Ohio Legal-Malpractice Accrual: An Opponent’s Affirmative Defense Is Not a “Cognizable Event” When the Client Reasonably Relies on Counsel’s Contrary Assurances

I. Introduction

In Stacy Cales v. Theisen Brock LPA, the Sixth Circuit reversed a summary-judgment ruling that had dismissed an Ohio legal-malpractice claim as time-barred. The plaintiffs were Stacy Cales and her substance-abuse treatment business, Road to Recovery, LLC, and the defendants were Ohio lawyer Kristopher Justice and his firm, Theisen Brock, LPA.

The dispute arose from Justice’s drafting of sale documents for Cales’s business, particularly a Promissory Note that included a liquidated damages clause. When the buyer stopped paying, Cales sued in West Virginia. The buyer asserted (among many defenses) that Cales’s recovery was capped by the liquidated-damages provision. Cales later settled after new counsel advised that the contract likely limited her to liquidated damages.

The key appellate issue was limitations accrual: under Ohio law’s one-year limitations period for legal malpractice, when did Cales experience a “cognizable event” sufficient to start the clock under the discovery rule—(i) when the buyer pleaded the liquidated-damages defense, (ii) when Cales replaced the firm litigating the West Virginia case, or (iii) when replacement counsel affirmatively advised that the liquidated-damages clause likely capped recovery?

II. Summary of the Opinion

The court held that Ohio’s one-year statute of limitations did not bar the malpractice claim. Although the attorney-client relationship for the drafting engagement ended in October/November 2020 (termination rule), the later accrual date controlled.

Applying Ohio’s discovery rule, the Sixth Circuit determined the earliest “cognizable event” occurred on April 13, 2023, when Cales’s new attorney advised that, due to the liquidated-damages clause, Cales would likely be limited to liquidated damages in the West Virginia action. The court rejected the defendants’ proposed cognizable events: the buyer’s November 8, 2021 affirmative defense and Cales’s March 2022 termination of her firm.

Because suit was filed on September 19, 2023, it was timely. The Sixth Circuit reversed and remanded.

III. Analysis

A. Precedents Cited

1. Federal summary-judgment and review framework

Pryor v. Ohio State Univ. (quoting Lillard v. Shelby Cnty. Bd. of Educ.): De novo review applies to summary judgment based on a limitations bar. This set the appellate posture: the Sixth Circuit independently assessed accrual without deference to the district court’s conclusions.
Kubala v. Smith (quoting Fed. R. Civ. P. 56(a)) and Barton v. Martin (citing Anderson v. Liberty Lobby, Inc.): reinforced the governing standard—no genuine dispute of material fact and evidence viewed in the nonmovant’s favor—important because “cognizable event” can be fact-intensive.

2. Ohio accrual doctrine for legal malpractice (the core authorities)

F.D.I.C. v. Alexander (quoting Zimmie v. Calfee, Halter & Griswold): supplied Ohio’s controlling two-track accrual rule. A legal-malpractice claim accrues on the later of (i) termination of the attorney-client relationship for the particular undertaking, or (ii) a cognizable event under the discovery rule. The opinion uses this framework to compare the October/November 2020 termination date against the later discovery date.
Zimmie v. Calfee, Halter & Griswold: defined “cognizable event” as something that “should have alerted a reasonable person that a questionable legal practice may have occurred,” and clarified that the plaintiff need not know the full extent of injury before accrual. This definition drove the court’s evaluation of each proposed trigger.
Omni-Food & Fashion, Inc. v. Smith: reinforced that “continued general representation” does not toll limitations; termination is “for that particular transaction or undertaking.” This anchored the court’s conclusion that the drafting representation ended when the documents were executed.
Flowers v. Walker (citing Allenius v. Thomas): emphasized constructive knowledge over legal sophistication—limitations can start with knowledge of facts (not their legal significance), and a plaintiff need not discover all facts necessary to file suit. The Sixth Circuit invoked this line to frame the inquiry, yet still found the earlier proposed events insufficient given the circumstances and reasonable reliance.
Socha v. Weiss: directed the “reasonable person under the circumstances” focus—what the plaintiff is or should be aware of, and how a reasonable person would react. This supported rejecting the notion that a dense, technical affirmative defense in a lengthy pleading necessarily triggers notice for a nonlawyer client.
Hilario v. Taft, Stettinius & Hollister, L.L.P.: used for the proposition that a client may “reasonably rel[y] upon” counsel’s representations. This case was pivotal to the Sixth Circuit’s reasoning that Cales was not required to treat an opposing party’s pleading as definitive notice of her own counsel’s malpractice where her attorney had already provided an explanation minimizing the risk.

3. The “affirmative defense as cognizable event” line—and its limits

Jackson v. Greger and Rayess v. McNamee: defendants cited these for the proposition that an affirmative defense can constitute a cognizable event. The Sixth Circuit acknowledged them but did not treat them as controlling and found their logic not compelled by the present record.
Vagianos v. Halpern: provided the countervailing reasoning the Sixth Circuit found persuasive: “the mere assertion of a defense does not establish that the defense has any merit,” and treating every pleaded defense as a cognizable event would cause a “flood of unnecessary complaints.” The Sixth Circuit used this as an analytic guide, especially where counsel had supplied a plausible rejoinder (good faith/fair dealing would prevent the buyer’s strategy).

