Statute of Limitations/Repose

Recent Illinois Case: Dobbins v. Zager

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In this unpublished order, the First District affirmed the dismissal of a legal malpractice claim on statute of repose grounds.   The court held that neither equitable estoppel nor fraudulent concealment saved the claim.  The court emphasized that misrepresentations that toll the statute of repose must be different from the representations that constitute the alleged malpractice.

Dobbins v. Zager, 2016 IL App (1st) 151175-U

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

Recent Illinois Case: Beshkov v. Katten Muchin Rosenman LLP

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Legal malpractice claim was barred under the statute of limitations and the statute of repose.   The court held that, assuming that the defendant fraudulently concealed the claim, plaintiff’s claim was still barred because she had a reasonable amount of time (9 months) within which to file her action after she discovered it.   The court rejected arguments that the “reasonable time” exception to the fraudulent concealment statute had been rejected by the supreme court; that the court could not decide plaintiff’s discovery date as a matter of law; and that the court could not decide what was a reasonable time to file as a matter of law.

Beshkov v. Katten Muchin Rosenman LLP, 2015 IL App (1st) 142455-U

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

Recent Illinois Case: Mosier v. Molitor

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This case construes various provisions of statute of limitations/repose. Because of the distinction between a statute of limitations and a statute of repose, the statute of repose can expire before any injury is suffered or known.  The two year period applicable to injuries that do not occur until death (735 ILCS 5/13-214.3(d)) is also a statute of repose and can expire before injury is known.

Mosier v. Molitor, 2015 IL App (1st) 142239

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

Recent Illinois Case: Attorney Malpractice, The Statute of Limitations and At Issue Waiver in Graham v. Stone

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by Mitchell L. Marinello, Partner, Novack and Macey LLP

Mitchell L. Marinello Jan 2014
Mitchell L. Marinello

This decision, Graham v. Stone, 2015 IL App (4th) 140839-U, illustrates some of the issues that arise when a client sues his attorney for malpractice and the attorney raises a statute of limitations defense.  Specifically, to what extent is the accused attorney entitled to ask about his client’s communications with other counsel to prove when the client first learned of the alleged malpractice?

Facts

Plaintiff was a police officer whose employment was terminated.  He hired an attorney to contest the termination.  The attorney did not follow the applicable procedures which required the officer’s grievance to be submitted to the mayor before an arbitration proceeding was filed.  Instead, the attorney simply filed an arbitration proceeding.

In January, 2008, an arbitration award was rendered dismissing the officer’s grievance because it had not first been submitted to the mayor.  In September, 2008, the trial court denied an application to vacate the arbitration award.  In August, 2009, that decision was affirmed on appeal and in September, 2009, the appellate court denied a petition for rehearing.

In August, 2011, the police officer brought an action for legal malpractice against his attorney. The officer’s complaint claimed that he first learned of his attorney’s negligence in September 2009 when the petition for rehearing was denied.  The attorney filed an answer stating that the police officer’s case was barred by the two-year statute of limitations for legal malpractice.  To help prove this defense, the attorney served an interrogatory asking:

When was the first date you consulted an attorney other than [the defendant accused of malpractice] in regards to any aspect of your termination from the . . .[police department]?  This includes, but is not limited to an attorney consulted formally or informally for ‘second opinions’ and/or relating to the conduct of [defendant].  Please state the name and addresses of said attorney or attorneys.

The police officer refused to answer and argued that this information was protected by the attorney-client privilege.  The trial court rejected that argument and ordered the police officer to answer the interrogatory.  The officer refused to do so, and he and his attorney were found in contempt of court and fined.  They appealed.

The Legal Standards Governing The Appeal

Trial court decisions on discovery matters ordinarily are not appealable until the case is over, but they do become immediately appealable if a party or his attorney is held in contempt of court.  The appellate court normally reviews trial court’s decisions on discovery matters under an ‘abuse of discretion’ standard that gives the trial court a lot of leeway, but the appellate court takes a fresh and independent look — de novo as it is called — on legal issues including those that concern the attorney-client privilege.

The Appellate Court Ruling

The parties’ briefs each argued whether the police officer had waived the privilege that ordinarily would apply to his consultations with other legal counsel when the police officer claimed in his complaint that he did not learn about his attorney’s malpractice until September of 2009.  Wouldn’t the substance or content of his communications with other attorneys directly impact on what he knew about his attorney’s malpractice and when he knew it?  And, if so, wouldn’t it be unfair for the police officer to claim he had no knowledge of the malpractice until 2009 while hiding the communications he had with other attorneys before that date?

The appellate court could have answered this question, but it did not do so.  Instead, it looked at the interrogatory that the parties were fighting over.  That interrogatory did not ask the police officer to reveal the content of his communications with other attorneys.  Instead, it asked him only the dates on which he consulted other attorneys about the underlying case and the names and addresses of those attorneys.  The court held that such basic facts are not privileged, and it affirmed the trial court’s ruling that the police officer had to answer the interrogatory.

