The U.S. Court of Appeals for the Eighth Circuit has reversed the dismissal of a legal malpractice case, which had been dismissed below based on a statute of limitations bar. In Joyce v. Armstrong Teasdale, LLP, a client sued a law firm, which represented him and a company jointly owned with his wife and had prepared patent and licensing documents granting the company exclusive rights to sell a computer firewall technology he had invented.
Seven years later the client and his wife divorced, which resulted in the client losing one half of his rights in the patent. The client sued the law firm in Missouri Federal Court, claiming that the firm had negligently prepared the agreements, which resulted in the loss of his rights.
The firm moved to dismiss claiming the action was barred by Missouri’s five year statute of limitationsi. The District Court below granted the motion, finding that the client’s damages were ascertainable when he first signed the license agreement. The client appealed.
The Eighth Circuit ruled that the client could not have discovered his injuries prior to the divorce because the law firm had advised him, at the time of signing, that his interest would not be harmed in a divorce. The Court also found that nothing outside of the existing attorney-client relationship could have put him on notice that the agreements as drafted would cause him harm. Thus, the statute began to run only when the injury occurred and the action was not barred. The Court remanded the case for further proceedings.
Decision: Joyce v. Armstrong Teasdale, LLP
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