Pleading

Injury Starts the Limitations Period, Not Malpractice

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Mansour Nasrabadi (“Nasrabadi”) hired attorney Taher Kameli (“Kameli”) to represent him throughout the EB 5 visa process; a program by which a foreign national may obtain permanent U.S. residency upon investing at least $500,000 in a qualifying enterprise.  Kameli advised Nasrabadi that investing in the Aurora Fund (the “Fund”), which Kameli owned, would satisfy EB 5 requirements.  He explained that the Fund would lend the money to another entity for the construction of an assisted living facility and that Nasrabadi would have a first priority security interest in the facility’s assets and real estate.  Nasrabadi agreed, signed a conflict waiver, and gave $500,000 to the Fund by a transaction in which Kameli also represented him.

Nasrabadi later sued for malpractice and breach of fiduciary duty, alleging that Kameli never acquired the promised security interest for his money and that Kameli failed to inform Nasrabadi that his conflicts were unwaivable.  Rather, Nasrabadi claimed that Kameli kept his money for personal use and secured a separate first priority mortgage loan to finance the facility.  Thus, when the bank holding Kameli’s and the Fund’s first priority loan foreclosed, it had priority over Nasrabadi’s interest.

Kameli moved to dismiss Nasrabadi’s claim for malpractice for being duplicative and untimely.  On the matter of duplicity, Kameli cited the rule that “when a breach of fiduciary duty claim is based on the same operative facts as a legal malpractice claim, and results in the same injury, the later claim should be dismissed.”  Id. at 3.  The Court did not hold that such a rule applied here as it was “not clear at this point in the proceedings whether Kameli’s alleged failure to secure priority for the Fund’s loan to the Facility… can be said to be within the scope of his representation of Nasrabadi.”  Id. at 3.

Regarding timeliness, Kameli’s arguments failed as well.  There, he asserted that Nasrabadi’s claims were based on the engagement letter signed eight years ago, well outside Illinois’ two-year statute of limitations and six-year statute of repose for legal malpractice.  735 ILCS 5/13-214.3(b); 735 ILCS 5/13-214.3(c).  The Court disagreed, stating that “the injury in a legal malpractice action is not the attorney’s negligent act itself” but “the loss for which a client may seek monetary damages.”  Id. at 4.  However, the alleged injury in this case was the loss of Nasrabadi’s investment, not the signing of the engagement letter.  Nasrabadi did not plead facts establishing precisely when that loss took place, but a complaint “does not have to anticipate” the affirmative defense of timeliness.  Id.  “As long as the Court can imagine a scenario in which the claim is timely,” the Court explained, “it is improper to dismiss it on the pleadings.”  Id.

Nasrabadi v. Kameli , No. 18 C 8514, 2019 WL 2173791 (N.D. Ill. May 20, 2019)

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

 

Nothing Is Not a Plan: District Court Holds Doing Nothing Does Not Involve Judgment, Strategy, or Tactics

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Michael Cadena retained attorney Helen Ogar to represent him in a child custody dispute.  Cadena won custody of his minor son, and was encouraged by the Department of Children and Family Services to relocate for the child’s safety.  Cadena e-mailed Ogar repeatedly asking if there were any legal barriers to him moving to another state with his son.  Ogar did not respond substantively.  After Cadena moved to Massachusetts, he was arrested and jailed.  He also lost custody of his son.  Cadena, now a citizen of Massachusetts, sued Ogar and her law firm in federal court based upon diversity jurisdiction.

The defendants moved to dismiss, arguing that the domestic relations exception to federal diversity jurisdiction barred Cadena’s lawsuit from federal court.  The court denied the motion, explaining that Cadena was “suing his lawyer for malpractice pursuant to lack of advice on whether or not he could cross state lines… an independent civil action.”  Id.  at 2.

Ogar and her firm also moved to dismiss for failure to state a claim.  They alleged that Cadena did not explain how counsel’s deficient performance did not involve an exercise of judgment, strategy, or trial tactics as required in Person v. Behnke, 242 Ill. App. 3d 933, 940 (4th Dist. 1993), which required such an allegation in a legal malpractice action arising out of allegedly deficient advice in a child custody case.  The court disagreed, and held that while Cadena “failed to expressly plead” that the alleged malpractice did not involve judgment,  his assertion that the defendants did “nothing” implicitly pleaded as much.  Id.  Ogar did find success in arguing that Cadena was not entitled to damages for emotional distress or loss of normal life.  There, the court held that “legal malpractice is not sufficient basis to support damages for emotional distress,” even in custody cases.  Id. at 3.  Regarding loss of normal life, the court held that such damages “belong almost universally to the realm of personal injury cases.”  Id.

