## Facts

- David M. Goodman was injured in an automobile collision on July 31, 1992, and retained Holmes & McLaurin to pursue personal injury and property damage claims.
- Attorney R. Edward McLaurin, Jr. primarily handled Goodman’s matter and filed suit on July 28, 1995.
- On October 21, 1997, McLaurin filed a voluntary dismissal without prejudice, allegedly without Goodman’s knowledge or consent.
- McLaurin allegedly failed to refile within one year, resulting in Goodman’s underlying claims becoming time-barred under the applicable limitations rules.
- Goodman alleged McLaurin then concealed the malpractice by inventing a fictitious insurer (“St. David’s Trust” in Barcelona) and sending communications, including a purported settlement offer, to make it appear the claim was being pursued.
- Goodman later discovered the dismissal and sued McLaurin, related firm entities, and Edward S. Holmes for professional negligence and fraud, among other claims.

## Issues

1. Whether Goodman’s legal malpractice claim against Holmes and the firm entities was barred by the four-year statute of repose in N.C. Gen. Stat. § 1-15(c), despite allegations of later fraudulent concealment.
2. Whether the complaint stated a fraud claim against Holmes and the firm entities based on partnership or vicarious liability for McLaurin’s alleged fraudulent concealment.

## Decision

- The Court of Appeals affirmed dismissal of the professional negligence claim against the Holmes defendants under Rule 12(b)(6) as barred by N.C. Gen. Stat. § 1-15(c).
- The court held the repose period ran from the last act giving rise to the malpractice, at the latest when the underlying claim became time-barred after the voluntary dismissal and failure to refile.
- The court rejected tolling based on McLaurin’s alleged fraudulent concealment, concluding concealment may affect limitations principles but does not extend a statute of repose.
- The Court of Appeals affirmed dismissal of the fraud claim against Holmes and the firm, holding the complaint did not plead facts showing McLaurin’s fraud was in the ordinary course of the law partnership’s business or authorized/ratified by Holmes or the firm.

## Legal Principles

- Under N.C. Gen. Stat. § 1-15(c), a professional malpractice action must be brought within four years of the defendant’s last act giving rise to the cause of action; the repose period functions as an absolute outer limit.
- Fraudulent concealment does not toll or extend a statute of repose, which extinguishes the right of action after the repose period expires.
- For partnership or vicarious liability, intentional fraud by a partner is not imputed to the partnership or other partners when the fraud is outside the ordinary course of the partnership’s business and is not authorized or ratified by them.
- A fraud claim against non-actor partners or firm entities requires well-pleaded facts showing participation, authorization, ratification, or conduct within the ordinary course sufficient to support imputation.

## Conclusion

The court held that Goodman’s malpractice claim against the firm-side defendants was extinguished by the four-year statute of repose and that the pleadings did not support holding the firm or another partner liable for McLaurin’s alleged fraud because such concealment was outside the ordinary course of a law partnership’s business and was not alleged to be authorized or ratified.


Goodman v. Holmes & McLaurin Attorneys at Law, 665 S.E.2d 526 (N.C. Ct. App. 2008)