Recent Illinois Cases

Legal Malpractice — What Constitutes a Frivolous Appeal

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In Ring v. Schencker, 2021 IL App (1st) 180909-U, the 1st District Appellate court agreed that a legal malpractice claim requires proof of damages, but was divided on what constitutes a frivolous filling.  The majority opinion found that Plaintiff’s filling was not frivolous and therefore affirmed the lower court’s decision not to award sanctions.  The majority reasoned that although counsel for the Plaintiff knew that the alleged legal malpractice did not result in damages, this knowledge alone did not make the filing frivolous.  However, Justice Hyman disagreed.  In his concurring opinion, the Justice noted that Plaintiff’s briefing was “replete with misstatements of fact” and therefore should have resulted in punishment.  Id. at ¶¶ 40-41.  Further, Justice Hyman asserted that the suit was clearly motivated by “a personal feud” and Plaintiff’s attorney should have withdrawn his representation instead of advancing his client’s “false and vindictive claims for three years.”  Id. at ¶ 47.

Ring v. Schencker, 2021 IL App (1st) 180909-U

(This is for information purposes only and not legal advice.)

Accountant’s Assertion that Plaintiff “Potentially [had] A Real Problem” Amounts to Inquiry Notice

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In a nineteen-page opinion, the Illinois Appellate Court for the First District affirmed the dismissal of a legal malpractice case against the law firm of Michael Best & Friedrich, LLP as time barred.  The court stated that legal malpractice claims must be brought within the two-year statute of limitations period set forth in section 13-214.3(b) of the Illinois Code of Civil Procedure.  It added that this statute of limitations incorporates the “discovery rule,” and that discovery “may rest upon so-called inquiry notice.”  Carlson v. Michael Best & Friedrich LLP, 2021 IL App (1st) 191961, ¶ 81.  A party is on inquiry notice when s/he knows or reasonably should have known of an injury and that the injury was wrongfully caused.  Inquiry notice starts the statute of limitations clock.

In this case, the court held that the Plaintiff should have been aware that he was wrongfully injured when his accountant informed him that he “potentially [had] a real problem” regarding a proposed settlement agreement and further stated, “I don’t know what happened here… but you left 12 million on the table.  You should be able to go back and get it.”  Id. at ¶ 82.  The court rejected Plaintiff’s claim that he believed these statements were made in “jest” and were not reasonably calculated to put him on notice of a potential legal malpractice claim.  Id.  Instead, the court concluded that the statements put the Plaintiff on inquiry notice and he should have investigated his attorneys’ actions.

Carlson v. Michael Best & Friedrich LLP, 2021 IL App (1st) 191961

Illinois Legal Malpractice and Defense of Lawyers Blog — Novack and Macey LLP

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

Legal Malpractice Claims Require Damages

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An Illinois Appellate Court held that a legal malpractice claim cannot be proven without a showing of damages.  RealWheels Corp. v. John Crossan, 2021 IL App (1st) 120809-U. RealWheels Corporation (“RealWheels”) sued attorney John Crossan for legal malpractice claiming that Crossan was responsible for its failure to patent a “twist and lock” wheel cover. According to RealWheels, Crossan filed a provisional patent application and promised to remind RealWheels to file a regular patent the following year. Crossan then retired and did not communicate with RealWheels regarding the regular patent.  Having missed the regular patent deadline, RealWheels lost the ability to patent its wheel cover. In Crossan’s motion for summary judgment, he argued that RealWheels could not prove that anyone had copied its invention, that it was unsuccessful in selling the invention, and that it experienced a significant decrease in sales of the wheel covers long before the patent issue.  RealWheels provided no evidence to rebut Crossan’s claims.  Therefore the circuit court granted his motion.  The Appellate Court affirmed.

