Georgia Considering Legal Malpractice Statute of Limitations In Transactional Matters

A summary of an oral argument held before the Georgia Supreme Court on May 18

DOUGLAS COE et al. v. PROSKAUER ROSE LLP (S21G1250)

The law firm Proskauer Rose, LLP provided a legal opinion to Douglas Coe, Jacqueline Coe, and GFLIRB, LLC, (collectively, “the Coes”) in 2002 regarding a proposed tax strategy.

The opinion advised that the Internal Revenue Service “should not” impose penalties on the Coes if they followed the proposed tax strategy; however, the IRS later audited the Coes, rejected the tax strategy, and imposed penalties.

After settling with the IRS in 2012, the Coes sued Proskauer in Fulton County State Court, claiming legal malpractice, fraud, and negligent misrepresentation. The trial court ultimately granted summary judgment in favor of Proskauer, and the Coes appealed the trial court’s decision.

The Court of Appeals, the state’s intermediate appellate court, affirmed the trial court’s decision, concluding that the Coes’ lawsuit fell outside the four-year statute of limitations period for fraud, misrepresentation, and legal malpractice because their claims accrued in 2002 when Proskauer provided them its legal opinion. The Court of Appeals also concluded that the Coes should have been on notice regarding the issues surrounding the tax strategy well before the IRS audit was complete.

The questions now before the Supreme Court are: Were the plaintiff’s claims of fraud and negligent misrepresentation barred by the four-year statute of limitations period applicable to legal malpractice claims? Did the plaintiffs fail, as a matter of law, to exercise ordinary care to discover the defendant’s allegedly fraudulent acts?

Several Georgia-based accounting firms filed a brief as amici curiae, or friends of the court, supporting Proskauer’s position in the case. Another amicus brief, also in support of Proskauer’s position, was filed by former presidents of the State Bar of Georgia and law firms
with substantial transactional practices in Georgia.

Attorneys for the Appellants (Douglas Coe et al.): Josh Belinfante, Jeven R. Sloan, Harry W. MacDougald
Attorneys for the Appellee (Proskauer Rose LLP): Harold D. Melton, Mark G. Trigg, Shari L. Klevens, Lisa S. Blatt, John S. Williams, Matthew Rice, Tyler Infinger, Denis Hurley Amici Curiae in Support of the Appellee (Aprio, LLP; Bennett Thrasher, LLP; Frazier & Deeter, LLC; Hancock Askew & Co; Mauldin & Jenkins LLC; Nichols Cauley & Associates, LLC.): Johannes S. Kingma, Jeffrey C. Hoffmeyer

Amici Curiae in Support of the Appellee (Former Presidents of the State Bar of Georgia, law firms with transactional practices in Georgia): Laurie Webb Daniel, Matthew D. Friedlander

Access the briefs:
- Brief of the Appellant
- Brief of the Appellee
- Reply Brief of the Appellant
- Amicus Brief in Support of the Appellee (Aprio, et al.)
- Amicus Brief in Support of the Appellee (Former Presidents of the State Bar of Georgia, et al.)

The heavyweights aligned with the firm demonstrate the significance of the issue of tolling statutes of limitations in transactional matters. (Mike Frisch)