Proximate Cause

Counsel Cannot Claim Judicial Error if Client is not Properly Informed of His Rights

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Iurii Rypninskyi (“Rypninskyi “) and Joseph Hope (“Hope”) were involved in a vehicular accident.  Hope sued Rypninskyi for negligence in Illinois state court.  American Inter-Fidelity Exchange (“AIFE”), the insurer for the owner of the truck Rypninskyi was driving, agreed to defend Rypninskyi and retained the law firm Cassiday Schade to do so.  Throughout the discovery phase and the subsequent trial, Cassiday Schade had repeated trouble contacting Rypninskyi and ensuring his presence.  Rypninskyi did not even appear at trial to testify.  Id. at 1.  The trial court sanctioned him for this by ordering in limine that he could not introduce a report prepared by the trooper who had responded to the accident or Hope’s statements to the trooper.  When the trial court found that Rypninskyi, through Cassiday Schade, violated that order, it entered a default judgement against him as to liability.  Id.  The jury then returned a $400,000 verdict for Hope, but Cassiday Schade did not file an appeal.  Rypninskyi sued Cassiday Schade for legal malpractice, arguing that their failures had caused him not to appear at trial and suffer the judgment against him.

Cassiday Schade moved for summary judgment, invoking the “judicial error” doctrine.  Id. at 2.  They asserted that the trial court had erred in defaulting Rypninskyi as to liability, and that its error was an intervening cause “that severed the causal connection between its alleged malpractice and Rypninskyi’s injury.”  Id.   The Court rejected this argument, pointing out that “had Rypninskyi known about the judgment, he would have asked Cassiday Schade to appeal it.”  Id. at 1.  This indicated that Cassiday Schade had not kept Rypninskyi apprised of the progress of his case.  Having failed to inform Rypninskyi that there was a judgment against him that warranted reconsideration, the Court found that “Cassiday Schade was responsible for failing to appeal.”  Id. at 2.  It explained that “where an allegedly negligent attorney elects not to appeal a judgment that the attorney contends resulted from a judicial error, the attorney may not invoke judicial error as a defense to the client’s malpractice claim.”  Id.

Am. Inter-Fid. Exch. v. Hope, No. 17 C 7934, 2019 WL 4189657 (N.D. Ill. Sept. 4, 2019)

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

R.F. Techs., Inc. v. LeClair Ryan, P.C., No. 17 C 1886, 2018 WL 835349 (N.D. Ill. Feb. 12, 2018)

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The Northern District held that a complaint that alleged that lawyers’ malpractice caused a client to pay more to settle a case than it otherwise would have had to pay adequately plead proximate cause and damages.   The court also refused to take judicial notice of an order assessing sanctions against the malpractice plaintiff and, therefore, held that there was no evidence to support unclean hands and in pari delicto defenses at the motion to dismiss stage.

R.F. Techs., Inc. v. LeClair Ryan, P.C.

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

Century-National Ins. Co. v. Schoen, 2017 IL App (1st) 163261-U

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In this unpublished opinion, the First District affirmed the dismissal of a legal malpractice claim due to plaintiff’s inability to establish that the defendant lawyer’s conduct caused damages.

The suit alleged malpractice by two separate law firms who allegedly failed to give their insurance carrier client notice that the underlying plaintiff had made a policy limit settlement demand.  The underlying personal injury case was filed against an employer and employee.  The insurance carrier retained one law firm to represent the employer and a separate law firm to represent the employee.  During the underlying litigation, the plaintiff sent letters making policy-limit settlement demands  to both law firms.  The case did not settle and the plaintiff won a large jury verdict.  Thereafter, the employer assigned its rights against the insurance carrier to the underlying plaintiff, who brought a bad faith refusal to settle lawsuit against the insurance carrier.  The bad faith complaint’s allegations mentioned only the employer’s law firm and the employee’s law firm which also received the policy limit settlement demand letter.  The carrier settled the bad faith claim and then sued both law firms for malpractice.  The court affirmed the dismissal of the malpractice claim against the law firm not named in the bad faith complaint.  Even though the insurance carrier alleged it would have known of the settlement demand sent to the employer’s law firm if the employee’s law firm had given notice of the demand it received, the court held that was insufficient to establish causation.  The court further held that the employee’s law firm could not have proximately caused the insurance carrier’s injury because only the employer assigned its claim to the underlying plaintiff who brought the bad faith claim.

Century-National Ins. Co. v. Schoen, 2017 IL App (1st) 163261-U

 

Recent Illinois Case: Hyatt Johnson USA 2004 LLC v. Goldsmith

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In this unpublished order, the First District affirmed in part and reversed in part the trial court’s grant of summary judgment for the defendants.

The malpractice claims related to the drafting of investment documents and settlement documents. The Appellate Court affirmed dismissal of the claims based upon the investment documents. The plaintiffs asserted that the documents resulted in the appointment of a receiver and sought to recover the fees paid to the receiver. The court, however, held that the plaintiffs were not damaged because there was no evidence that the receiver’s fees were greater than the fees that would have been paid to a manager.

The court also held that the criminal theft of funds from the entity was an intervening cause prohibiting the plaintiffs from establishing proximate cause because there was no evidence that the theft was foreseeable.

The court reversed summary judgment on the malpractice claims related to the settlement documents. The court held that if the defendants’ negligence in drafting the settlement documents allowed funds to be transferred to an entity not entitled to the funds, the plaintiffs will be able to prove “specific and identifiable damages” associated with their efforts to recover those funds.

Hyatt Johnson USA 2004 LLC v. Goldsmith, 2016 IL App (1st) 151622-U 

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

Recent Illinois Case: Rawal v. Newland and Newland LLP

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In this unpublished opinion, the First District affirmed the dismissal of a legal malpractice case for failure to plead proximate causation. The court held that the complaint did not adequately plead that the plaintiff would have succeeded in the underlying litigation but for the defendants’ malpractice because the allegations of success were conclusory and the plaintiff did not plead sufficient facts to prove the “case within a case.”

Rawal v. Newland and Newland LLP, 2016 IL App (1st) 151940-U

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

Recent Illinois Case: Klein v. Cavanaugh

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In this unpublished opinion, the First District affirmed the trial court’s decision in favor of the defendant attorneys. The plaintiff alleged, among other things, that his lawyers improperly represented him and his employer at the same time and supported his employer’s board members who wanted to – and ultimately did – terminate the plaintiff’s employment. The court held that the lawyers’ conduct did not proximately cause any damages because the plaintiff would have been fired regardless of the lawyers’ breach of fiduciary duty.

Klein v. Cavanaugh, 2016 IL App (1st) 151285-U 

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

Recent Illinois Case: Fox v. Seiden

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The First District held that summary judgment was improperly entered in favor of a malpractice plaintiff. In the underlying case, the malpractice plaintiff was found liable for attorneys’ fees even though she was not a defendant in the only count under which fees could be awarded. The malpractice defendants failed to make this argument in the underlying case.

The First District reversed the trial court’s summary judgment decision because the malpractice plaintiff: (a) failed to offer expert evidence that the malpractice defendants did not meet the standard of care; and (b) possibly was contributorily negligent.

The First District also rejected the malpractice defendants’ argument that summary judgment should have been entered in their favor. The court held that whether the malpractice plaintiff could have appealed the attorneys’ fee award was a question of fact not appropriate for summary judgment. The court similarly held that other proximate cause arguments raised issues of fact.

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

Fox v. Seiden, 2016 IL App (1st) 141984