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Keywords

defendantdamagesattorneyliabilitystatuteappealtrialmalpracticeleasepartnershipstatute of limitationslegal malpractice
plaintiffdefendantattorneyliabilitystatutetrialmalpracticeleasepartnershipstatute of limitationslegal malpractice

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Adell v. Sommers, Schwartz, Silver and Schwartz, P.C., 170 Mich.App. 196, 428 N.W.2d 26

Facts

In January 1972, Robert Adell invested in the Troy Hilton Motor Inn Company, a limited partnership, with Gordon as the general partner and attorney. Gordon informed the partners in March 1974 that the IRS was challenging the partnership's tax structure, which led to notices of deficiency for the partners in April 1975. Adell settled with the IRS in 1985 after paying significant taxes and filed a complaint against the defendants in October 1985, alleging various claims including legal malpractice.

In January, 1972, plaintiff entered into a limited partnership known as the Troy Hilton Motor Inn Company. Defendant Gordon acted as general partner and attorney for the partnership.

Issue

Did the mutual release bar the investor's claims against the general partner, and was the investor's legal malpractice claim timely filed?

The court needed to resolve whether the mutual release barred the investor's claims against the general partner and if the legal malpractice claim was timely.

Rule

A release of liability is valid if it is fairly and knowingly made, and a limited partner may bring individual claims against attorneys for malpractice related to the partnership.

A release of liability is valid if it is fairly and knowingly made.

Analysis

The court determined that the mutual release did not bar Adell's claims against Gordon because the release explicitly allowed for claims related to the formation of the partnership. The court also found that Adell had standing to sue the law firm for malpractice, as he was a limited partner entitled to pursue individual claims. However, the court concluded that the legal malpractice claim was barred by the statute of limitations, as Adell should have discovered his damages in 1975 when notified by the IRS.

The court applied the rule by determining that the mutual release did not bar Adell's claims against Gordon and that he had standing to sue the law firm, but the legal malpractice claim was barred by the statute of limitations.

Conclusion

The Court of Appeals affirmed the trial court's decision, holding that the mutual release did not preclude the action against Gordon, but the legal malpractice claim was barred by the statute of limitations.

The court's final decision was to affirm the trial court's ruling in favor of the defendants.

Who won?

Defendants prevailed in the case because the court found that the legal malpractice claim was barred by the statute of limitations.

Defendants prevailed in the case because the court found that the legal malpractice claim was barred by the statute of limitations.

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