MALPRACTICE LAWSUIT SC: Legal profession covered by 6-year limitation statute

The Supreme Court upheld Wednesday a lawsuit filed by the Bank of Saipan against the law office of Carlsmith Ball Wichman Case & Ichiki, as it ruled that the legal profession is governed by the six-year statute of limitations.

The statute of limitations determines the period in which a case can be filed in and entertained by the court. A case barred by the two-year statute of limitations will not be tried by the court if it was filed two years after the event related to the case took place.

The Supreme Court noted that the Commonwealth Code provides for a two-year statute of limitations for the medical profession, but not for legal profession.

The Commonwealth Code says that all other causes of actions not included in the two-year limitations statute fall under the six-year limitations.

The Bank of Saipan filed the civil action at the Superior Court against the Carlsmith law firm last year alleging fraud, intentional misrepresentation, suppression of fact, negligent misrepresentation, attorney malpractice, and representation of adverse interests.

The case was removed from the local court and transferred to the U.S. District Court, where Carlsmith filed a motion seeking the dismissal of the case on grounds that it was barred by a two-year statute of limitations.

The federal court, however, stayed Carlsmith’s motion in February of this year after tossing the question of the statute of limitations to the CNMI Supreme Court.

The Supreme Court agreed that an attorney who fails to perform professional duties result in actual loss to the client is liable for the damages sustained.

The high court said Carlsmith may not invoke the statute of two-year limitations in blocking the civil action because the Commonwealth Legislature did not develop a specific statute for legal malpractice.

“The relevant statute determining the time period in which to file an attorney malpractice claim would therefore place such a claim under the shorter statute or under the catch-all six-year general statute,” the high court said.

“The fact that the legislature purposely included medical malpractice yet did not mention legal malpractice is significant,” the court said.

It added that the six-year statute of limitations exists to “include all actions not enumerated by the legislature.”

“By not specifying a professional malpractice cause of action while very specifically enunciating causes of actions included, the legislature has expressed an intent to exclude legal malpractice from [the two-year limitations statute},” the high court said.