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Minnick v. Hawley Troxell Ennis & Hawley, LLP

Supreme Court of Idaho

January 9, 2015

WALTER C. MINNICK and A.K. LIENHART MINNICK, husband and wife, Plaintiffs-Appellants,
v.
HAWLEY TROXELL ENNIS AND HAWLEY, LLP, an Idaho limited liability partnership, GEOFFREY M. WARDLE, individually, Defendants-Respondents, and DOES A through F, individually

2015 Opinion No. 1

Appeal from the District Court of the Fourth Judicial District of the State of Idaho, Ada County. Hon. Ronald J. Wilper, District Judge.

The judgment in favor of respondents is reversed, and this case is remanded for further proceedings. The attorney fee award in favor of respondents is vacated. Costs on appeal are awarded to appellants.

Mauk, Miller & Burgoyne, LLC, Boise, attorneys for appellants. William L. Mauk argued.

Hepworth, Janis & Kluksdal, Chtd, Boise, attorneys for respondents. John Janis argued.

WALTERS, Justice pro tem. Chief Justice BURDICK, Justices EISMANN, J. JONES and HORTON CONCUR.

OPINION

Page 581

WALTERS, Justice pro tem

Walter Minnick and A.K. Lienhart Minnick, husband and wife (collectively Minnicks), brought a professional malpractice action against the law firm Hawley Troxell Ennis and Hawley, LLP (Hawley Troxell), alleging negligence in rendering services in connection with a real estate development project. On motion of Hawley Troxell for summary judgment, the district court dismissed the action as time-barred under the applicable statute of limitations. On appeal, the Minnicks argue that the district court erred in calculating accrual of their action under the statute, Idaho Code section 5-219(4). We reverse the judgment, and remand the case for further proceedings.

I. Factual and Procedural Background

In February 2006, the Minnicks engaged Hawley Troxell to assist on a real estate development project known as Showy Phlox Estates Subdivision (Showy Phlox).[1] The property to be developed into Showy Phlox consisted of approximately 73 acres located off North Cartwright Road with frontage on Dry Creek, roughly one mile east of Hidden Springs in Ada County, Idaho. While the Minnicks were the sole joint owners of the property, U.S. Bank held a mortgage on the same. The Minnicks planned to develop Showy Phlox into seven single-family housing lots of approximately ten acres each.

The property at issue contains certain critical wildlife and plant habitat, wetland, watershed, riparian, natural scenery and other conservation values. To conserve the nature of the landscape, the Minnicks sought to execute a conservation easement to the Land Trust of Treasure Valley, Inc. (LTTV), a not-for-profit organization pursuant to 501(c)(3) of the Internal Revenue Code. LTTV is committed to conserving space, habitat recreation, and scenic values close to residential communities. The easement, as contemplated, would restrict use and development on effectively 80% of the land. LTTV is an organization qualified to receive charitable contributions satisfying section 170(b)(3) of the Internal Revenue Code.

The conservation easement was a key component of the Showy Phlox development plan. As alleged by the Minnicks in the complaint, from " the inception of [their] engagement of Hawley Troxell's services on [Showy Phlox]," the firm was aware that the conservation easement was a " significant feature of the proposed development." In addition, the Minnicks desired and intended for the easement to qualify as a charitable contribution for tax purposes, a purpose Hawley Troxell allegedly knew and appreciated. Hawley Troxell denies knowing about this contemplated tax deduction, stating it reviewed the easement only to ensure it met local land use standards and not with an eye for tax planning.

In mid to late 2006, counsel for LTTV provided the Minnicks with a model conservation easement agreement, which was relayed to Hawley Troxell for review and revision. Hawley Troxell was involved in reviewing, amending, and revising numerous drafts of the easement. On September 6, 2006, Hawley Troxell provided the Minnicks with several documents, including a final conservation easement agreement. The Minnicks signed the conservation agreement, which was provided to LTTV's counsel

Page 582

who recorded it on September 7, 2007. By this transaction, the easement was conveyed to LTTV. Prior to recordation, however, U.S. Bank's outstanding mortgage on the property had not been subordinated to the easement, as expressly required by the plain language of ...


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