4. Nonbinding nature of other Ohio appellate districts (and how the Sixth Circuit treats them)

State v. Dovangpraseuth and Mollett v. Lawrence Cnty. Bd. of Dev. Disabilities: supported the proposition that Ohio appellate districts’ decisions are not binding on one another, though entitled to respect. This supported the Sixth Circuit’s refusal to treat Jackson and Rayess as determinative.
Croce v. New York Times Co.: cited as part of the broader point about the persuasive (not controlling) status of certain authorities in this setting.

B. Legal Reasoning

1. Statutory baseline: one-year period

The court applied Ohio Rev. Code § 2305.11(A), requiring legal-malpractice actions to be filed within one year after accrual.

2. Termination rule date (earlier date)

The drafting engagement ended when Justice executed the sale documents (October/November 2020). Under Omni-Food & Fashion, Inc. v. Smith and F.D.I.C. v. Alexander, that “particular transaction or undertaking” termination would start the clock—unless the discovery rule yielded a later date.

3. Discovery rule: identifying the “cognizable event” (later controlling date)

The dispute turned on which event would have alerted a reasonable person that “a questionable legal practice may have occurred” (Zimmie v. Calfee, Halter & Griswold). The Sixth Circuit evaluated and rejected two earlier candidates:

November 8, 2021 affirmative defense: The court emphasized context and reasonable comprehension. The defense was buried in a 14-page answer among 18 other affirmative defenses; Cales testified to difficulty understanding such filings and uncertainty about reading the entire document. Critically, the pleading’s assertion did not, by itself, rebut Justice’s earlier assurances that good faith/fair dealing would prevent a liquidated-damages-only outcome. In short, it suggested the buyer’s litigation position, not necessarily malpractice by Cales’s lawyer.
March 2022 change of counsel: Dissatisfaction with pace and aggressiveness of litigation did not reasonably put Cales on notice that the drafting of the note (Justice’s alleged malpractice) had injured her. The court treated these reasons as consistent with strategic or performance concerns in litigation, not awareness of a drafting error.

The court then selected April 13, 2023 as the cognizable event: replacement counsel’s advice that the liquidated-damages provision capped recovery. That advice was the first clear professional indication that the contract, as drafted, may have caused the adverse outcome—sufficient to trigger the duty to investigate and pursue remedies (Flowers v. Walker).

4. The role of reasonable reliance

A central feature of the court’s reasoning is that, until April 2023, Cales could reasonably rely on Justice’s assurances that contract doctrines (good faith/fair dealing and contractual intent) would prevent the “buyer can default and just pay liquidated damages” scenario. By crediting Hilario v. Taft, Stettinius & Hollister, L.L.P., the Sixth Circuit effectively held that where a client receives plausible, confidence-inducing legal advice about why a feared contract interpretation will not control, the client is not necessarily on notice of malpractice merely because the opposing party later pleads the very interpretation counsel discounted.

C. Impact

Limits premature malpractice filings: The opinion resists a rule that would force clients to sue their transactional lawyers whenever an adversary asserts a contract-based defense—especially in early pleadings—simply to preserve limitations.
Reinforces context-sensitive “cognizable event” analysis: It is not the presence of a fact in the record alone (e.g., a pleaded defense), but whether that fact would reasonably alert the client—given sophistication, document complexity, competing attorney advice, and surrounding circumstances.
Practical guidance for transactional-malpractice timing: In drafting-related malpractice, accrual may turn on when the client first receives clear advice (often from new counsel) that the drafting choice is legally outcome-determinative—particularly where the original lawyer had provided assurances that masked the risk.
Vicarious liability follows the primary claim: Because the firm claim was derivative of the individual attorney’s alleged malpractice, preserving timely accrual for the attorney also revives the firm exposure on remand.

IV. Complex Concepts Simplified

Statute of limitations: A filing deadline. Here, Ohio gives one year to sue for legal malpractice.
Accrual: The moment the legal claim is considered to “start,” which starts the limitations clock.
Termination rule: For malpractice, one possible start date is when the attorney’s work on the specific matter ends (not when all interactions end).
Discovery rule / cognizable event: Another possible start date is when something happens that should make a reasonable person suspect the attorney may have caused a legal injury, prompting investigation. The later of termination or discovery controls.
Constructive knowledge: You do not need to fully understand the law; knowledge of enough facts to prompt investigation can suffice. But this case illustrates that the “enough facts” inquiry is contextual (complex pleadings and contrary attorney assurances matter).
Liquidated damages: A contract’s pre-set dollar amount (or formula) for damages upon breach/default. It can function like a “cap” if interpreted as the exclusive remedy.
Implied covenant of good faith and fair dealing: A background contract principle that parties must not act to deprive the other of the benefit of the bargain. Justice told Cales this principle would stop the buyer from exploiting the liquidated-damages clause.
Vicarious liability (law firm): A firm can be liable for malpractice committed by its lawyer within the scope of employment/representation.

V. Conclusion

Stacy Cales v. Theisen Brock LPA refines how Ohio’s legal-malpractice discovery rule operates in practice: a client is not necessarily on notice of drafting malpractice merely because an opposing party pleads a defense relying on a disputed contract clause, nor because the client replaces litigating counsel out of frustration. Where the client has reasonably relied on counsel’s assurances, the “cognizable event” may occur only when competent advice clearly reveals that the contract’s language likely dictates an adverse and injury-causing outcome. By reversing the limitations dismissal, the Sixth Circuit preserved the malpractice claim for adjudication on the merits and signaled a measured, context-driven approach to accrual that may reduce defensive, premature malpractice filings.