Cadena v. Ogar, No. 19-CV-01092, 2019 WL 3325787 (C.D. Ill. July 24, 2019)

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

One Cause, One Count, One Judgment: Drafting and Judging a Complaint that Complies with 735 ILCS 5/2-603

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Adriana Mazutis (“Mazutis”) filed a multi-count complaint against Warren Lupel, Lawrence Karlin, and Lupel Wieninger, LLP (“Defendants”) for legal malpractice, among other things.  Two counts were dismissed, at which point Mazutis voluntarily dismissed her suit and re-filed a six-count complaint.  It included a count for legal malpractice.  Defendants moved for summary judgment based on Mazutis’ failure to establish proximate causation, statute of limitations, and lack of evidence to show any negligence or misconduct on their part.  The motion was granted, disposing of Mazutis’ case “in its entirety” despite the fact that the order only discussed the timeliness of the legal malpractice count and the question of proximate causation.  Id. at ¶7.  Mazutis appealed.

The appellate court noted at the outset that multiple counts within Mazutis’ complaint contained more than one cause of action and therefore violated 735 ILCS 5/2-603.  This made it “almost impossible to discern the facts that relate to each claim.”  Id. at ¶11.  However, Defendants only addressed Mazutis’ legal malpractice claims in their motion for summary judgment.  Consequently, the appellate court found “that the defendants’ motion and the circuit court’s order did not address all of the claims pled by the plaintiff, and it was, therefore, error to grant summary judgment on the entirety of the complaint.”  Id. at ¶12.  It then struck Mazutis’ complaint, and remanded with leave to file a new, concise complaint that complied with 735 ILCS 5/2-603.

Mazutis v. Lupel, 2019 IL App (1st) 173048-U

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

 

Developers Surety and Indemnity Co. v. Lipinski, 2017 IL App (1st) 152658-U

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In this unpublished opinion, the first district dismissed a claim because the insurance carrier that covered the losses caused by the underlying legal malpractice was the real party in interest as the subrogee of the named plaintiff, but was not named as the plaintiff in the complaint.

 

Westlaw – WestClip legal malpractice (002)

 

 

Short v. Grayson

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The District Court for the Northern District of Illinois granted in part and denied in part motions to dismiss legal malpractice claims. The court dismissed the plaintiff’s claim that his attorneys committed malpractice by failing to bring derivative claims in the underlying action because the plaintiff had sold his stock in the relevant company before initiating the underlying litigation and, thus, lacked standing to bring any derivative claims on its behalf. The court further dismissed a claim that the plaintiff alleged should have been asserted against an individual because the statute of limitations on that claim had expired before the defendant attorney took over the underlying case for the plaintiff. The court denied the motion as to the plaintiff’s various other claims generally holding that the plaintiff had alleged sufficient facts to survive the motions to dismiss.

Short v. Grayson , No. 16 C 2150, 2017 WL 977001 (N.D. Ill. Mar. 14, 2017)

West Bend Mutual Ins. Co. v. Schumacher

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The Seventh Circuit affirmed the dismissal of a legal malpractice claim because it did not adequately allege causation and damages.   The court held that the allegations as to how the malpractice plaintiff would have prevailed in the underlying litigation but for the attorney’s malpractice were insufficiently specific to state a claim.

West Bend Mutual Ins. Co. v. Schumacher, Case No. 14-2731, 2016 WL 7395708 (7th Cir. Dec. 21, 2016)

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

Cwik v. Law Offices of Jonathan Merel, P.C.

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In this unpublished order, the First District held that the plaintiff had failed to allege that he would have won his underlying petitions but for the defendant lawyer’s malpractice.   The court held it was not enough for the plaintiff to allege that he would have defeated the underlying defendant’s motions to dismiss but for the lawyer’s negligence, he needed to allege that he ultimately would have succeeded on the petitions themselves.

Cwik v. Law Offices of Jonathan Merel, P.C., 2017 IL App (1st) 153143-U

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