MI: Underlying IP
Facts: In August 2000, Mr. Rickie Wright hired Ronildo as his attorney in a patent case against the United States Patent and Trademark Office. Three years after hiring Ronildo, Wright was unsatisfied with her work. Wright met with other patent attorneys and on December 18th, 2003 Wright signed a document that revoked Ronildo’s power of attorney. At this time Wright also signed the power of attorney over to another lawyer who then took over the case. Wright also instructed the Patent Office that all correspondence was to go through his new counsel. After key errors were made in the pursuit of this patent, Wright filed a legal malpractice suit against Ronildo on February 16, 2006. The lower court granted summary judgment for Ronildo holding that the attorney/client relationship ended on December 18th, 2003 thereby barring Wright’s action due to the two-year statute of limitations.
Issue: Does the attorney/client relationship end once the client revokes the power of attorney, hires new counsel and reassigns the power of attorney?
Ruling: Yes. Under Michigan law it does not have to be the court that effectively terminates the attorney/client relationship. If Wright had truly wanted Ronildo to stay on as co-counsel there would be no need to revoke her power of attorney. This revocation, along with the hiring and transfer of power of attorney to a new lawyer affirmatively communicated to Ronildo that she had been replaced and the attorney/client relationship had ended. Under MI law, “The client’s action for malpractice is time-barred unless it is brought within two years from the date the claim accrued or arose (i.e., the date that services were discontinued), or within six months of the date that "the plaintiff discovers or should have discovered the existence of the claim, whichever date occurs later.” MCL 600.5805(6); MCL 600.5838(2); Kloian v. Schwartz, 272 Mich. App. 232, 237, 725 N.W.2d 671 (2006). Therefore Ronildo’s motion for summary disposition was properly granted because two years had passed since the claim arose.
Lesson: Revoking the power of attorney, hiring a new lawyer, and giving that new counsel power of attorney is enough to terminate the attorney/client relationship. Once this relationship is over the statute of limitations begins to run on the amount of time the client is permitted to sue for malpractice.