Edward Shrock (“Shrock”) and Robert Meier (“Meier) were both members of Baby Supermall, LLC (“BSM”). In November, 2016, Shrock and BSM sued Ungaretti & Harris Ltd. (“Ungaretti”) and others for aiding and abetting Meier in violating an injunction Schrock had obtained against him. Ungaretti moved to dismiss because, among other things, Shrock’s claims were time-barred under the two-year statute of limitations for legal malpractice. The motion was granted, and Shrock appealed. The Appellate Court of Illinois, First District, affirmed. It explained that the statute of limitations begins to run when “the plaintiff knew or reasonably should have known of the injury and that it may have been wrongfully caused.” Id. at ¶ 49.
In this case, Shrock had sufficient information to bring this lawsuit more than two years before he actually filed it. For example, in July 2014, Shrock’s filing in a bankruptcy action against Meier “out-and-out accused defendant Ungaretti of ‘conspiring with Meier to evade the injunction.’” Id. at ¶ 61. Shrock objected that courts may not take judicial notice of the substance of claims made in other cases. The Appellate Court countered that it was not taking notice of the facts themselves, but that such facts were in Shrock’s possession. BSM raised the same arguments and lost, but added that the statute of limitations was tolled under the “adverse domination” doctrine. It states that a statute of limitations is tolled “for claims by a corporation against its officers and directors during the time the corporation is controlled by those wrongdoing officers or directors.” Id. at ¶ 73. Here, Meier was the sole manager and overwhelming majority owner of BSM until 2015, and so allegedly would never have permitted himself to be sued or admitted to any wrongdoing. However, the presumption created by the adverse domination doctrine is rebuttable by evidence “that someone other than the wrongdoing directors had knowledge of the cause of action and both the ability and the motivation to bring suit.” Id. at ¶ 77. The Appellate Court held that Shrock, a fellow member of BSM, met all of these prerequisites “long before the two-year window.” Id. at ¶ 85.
(This is for informational purposes and is not legal advice.)