LITTLE ROCK, Ark. (Legal Newsline) - Lawyers don’t have to adhere to the fiduciary duties that apply to other professionals like doctors and investment advisors, the Arkansas Supreme Court ruled, upholding the dismissal of a malpractice suit against attorneys who missed a deadline for filing their client’s case but remained silent until it was too late for her to sue them over the error.
The decision drew a strong dissent from two justices, who said the majority extended “protection and favoritism” to their fellow lawyers even as the law holds other professionals to higher standards. Doctors can be held liable for failing to tell their patients about foreign objects they left in their bodies, for example, and investment professionals have a fiduciary duty to keep their clients informed.
“Silence amounts to a positive act of fraud when there is a confidential or fiduciary relationship,” wrote dissenting Justice Shawn Womack.
Rebecca Nichols hired lawyers James Swindoll and Chuck Gibson to represent her after her tractor-trailer rolled over in a 2014 accident she blamed on improper loading. The lawyers filed her case on Sept. 21, 2017, but failed to serve the defendants within the 120-day deadline, allowing the statute of limitations to expire.
Instead of telling Nichols about their mistake, the lawyers continued to file amended complaints in 2018 and 2019, knowing they were useless. In March 2020, Nichols said Swindoll told her he and Gibson had committed a separate act of malpractice but never told her about the initial failure to serve the defendants.
Finally, in February 2021, Nichols sued her lawyers. But the trial court dismissed her case, saying she had missed the three-year statute of limitations by a month. Nichols appealed, but the Arkansas Supreme Court upheld the dismissal in a June 8 decision written by Justice Karen Baker.
Nichols failed to establish an essential element of her claim, the majority held, which is that “not only must there be fraud, but the fraud must be furtively planned and secretly executed so as to keep the fraud concealed.” The court cited another of its decisions upholding the dismissal of a malpractice suit against tax attorneys who filed a tax-clearance letter with the wrong identification number, causing their client to incur hefty charges.
Justices Womack and Barbara Webb dissented, saying “we have an opportunity to hold attorneys to the same standard as other fiduciary and confidential relationships. Yet we extend protection and favoritism to our own profession, while rightly withholding it from others.”
They cited a 1996 Supreme Court decision holding a doctor had an “obvious professional, positive duty to speak” if he left a foreign object in a patient. The Restatement (Third) of the Law Governing Lawyers stays lawyers must keep their clients “reasonably informed about the status” of their cases and if their actions create a malpractice claim they “must disclose that to the client.” The Restatement specifically cites the example of a client who fails to file a client’s suit within the statute of limitations period.
The dissenters cited a judge who dissented from the trial court’s decision to dismiss Nichols’ case: “Surely a client is not required to maintain a double layer of lawyers to ensure that the fiduciary responsibilities of the primary lawyer are being honored.”