of the issues that has arisen. Gary and I have talked through this and what is done is done, but please take these kinds of things into consideration when setting the fee.

         In a March 26, 2010 note to Gately, Skadburg wrote, "One other question-is any of the money paid to the creditors refundable since those should not have been paid out of the estate assets?"

         On August 18, 2010, the probate court entered an order approving the administrator's final report, discharging the administrator, and closing the estate.

         In a letter dated August 31, 2010, Gately wrote to Skadburg: "Enclosed for your records is the Order of the Court Approving Final and Supplemental Final Reports and discharging Administrator. In essence, this is the final step and the estate is now closed and you are discharged as the Administrator."

         On August 19, 2015, Skadburg filed a petition at law asserting Gately was negligent in his representation of the administrator. Gately answered, asserting the action was barred by Iowa Code section 614.1 (2007), which provides a five-year statute of limitations. Gately filed a motion for summary judgment, asserting the action was filed beyond the statute of limitations. Gately asserted the latest date on which the action accrued was August 18, 2010, and therefore, even calculated most favorably to Skadburg, the August 19, 2015 filing of the action was one day after the limitations period had run.

         Skadburg resisted, asserting the petition was "submitted to the clerk of court on August 18, 2015, " and Gately represented Skadburg "with regard to the probate of the Estate . . . until August 31, 2010."

         The district court concluded Skadburg knew Gately had given her incorrect advice regarding the administration of the estate on December 29, 2009, as evidenced by her email. Alternatively, the court concluded she demonstrated actual or imputed knowledge that Gately had given her incorrect advice on March 26, 2010, as evidenced by her statement in the email-"since those should not have been paid out of the ...


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