By limiting its decision in this way, the appellate court avoided going beyond the specific facts of its case, but the same issue may come up in another guise.  For example, if the police officer answers the interrogatory by saying that he did consult with other counsel about the underlying case before September of 2009, then his former attorney may serve a second interrogatory asking for detailed information about that consultation or ask probing questions during a deposition.  The issue of privilege and waiver may well come up again at that time.  On the other hand, a lot can happen in litigation.  Perhaps the case will settle.

The appellate court did give the police officer and his counsel a break, however. It found that their decision to disobey the trial court’s decision was a good-faith attempt to get guidance on the privilege issue, and it reversed the contempt finding as well as the monetary fine.

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

First District Rules Legal Malpractice Claim Time-Barred; Reiterates Key Timeliness Principles

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by Matthew J. Singer, Attorney, Novack and Macey LLP

Matthew J. Singer - Novack and Macey - Sept 2014 hi res
Matthew J. Singer

In a recent decision, Lamet v. Levin, 2015 IL App (1st) 143105, the First District Court of Appeals affirmed the dismissal of a time-barred legal malpractice claim.  In the course of rejecting plaintiff’s arguments, the court emphasized several significant hurdles for legal-malpractice plaintiffs seeking to recover for their lawyers’ conduct in the distant past.

Factual Background:  In 1994, Plaintiff Client (himself a lawyer) hired Defendant Attorney to represent him in a lawsuit.  In that suit, Client’s landlord claimed that Client owed it $34,000 in unpaid rent.  Attorney raised defenses and counterclaims on Client’s behalf based on two untrue factual allegations.  First, Attorney asserted that the rented space was around 2000 square feet, when in reality it was closer to 3000.  Second, Attorney claimed incorrectly that another tenant was being billed for the same space.  The suit was eventually dismissed for want of prosecution.

In 2002, the landlord refiled the action against Client, this time seeking $50,000 in damages.  Attorney relied on the same erroneous defenses he had pursued in the earlier action.

After the case dragged on for nearly a decade, Client consulted with additional attorneys in 2011.  These attorneys informed Client that Attorney’s assertions were indefensible and that Client had no legitimate defense to the suit.  Client ended up settling with the landlord for $150,000.  Client then sued Attorney in 2011 for legal malpractice, alleging that he was injured by Attorney’s pursuit of frivolous defenses.

Statute of Repose:  The First District held that Client’s legal malpractice claim was barred by Illinois’ six-year statute of repose.  735 ILCS 5/13-214.3(c).  Client argued that the statute of repose did not begin running as long as Attorney continued to pursue the unsupported defenses he had first put forward in 1994.  The court rejected this argument, concluding that Client’s negligence claim was, at its heart, based on Attorney’s failure to recognize and advise Client — in 1994 — that Client had no bona fide defenses.  Although Attorney continued to pursue these faulty defenses for more than a decade, that was irrelevant to determining when the statute of repose was triggered.  Accordingly, the statute of repose began running in 1994 and had long since expired when Client filed suit in 2011.

Statute of Limitations:  Apart from the fact that the statute of repose barred Client’s claims, the First District also held that Client’s claim relating to Attorney’s unfounded square-footage defense was time-barred.  In 1994, Client hired an architect to measure the square-footage of the office, which was over 2,700 square feet.  Based on the architect’s measurements, Client was on notice that the office was much larger than 2,000 square feet, contrary to Attorney’s assertions in the litigation against the landlord.  Because Client knew or should have known in 1994 that Attorney’s square-footage defense was factually unsupported, the two-year statute of limitations for legal malpractice, 735 ILCS 5/13-214.3(b), started running almost two decades before Client filed suit.

Fraudulent Concealment:  Finally, the First District rejected Client’s argument that Attorney “fraudulently concealed” his legal malpractice claim by failing to inform Client of his alleged malpractice.  Although Client did not allege any action by Attorney to conceal a cause of action, he argued that Attorney, as a fiduciary, had an affirmative duty to inform him of a potential malpractice claim.  The court squarely rejected this argument, explaining that “[t]his court has rejected the notion that a lawyer has an affirmative obligation to advise a client of the grounds to sue him for legal malpractice.”  Thus, there was no fraudulent concealment — and no tolling of the statute of repose or limitations — so Client’s claim was time-barred.

In sum, although Lamet is hardly a groundbreaking decision, it serves as a helpful reminder of key principles governing timeliness of legal malpractice claims.

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

Recent Illinois Case: Banks v. Casson

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This recent case involved a dispute between attorneys over failure to pay a lawyer referral fee.  The attorneys never obtained signed written consent from the client for the referral fee, as required by Rule 1.5 of the Illinois Rules of Professional Conduct. Nonetheless, the attorney who was allegedly owed the fees filed a lawsuit, seeking damages for breach of fiduciary duty (under a joint venture theory) and fraud.  The First District affirmed dismissal, holding that the breach of fiduciary duty claim failed because the “joint venture” was based on an unenforceable agreement.   The fraud claim was time barred.

Banks v. Casson, 2015 IL App (1st) 133141-U

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

Recent Illinois Case: Mercola v. Abdou

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This recent case denied a motion to dismiss a legal malpractice case on statute of limitations grounds.

Mercola v. Abdou, No. 14 C 8170, 2015 WL 3545414 (N.D. Ill. June 5, 2015)

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