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January 2019

Nevada Supreme Court Rules in Favor of Firm Client Establishing New Law on the Statute of Limitations

Gordon Rees Scully Mansukhani counsel Craig Mariam, Rob Larsen, and Wing Yan Wong successfully defeated and further prevailed upon the opposing side’s appeal to the Supreme Court a high stakes legal malpractice lawsuit involving risk exposure of many millions of dollars and in doing so created a new test for the accrual of the statute of limitations for litigation malpractice claims in Nevada.

Arising in the middle of the economic recession, the underlying case concerned the priority of competing deeds of trust encumbering a real estate. Gordon & Rees' clients represented a bank which held a $43 million deed of trust encumbering the property. At trial, the court found that the bank did not have standing because the contract document did not include schedules showing the assignment of the deed of trust. As a result, the bank’s deed of trust was extinguished.

The bank unsuccessfully appealed the underlying case to the Nevada Supreme Court and then unsuccessfully sought certiorari with the United States Supreme Court for certiorari. Two years later the bank sued Gordon & Rees’ clients for legal malpractice.  

Gordon & Rees attorneys obtained a dismissal of the malpractice case on statute of limitations grounds. The bank appealed the dismissal, ultimately to the Nevada Supreme Court. Nevada utilizes a litigation malpractice tolling rule where the statute of limitations does not begin to run until all appeals are complete.  However, no cases addressed the effect of a discretionary writ petition to the United States Supreme Court.

Adopting Gordon & Rees' arguments, the Nevada Supreme Court, in a published decision, created a new bright-line test of when the statute of limitations for a litigation malpractice case accrues.

To read the Nevada Supreme Court's opinion in full, please click here.

 

Robert S. Larsen
Craig J. Mariam
Wing Yan Wong