Doyle v. Hood, 2018 IL App (2d) 171041

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Harry Doyle retained the defendants, attorney Thomas Hood and Thomas B. Hood Law Offices, P.C., to prepare his will and a revocable living trust for his disabled wife, Patricia.  The living trust established a supplemental trust, with Patricia as its bene-ficiary.  Harry executed the necessary documents in December 2011.  Upon Harry’s death in January 2012, his son, Michael, became executor of his will and trustee of both trusts.  In late 2013, Patricia was admitted to a long-term-care facility.  Six months after that, an application for long-term benefits was filed on her behalf before the Department of Human Services.  The DHS subtracted a $2,000.00 asset allowance from the supple-mental trust, and imposed a spend-down of the remaining funds.  An appeal was filed on Patricia’s behalf, but the DHS found instead that a considerably higher penalty was owed.

Michael, as trustee, sued the defendants for professional negligence in May 2017.  He alleged that no penalty would have been assessed if the defendants had created the trust from Harry’s will instead of the living trust.  The defendants moved to dismiss, arguing that the claim was time-barred because it was filed more than two years after Harry’s death.  The trial court granted the motion, and Michael appealed.  The appellate court agreed with the defendants that the two-year statute of limitations applied, since the injury in this case occurred “when the Supplemental Trust could no longer be amended or revoked and was actually funded, both of which occurred upon Harry’s death.”   Id. at ¶ 28; (“When the injury caused by the act or omission does not occur until the death of the person for whom the professional services were rendered, the action may be com-menced within 2 years after the date of the person’s death…”), 735 ILCS 5/13-214(d).  The appellate court clarified that this exception “’applies instead of […] the six-year statute of repose.’”  Id. at ¶ 22, citing Wackrow v. Niemi, 231 Ill. 2d 418, 427 (2008).

Doyle v. Hood, 2018 IL App (2d) 171041

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

Reynolds v. Lyman, 903 F.3d 693 (2018)

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Brian Reynolds sued the law firm Henderson & Lyman, which represented various LLC’s he co-owned and managed, and one of its lawyers.  Reynolds accused H&L of giving negligent advice to the LLC’s that led him to violate federal disclosure laws.  The District Court granted summary judgment in favor of H&L, explaining that “Reynolds could not bring a malpractice suit on his own behalf because he did not have a personal attorney-client relationship with H&L.”  Id. at 695.  Reynolds appealed.

The Seventh Circuit affirmed, describing the attorney-client relationship as a “voluntary, contractual relationship that requires the consent of both the attorney and client.”  Id.  Given Reynold’s admission that he never asked H&L to represent him, that no one at H&L said anything suggesting it thought it represented him, and that Reynolds never entered into an agreement with H&L to that effect, the Seventh Circuit held that no attorney-client relationship existed. Reynolds argued that, as part-owner and manager of the LLC’s, his interests and theirs were “so closely bound […] as to be functionally indistinguishable.”  Id. at 696.  However, the court rejected this argument.  “‘Simply because the [officers of a business entity] were at risk of personal liability,’” it explained, “‘does not transform the incidental benefits of [the law firm’s] representation of [the business entity] into direct and intended benefits for [the officers].’”  Id. at 696, quoting Reddick v. Suits, 2011 IL App (2d) 100480, ¶ 44.  Rather, the only time an Illinois attorney owes a duty of care to a third party is “when the attorney was hired for the primary purpose of benefiting that third party.”  Id.

Reynolds v. Lyman, 903 F.3d 693 (2018)

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

 

Newman v. Crane, Heyman, Simon, Welch & Clar, 590 B.R. 457 (2018)

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The law firm Crane, Heyman, Simon, Welch & Clar (“Crane”) advised World Marketing as the company filed for bankruptcy.   The bankruptcy trustee later sued Crane for legal malpractice, alleging the firm had failed to advise World Marketing that it was subject to the Worker Adjustment and Retraining Notification Act.   As a result, World Marketing terminated over 300 employees without sufficient notice.   The former employees then sued World Marketing in a class action.

Crane moved to dismiss, asserting the trustee’s claim was barred by collateral estoppel and res judicata when the Court denied his objection to Crane’s final fee application.  Crane argued that resolution of the trustee’s objection also resolved the underlying question of malpractice.   The Court disagreed, noting that the trustee’s objection brought only “potential causes of action” against Crane in compliance with the rule that “if you don’t raise an issue with respect to malpractice at the time of a fee application, you may be precluded from bringing it later.”  Id. at 465.

With respect to collateral estoppel, the Court “explicitly declined to determine whether its ruling [on the trustee’s objection] precluded a later malpractice claim against any party.”  Id. at 463-464.  Thus, the issue of malpractice was not previously litigated or decided on the merits.   As for res judicata, the Court held that any claim for malpractice was “merely speculative” at the time of the trustee’s objection, since the Court had not yet resolved the employees’ class action against World Marketing.  Id. at 465.  Without any harm to World Marketing established, the malpractice claim could not have been brought as part of the objection, let alone ruled upon.

