Contribution/Indemnity

Nature of Act or Omission Determines what Statutes of Limitations and Repose to Apply Against an Attorney

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Partners for Payment Relief DE IV, LLC (“PPR”), as an assignee of a mortgagee, filed a complaint to foreclose against the mortgagor, John Daily (“Daily”), for lack of payment on a second mortgage.  Three months later, Daily sued his former attorneys, Barash & Everett, LLC (“Barash”) and Clinton A. Block (“Block”), who had represented him during Chapter 13 bankruptcy proceedings years before, for implied indemnity.  He alleged that they had advised Daily that this second mortgage would be “stripped off or avoided” in his bankruptcy.   Id. at ¶4.  This, Daily asserted, constituted professional negligence in that the Barash and Block failed to provide Daily with competent legal advice, and failed to timely seek a discharge of the second mortgage.  Barash and Block moved to dismiss Daily’s complaint as untimely under Illinois’ statutes of limitations and repose.  The trial court granted the motion with prejudice, finding that the claim was barred by both the statute of limitations and repose.

On appeal, the Third District addressed Daily’s argument that a legal malpractice action brought in an indemnity action should be governed by the limitations period in 735 ILCS 5/13-204 (Contribution and indemnity) rather than 735 ILCS 5/13-214.3(c) (Attorneys).  Citing the Illinois Supreme Court, it stated that “13-214.3 of the Code unambiguously applies to all claims brought against an attorney arising out of actions or omissions in the performance of professional services.”  Id. ¶11.  This was because “pursuant to the express language of section 214.3 of the Code, it is the nature of the act or omission, rather than the identity of the plaintiff, that determines whether the statute applies to a claim brought against an attorney.”  Id.   Here, the claims against Barash and Block, though stated as an implied indemnity action, were all claims against attorneys arising out of actions or omissions in the performance of professional services.  Thus, the Court held that “section 13-214.3 of the Code governs the action, rather than the general contribution an indemnity statue.”  Id. at ¶12.

Partners for Payment Relief DE IV, LLC v. Daily, 2019 IL App (3d) 170757, 128 N.E.3d 444

(This is for informational purposes and is not legal advice.)

Landau, Omahana & Kopka, Ltd. v. Franciscan Sisters Health Care Corp., 323 Ill. App. 3d 487, 752 N.E.2d 570 (1st Dist. 2001)

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Landau, Omahana & Kopka, Ltd. v. Franciscan Sisters Health Care Corp., 323 Ill. App. 3d 487, 752 N.E.2d 570 (1st Dist. 2001)

Faier v. Ambrose & Cushing, P.C., 154 Ill. 2d 384, 609 N.E.2d 315 (1993)

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Faier v. Ambrose & Cushing, P.C., 154 Ill. 2d 384, 609 N.E.2d 315 (1993) (settling attorney can assert claim for contribution and indemnity against non settling attorney)

Smiley v. Manchester Ins. & Indemn. Co. of St. Louis, 71 Ill. 2d 306, 375 N.E.2d 118 (1978)

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Smiley v. Manchester Ins. & Indemn. Co. of St. Louis, 71 Ill. 2d 306, 375 N.E.2d 118 (1978)

Schulson v. D’Ancona & Pflaum LLC, 354 Ill. App. 3d 572, 821 N.E.2d 643 (1st Dist. 2004)

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Schulson v. D’Ancona & Pflaum LLC, 354 Ill. App. 3d 572,  821 N.E.2d 643 (1st Dist. 2004)

Roberts v. Heilgeist, 124 Ill. App. 3d 1082, 465 N.E.2d 658 (2d Dist. 1984)

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Roberts v. Heilgeist, 124 Ill. App. 3d 1082, 465  N.E.2d 658 (2d Dist. 1984)

Pioneer Bank & Trust Co. v. Austin Bank of Chicago, 279 Ill. App. 3d 9, 664 N.E.2d 182 (1st Dist. 1996)

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Pioneer Bank & Trust Co. v. Austin Bank of Chicago, 279 Ill. App. 3d 9, 664 N.E.2d 182 (1st Dist. 1996)