RealWheels Corporation v. John Crossan, 2021 IL App (1st) 120809-U

Illinois Legal Malpractice and Defense of Lawyers Blog — Novack and Macey LLP

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

Clients Can Recover Punitive Damages From Their Attorneys

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As a matter of first impression, the Fifth District Appellate Court held that punitive damages assessed against a litigant that were proximately caused by an attorney’s professional negligence can be recovered as compensatory damages in a subsequent legal malpractice case. Midwest Sanitary Serv., Inc. v. Sandberg, Phoenix & Von Gontard, P.C., 2021 IL App (5th) 190360. In Midwest, the plaintiff brought a legal malpractice claim against the law firm Sandberg, Phoenix & Von Gontard, P.C. (“Sandberg”) asserting that it negligently managed a wrongful termination case and that “but for” Sandberg’s actions the jury would not have awarded punitive damages. The Court reasoned that Illinois’ prohibition on punitive damages in legal malpractice cases does not apply to these facts. 735 Ill. Comp. Stat. Ann. 5/2-1115. The Court distinguished Tri-G, Inc. v. Burke Bosselman & Weaver, 222 Ill. 2d 218 (2006), in which the Supreme Court held that an unsuccessful plaintiff cannot recover wrongfully “lost” punitive damages in a subsequent malpractice action because the bases for denying lost punitive damages did not apply to wrongfully incurred punitive damages. The court held that allowing recovery of the punitive damages is the only way to compensate the plaintiff for its total out-of-pocket losses and must be permitted.

Midwest Sanitary Services, Inc. v. Sandberg, Phoenix & Von, 2021 IL App (5th) 190360

Illinois Legal Malpractice and Defense of Lawyers Blog — Novack and Macey LLP

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

Illinois Appellate Court Holds that Violations of the Rules of Professional Conduct are Only Enforceable in Disciplinary Proceedings

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Last month, on July 7, 2021, the Illinois Appellate Court for the Second District held that the Circuit Court of DuPage County erred in ordering the disgorgement of $16,313 in attorney’s fees and the forfeiture of an additional $125,472 in outstanding fees related to a complicated divorce proceeding. The case began on November 6, 2015, when Sara C. Weber, represented by Botti Law Firm, P.C. (“Botti Law”), filed a petition for dissolution of her marriage to Karl Weber.

During the proceeding, Mr. Weber alleged that Mrs. Weber’s caregiver was exerting undue influence over his wife and misusing the parties’ marital and business assets. On June 9, 2016, Mr. Weber subpoenaed the caregiver’s bank records. In response, Botti Law appeared on behalf of the caregiver and began representing her.

On March 9, 2017, Mrs. Weber terminated Botti Law’s representation, but the firm continued to represent the caregiver. Later, Botti Law filed a petition for the setting of final fees and costs pursuant to sections 508(a) and 508(c) of the Illinois Marriage and Dissolution of Marriage Act (Act) (750 ILCS 5/508(a). In ruling on Botti Law’s petition, the trial court reasoned that the firm “was made aware of allegations that [the caregiver] was unduly influencing Sara Weber …” and therefore should have clearly recognized there was “at least a potential of a conflict” between Mrs. Weber and her caregiver.

The trial court concluded, there was “… no doubt that there was a conflict between Sara Weber and Mary Barton …” and decided the conflict arose when Botti Law filed its appearance on behalf of the caregiver on June 12, 2016. The court asserted that this action violated the Illinois Rule of Professional Conduct 1.7. Because the firm violated Rule 1.7, Botti Law was barred from collecting any billings after June 13, 2016. The trial court added that Botti Law’s fees were not “unreasonable, unnecessary or—and/or excessive” and that the firm would be entitled to recover its fees accrued through June 12, 2016.