Newman v. Crane, Heyman, Simon, Welch & Clar, 590 B.R. 457 (2018)

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

Miller v. Davis , 2018 IL App (4th) 170337-U

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Mark Miller was committed to the Department of Human Services as a sexually violent person, but his commitment was reversed on appeal because of ineffective representation by his former trial attorney, W. Keith Davis.  For this, Miler sued Davis pro se for legal malpractice, filing his complaint on October 25, 2013.  Davis was not served until almost three years later on October 14, 2016, well after the two-year statute of limitations had lapsed.  Davis moved to dismiss with prejudice pursuant to Illinois Supreme Court Rule 103(b) for failure to exercise reasonable diligence in service.  The trial court granted Davis’ motion.

On appeal, the dismissal was affirmed.  The appellate court explained that Miller’s status as a pro se litigant did not exempt him from compliance with the same rules of procedure as a litigant represented by counsel.  Moreover, it noted that “there was a lengthy period of time, over two years, where Miller did nothing to move his case forward.”  Id. at ¶ 23.  Although the record indicated Davis knew of Miller’s complaint soon after it was filed, the appellate court held that “the presence of actual knowledge and the absence of prejudice do not require this court to find reasonable diligence” as they do not “outweigh the other factors.”  Id. at ¶ 24.

Miller v. Davis , 2018 IL App (4th) 170337-U

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

 

White v. Richert , 2018 WL 4101512

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Anna White filed a petition against her niece, attorney Elizabeth Richert, alleging violation of Richert’s duty of honesty and loyalty as White’s attorney and as trustee of a trust from which both women were to receive distributions.  Richert moved for summary judgment on both claims, arguing that they were time-barred.

With respect to White’s claim against Richert as an attorney, White affirmatively pleaded that she discovered the injury giving rise to her claim in February, 2013, but did not file her complaint until July, 2015.  Thus, the court held that the claim was time-barred. Illinois’ statute of limitations for actions “against an attorney arising out of an act or omission in the performance of professional services,” requires that they “be commenced within 2 years from the time the person bringing the action knew or reasonably should have known of the injury…”  Id. at 5; 735 ILCS 5/13-214.3.

As for White’s claim against Richert as a trustee, the court held that Illinois’ five-year catch-all provision applied, since “Illinois does not provide a specific statute of limitations for claims of breach of fiduciary duty by a trustee.”  Id. at 6; 735 ILCS 5/13-205. The Court held that the statute of limitations had not lapsed, since White could not have known about this claim against Richert until shortly before she amended her complaint in 2017 to include it, “when it became evident during discovery that there was more than one version” of the trust.  Id. at 7.

White v. Richert, 2018 WL 4101512

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

 

Gines v. Wilson, 2018 IL App (4th) 170811-U

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Cordell Gines filed a pro se complaint against his defense attorneys, Ryan R. Wilson, Lawrence Bapst, and Martin J. Ryan, alleging legal malpractice and a breach of fiduciary duty. Specifically, Gines alleged that the defendants had caused him to serve a sentence for various criminal acts of which he had been convicted that was at least five years longer than it should have been. The defendants filed a motion to dismiss, which the court granted. It found that Gines had failed to allege facts sufficient to state a claim upon which relief could be granted because he did not plead facts presenting arguments defendants failed to make that would have resulted in a reversal or modification of his conviction or sentence. The court also found that collateral estoppel barred Gines’ claim for malpractice. Gines appealed.

The appellate court affirmed the dismissal, stating that “a legal malpractice cause of action does not accrue until the plaintiff’s conviction is overturned.” Id. at ¶ 30. It explained that because another court had already established the correctness of Gines’ sentence, Gines was collaterally estopped form challenging the validity of the same sentence in the current action. Thus he could not overturn it so as to sue the defendants for malpractice.

Gines v. Wilson, 2018 IL App (4th) 170811-U

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

Anne v. Altenbernt, 2018 IL App (2d) 170614-U

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On February 10, 2017, Remesh Anne filed a legal malpractice complaint against his former attorney, Marc Altenbernt, who had represented Anne through the dissolution of Anne’s marriage. He alleged that Altenbernt had failed to properly inform the Court of the nature of his wife’s state retirement plan during the dissolution proceedings, resulting in the Court grossly undervaluing the plan when it divided up the marital property between Anne and his wife.

Altenbernt moved to dismiss, citing the statute of limitations imposed by 735 ILCS 5/13-214.3(b) (“An action for damages based on tort, contract, or otherwise […] against an attorney arising out of an act or omission in the performance of professional services […] must be commenced within 2 years from the time the person bringing the action knew or reasonably should have known of the injury for which damages are sought.”). Altenbernt contended that, at the latest, Anne knew or should have known to inquire further about any actionable wrong on the day the final judgment had been issued: January 15, 2015. The trial court dismissed Anne’s claim.

On appeal, Anne argued that the date by which he knew or should have known about any wrongdoing was February 12, 2015, when his new attorney told him of Altenbernt’s error. This would mean he filed his complaint against Altenbernt two days before the statute of limitations had expired. The Appellate Court of Illinois, Second District, disagreed, and affirmed the dismissal. In so doing, it held that “as a matter of law, plaintiff’s duty of inquiry began no later than January 27, 2015, when he retained his new attorney.” Id. at ¶16.

Anne v. Altenbernt, 2018 IL App (2d) 170614-U

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