Causation

Speculation in Determining Causation: First District Holds Testimony as to What a Witness Would Have Done Absent Attorney’s Alleged Malpractice is Admissible”

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The National League of Professional Baseball Teams (the “League”) hired the law firm Gozdecki, Del Giudice, Americus & Farkas, LLP (“GDAF”) to draft its operating agreement (the “Agreement”).  The League asserts that the Agreement was supposed to contain a $1 million liquidated damages provision to be imposed on teams that voluntarily withdrew from the League.   However, no such provision was included.  Rather, the final version of Agreement contained a provision for involuntary expulsion of a team, which included a $1 million liquidated damages penalty.  When four of the League’s eight teams chose to join a rival organization, the League suffered “devastating financial losses and eventually, the league ceased operations.”  Id. at ¶5.  The League sued GDAF for malpractice, seeking the $4 million dollars it should have been able to collect from the departing teams, but for GDAF’s alleged malpractice in drafting the Agreement.

At trial, the parties vigorously contested the type of exit fee provision the owners intended. The owners of two departing teams testified that they “would not have signed an agreement containing an exit fee provision.”  Id. at ¶32.  The League objected to the testimony, but was overruled. After the jury returned a verdict in favor of GDAF, the League appealed. Among other things, the League argued that the trial court erred in allowing the speculative testimony from two departing team owners as to what they would have done concerning an agreement that did not yet exist: an alleged violation of Illinois Rules of Evidence 602 and 701.  Id. at ¶36.  The Appellate Court disagreed, explaining that “to determine whether defendants committed malpractice by failing to include an automatic exit fee provision in the agreement, the jury had to consider the parties’ intent regarding exit fees.”  Id. at ¶38.  It added that the League “has not cited any authority stating that evidence of such intent cannot be relevant or admissible just because the parties did not have an actual agreement containing the disputed provision.” Id.

N. League of Prof’l Baseball Teams v. Gozdecki, Del Giudice, Americus & Farkas, LLP

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

Laurent v. Johnson

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The Third District affirmed the grant of summary judgment in a legal malpractice case.  The court held that plaintiff had no evidence that she would have been successful in the underlying case within a case but for the legal malpractice because she failed to satisfy the “discrepancy rule” for an insurance case.  The court also held that there was no evidence that the settlement of the underlying case was depressed by the alleged malpractice because the plaintiff settled her underlying case before the court dismissed it.  Thus, there was no evidence of either causation or damage.

Laurent v. Johnson, 2017 IL App (3d) 160627

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

Hilton v. Foley & Lardner, LLP

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In this unpublished opinion, the First District affirmed the dismissal of conversion and breach of fiduciary duty claims brought by an individual and affirmed the grant of summary judgment with respect to legal malpractice claims brought by an LLC.

As to the individual’s claims, the court affirmed the dismissal on statute of limitations grounds.  The plaintiff should have known of the defendant lawyer’s conflicted representation of the plaintiff when his lawyer wrote a letter to defendant’s lawyer on the issue.  Moreover, the court noted that the two-year statute of limitations applies to any claim against a lawyer (even if it is not a legal malpractice claim) sounding in tort, contract or otherwise and arising out of professional services, even if the claim is brought by a non-client.

As to the LLC’s claim, the court held that there was no evidence that the lawyer’s conduct proximately caused any loss.   There was no evidence that another lawyer representing the LLC would have acted differently and the plaintiff did not depose managing member of the LLC to try to adduce that evidence.

Hilton v. Foley & Lardner, LLP, 2017 IL App (1st) 162450-U

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

Nachtrieb v. Law Offices of James M. Kelly, P.C. , 2017 IL App (2d) 160984-U

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In this unpublished opinion, the Second District affirmed the dismissal of a legal malpractice claim for lack of causation.  The court held that the plaintiff lacked standing to assert the underlying claim that his lawyer allegedly committed malpractice by failing to bring on his behalf.  Because the plaintiff had filed for bankruptcy and been discharged, the bankruptcy trustee owned the underlying claim.  As a result, the plaintiff’s lawyer could not have asserted it on the plaintiff’s behalf and, therefore,  did not damage the plaintiff by failing to do so.

Nachtrieb v. Law Offices of James M. Kelly, P.C., 2017 IL App (2d) 160984-U

(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

 

King Koil Licensing Co. v. Harris, 2017 IL App (1st)

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The first district affirmed a jury verdict in favor of a law firm in a legal malpractice case.  It held, among other things, that the jury was allowed to find that a lawyer’s negligence in documenting the terms of a deal was not the cause of the client’s loss when the client had an opportunity to read the documents.

 

KING KOIL LICENSING COMPANY Plaintiff-Appellant v ROGER B HARRIS and FOX…

 

 

 

 

 

Brown v. Bacon, 2017 IL App (1st)

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In this unpublished opinion, the First District affirmed the dismissal of a legal malpractice claim due to the complaints failure to allege causation.   The court held that plaintiffs’ loss had either; (a) already occurred when he retained lawyers, and thus they did not cause it; or (b) was caused by another party’s breach of contract as to which he still retained a viable cause of action.

Brown v. Bacon