Board of Managers of Eleventh Street Loftominium Association v. McDonald Hopkins, LLC, 2018 IL App (1st) 172304-U

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The Board of Managers of the Eleventh Street Loftominium Association (“Association”) retained McDonald Hopkins, LLC (“McDonald”) in an action against the developer of its building.  That suit was dismissed for want of prosecution after a McDonald attorney failed to appear at two successive case management conferences.  For this, the Association fired McDonald and retained new counsel, Nyhan, Bambrick, Kinzie & Lowry, P.C. (“Nyhan”), but McDonald never formally withdrew.  Thereafter, Nyhan failed to file a new suit within a year of dismissal, foreclosing any possibility of relief.

The Association sued McDonald for legal malpractice, accusing the firm of breaching its duty of care in multiple ways, causing Nyhan to not file a timely petition to reinstate.  McDonald moved to dismiss, claiming it did not represent the Association during the last months in which a petition to reinstate could have been filed, and that the Association’s hiring of Nyhan created an intervening cause.  The motion was denied and affirmed on appeal.  Back before the trial court, McDonald moved for summary judgment on similar grounds, which was granted.

On appeal, the Association argued that granting summary judgment contradicted the law of the case established when McDonald’s earlier motion to dismiss was denied.  There, it was held that McDonald was still the Association’s counsel of record when the window to reinstate closed because it had not formally withdrawn.  The appellate court agreed, stating “the trial court erred in disregarding our earlier ruling, which is law-of-the-case.”  Id. at ¶ 28.  McDonald argued that this case lacked a final judgment necessary for the law-of-the-case doctrine to apply, but the Appellate Court stated that “permitting a Rule 308 appeal and answering the certified questions” as done in this case renders “a final judgment.”  Id. at ¶ 31.  McDonald also claimed that the facts of the case had changed during discovery, that the different standards for a motion to dismiss and for summary judgment allow different outcomes, and that the Appellate Court’s use of the law-of-the-case doctrine was palpably erroneous.  The Appellate Court disagreed with all three assertions, holding that none of them changed the already-established fact that “the firm’s failure to withdraw as counsel meant it remained attorney of record and could potentially be liable.”  Id. at ¶ 29.

Board of Managers of Eleventh Street Loftominium Association v. McDonald Hopkins, LLC, 2018 IL App (1st) 172304-U

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

Layne v. Feda 2018 IL App (2d) 170924-U

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Plaintiffs, Rhonda Layne and Louis Iacovelli, retained defendants, William Feda, Timothy Mahoney, and McNamee and Mahoney, LTD, to represent them in a lawsuit against Adoption Ark and two of its employees.  The plaintiffs allege that Adoption Ark, an adoption service, rescinded its authorization for plaintiffs to adopt a child through them on suspicion of Layne’s mental unfitness, despite Layne twice being deemed fit for parenthood by a psychiatrist.  The plaintiffs sued Adoption Ark, but lost on summary judgment.  They then sued the defendants for legal malpractice, alleging that the defendants had failed to file a timely post summary judgment motion to amend the complaint against Adoption Ark with new legal theories.  The defendants filed a motion to dismiss with prejudice for failure to plead sufficient facts to establish a cause of action, which the trial court granted.

On appeal, the plaintiffs argue that they did plead facts sufficient to show that they would have won on five different causes of action against Adoption Ark if the defendants had brought them.  Id. at ¶ 15.  The appellate court disagreed with respect to all potential claims, noting throughout their decision a “lack of specific allegations” and that the “conclusory” complaint “is not pled with… particularity and specificity.”  Id. at ¶ 29, 32, 33.  With respect to some of the facts the plaintiffs did provide, the Court described them as “mere characterization of a combination of acts.”  Id. at ¶ 35.

Layne v. Feda, 2018 IL App (2d) 170924-U

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

Nelson v. Quarles & Brady, LLP , 2018 IL App (1st) 171653

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Kenneth Nelson hired Quarles & Brady, LLP (“QB”) to represent him in a breach of oral contract dispute against Richard Curia, the general manager of Nelson’s two automobile dealerships.  Summary judgment was granted in that case, requiring Nelson to sell shares of one dealership to Curia.  Nelson appealed, discharged QB, and then hired new counsel.  The Seventh Circuit reversed the district court’s summary judgment ruling, after which Nelson settled with Curia and sued QB for legal malpractice.  After amendment, dismissal, appeal, and remand, Nelson filed the instant complaint against QB.

In it, Nelson sought to establish proximate causation by proving the case within the case, i.e., that but for QB’s negligent failure to investigate and raise certain arguments, he would have prevailed in the underlying oral contract dispute.  The district court disagreed with this assertion, and the appellate court affirmed.  In its decision, the appellate court held that Nelson “failed to establish even the existence of a contract,” let alone that there was something QB should have done to save his case.  Id. at 143.

Nelson v. Quarles & Brady, LLP , 2018 IL App (1st) 171653

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

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.)