On appeal, the Appellate Court disagreed. The Court held that disciplinary proceedings are the only appropriate forum for enforcing the Illinois Rules of Professional Conduct. The Court reasoned that disciplinary proceedings provide attorneys with protections not available in district courts including due process protections (e.g., removal of evidentiary obstacles like the Dead-Man’s Act) and a heighten burden of proof. As the Court summarized: “Again, the focus therein is on the ARDC proving attorney misconduct, and the burden is not on the attorney to prove that he or she did not commit misconduct.” In re Est. of Weber, 2021 IL App (2d) 200354, ¶ 28. In scolding the trial court, the Appellate Court stated:

This case is precisely the type of case that subverts the purpose behind the Rules. See Ill. R. Prof’l Conduct (2010), Scope ¶ 20 (eff. Jan. 1, 2010). The trial court’s decision completely violates the supreme court’s stated philosophy behind the Rules: “The fact that a Rule is a just basis for a lawyer’s self-assessment, or for sanctioning a lawyer under the administration of a disciplinary authority, does not imply that an antagonist in a collateral proceeding or transaction has standing to seek enforcement of the Rule.” Id. In re Est. of Weber, 2021 IL App (2d) 200354, ¶ 24.

The Court remanded the case with directions to enter judgment in favor of Botti Law on all of its claimed fees.

In re: Estate of Sara C. Weber, Deceased, 2021 Il App. (2nd) 200354

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

Recent Illinois Case: Webb v. Maclin

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In this unpublished opinion, the Fifth District reversed the grant of summary judgment in favor of the defendant on statute of limitations and statute of repose grounds.  The Appellate Court held that there was an issue of fact regarding when the plaintiff knew or should have known of the alleged wrong; therefore, summary judgment was inappropriate with respect to the statute of limitations.   The court also held that summary judgment was inappropriate on the statute of repose because there was an issue of fact as to when the defendant’s last act of negligence occurred.

Webb v. Maclin, 2016 IL App (5th) 150230-U

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

 

Recent Illinois Case: Jaos v. Vold

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In this unpublished opinion, the First District reversed the Circuit Court’s dismissal of a malpractice complaint pursuant to 735 ILCS 5/2-619.

The court held that there was an issue of fact as to whether the defendant lawyer adequately advised the plaintiff about the effect of liens on a business the plaintiff was purchasing.  The court rejected the defendant’s argument that the issue was so clear that no expert testimony on the issue was required.

Jaos v. Vold, 2016 IL App (1st) 152539-U

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

 

Recent Illinois Case: Bachewicz v. Holland & Knight

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In this unpublished opinion, the First District affirmed the trial court’s grant of summary judgment to a law firm.

The court held that the case was time-barred despite the plaintiff’s argument that he did not know the amount of his damages until less than two years from the time he brought his claim. The court held that it is not necessary to know the amount of damages for the statute of limitations to begin to run.

The court also held that the plaintiff failed to create a genuine issue of fact sufficient to defeat summary judgment because he did not identify the documents that allegedly led him to discover his damages.

Finally, the court affirmed summary judgment for the defendants on the plaintiff’s legal malpractice claim arising out of a transfer of real estate with which the defendants assisted because the plaintiff admitted that the transfer occurred after the attorney-client relationship had terminated.

Bachewicz v. Holland & Knight, 2016 IL App (1st) 153394-U

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

Recent Illinois Case: Mustafa v. NSI International, Inc.

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The Northern District dismissed a legal malpractice claim in which a former employee attempted to sue her employer’s attorney. The court held that the attorney owed no duty to the former employee and that the claim was time barred.

Mustafa v. NSI International, Inc.,  2016 WL 6778888

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

Recent Illinois Case: Webster Bank N.A. v. Pierce & Associates P.C.

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The Northern District of Illinois partially dismissed a legal malpractice claim. The court held that, where a claim remained viable after new counsel took over for the allegedly negligent lawyer, the client could not state a claim for legal malpractice or breach of fiduciary duty.

However, the court allowed the claims to proceed where the plaintiff had adequately alleged that the claims were no longer viable when turned over to subsequent counsel.

Webster Bank N.A. v. Pierce & Associates P.C., 2016 WL 6082356

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