Articles Posted in Statute of Repose

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In Illinois, there are two parts to the statute of limitations.  First, you have two years from the time you discover your injury to sue a lawyer. Second, you cannot sue the lawyer based on an action that he took more than 6 years prior to the date you file your case.  The two-year and six-year rules prevent many malpractice plaintiffs from suing. They also protect lawyers who gave advice long ago, when the law may have been different.

Saunders v. Hedrick, 20 C 6835 (N.D. IL) decided on February 18, 2021, is a classic example of how these statutes work in practice.  Saunders was fired from his job as a corrections officer in 2010. He retained Hedrick who negotiated a settlement for him in 2012. In 2020, Saunders discovered that because he took a settlement his pension would be reduced. He then sued Hedrick for legal malpractice. The court held the case was time-barred because the advice to settle was given in 2012, about 8 years before the lawsuit was filed.  Saunders argued that the lawyer fraudulently concealed the error from him. The court rejected that argument because Saunders was unable to plead any false representation by Hedrick that could form the basis of fraudulent concealment.  Result: case dismissed.

If you have question about a legal malpractice case, do not hesitate to contact us at 312-357-1515.

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The Iowa court of appeals decided a case, P&C Sierra v. John M. Carroll, 18-0826, which illustrates a common problem in the legal malpractice jurisprudence. Here, the plaintiff sold real estate to a third party, Richard Brown. According to the plaintiffs, their lawyer Mr. Carroll allegedly forgot to record the real estate contract and the mortgage. The owner of the property then borrowed money from a bank which did record a mortgage. This meant that the interests of the plaintiffs were junior to the interest of the bank. The transaction occurred in 2008.

Plaintiff argued that they were injured in 2012 when Brown stopped paying on their installment note. The court disagreed and found that the plaintiffs were aware, as early as 2009, that there was a problem with their security interest in the property. Therefore, the lawsuit, filed in 2017, was untimely. Iowa has a five-year statute of limitations for legal malpractice claims.

This is a classic case where a plaintiff waited too long to file suit. Once the plaintiff realized that the lawyer may have made an error, the plaintiff discovered the injury and the statute of limitations began to run.

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The Terra Museum sued its former attorneys, DLA Piper, for legal malpractice arising out of a real estate deal gone bad. Terra claimed that, due to a drafting error, it was required to pay the other party to the real estate deal millions more than it should have had to pay. The Statute of Repose gives a client six years to sue the attorney for malpractice. The Statute of Repose starts to run when the attorney commits the negligent act, not when the client discovers the error. The court explained that Terra had opportunities to file suit during the

The court explained that Terra had opportunities to file suit during the six-year repose period. The court rejected an argument that the repose period does not begin to run until the transaction was completed.

¶ 33 We conclude that the event giving rise to Terra’s injuries occurred on May 29, 2007, when Terra and NM Project executed the first amendment and chose BOMA 96 as the method of measuring the retail parcel without the exclusionary language.Fricka v. Bauer, 309 Ill. App. 3d 82, 88 (1999) (“The plain language of the statute requires filing of the lawsuit within six years of the acts or omissions that form the basis for the complaint.”). The measurements of the rentable area under the BOMA 96 standards, without excluding the common space, resulted in the increases of the retail parcel space, which required Terra to engage in arbitrations to dispute the measurements, incur the related attorney fees and expenses and make the retail parcel credit payment at the closing. Terra’s asserted injuries directly flowed from DLA’s allegedly negligent omissions and acts as to the first amendment.

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This is another decision affirming, as time-barred, a legal malpractice case. Plaintiffs alleged that they hired Vedder Price to represent them in a commercial real estate transaction in 2003. Plaintiffs signed personal guarantees. The plaintiffs alleged that the lawyer defendants failed to advise them that one of other parties to the venture had signed a limited version of the personal guarantee. Plaintiffs claimed that had they known of the limited version of the guarantee they would not have signed the loan documents. Plaintiffs also alleged that the lawyer defendants failed to notify them that a transfer of a 10% interest in the project to Benjamin Nummy triggered a default under the loan documents.

It was undisputed that the lawyers gave the plaintiffs a complete copy of all the documents signed by all parties in 2003. In 2012, the bank notified the bank that the 2003 transfer to Nummy violated the loan documents and declared a default and sued for foreclosure.

Plaintiffs sued Vedder Price in 2014. The case was dismissed on statute of repose grounds (the alleged negligent act occurred more than 6 years before the lawsuit was filed). Plaintiffs alleged fraudulent concealment but this claim was rejected because the alleged fraudulent concealment consisted of the same allegations that supported the negligence claim. In other words there were no allegations that the lawyers took any action after the transaction to cover up their alleged mistake.

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This legal malpractice claim is a spin-off from other long running litigation filed by Prospect Development LLC against the City of Prospect Heights arising out of a real estate deal that went sour.  The defendant attorney in the legal malpractice action was Robert Kreger. Kreger was the general counsel of Prospect Heights until 2004.

The Underlying Case

The facts of the dispute are set forth in the Appellate Court’s 2012 opinion in the case captioned  Prospect Development LLC v. Village of Prospect Heights, 2012 IL App 103759-U. According to the Appellate Court, Prospect Development, which was owned by John G. Wilson, sought to develop an arena in Prospect Heights. The project was never completed. In 2004, the Village of Prospect Heights terminated the project. Prospect Development sued for breach of contract. The trial court found that Prospect Development had substantially performed the contract with the Village. However, the trial court also found that Prospect Development had unclean hands because it had secretly made loans to Robert Kreger, the general counsel of the Village. The trial court held that the secret loans constituted unclean hands and that the unclean hands barred Prospect Heights from seeking relief against the Village. Kreger had been a partner of a large law firm, Schiff Hardin and had acted as the general counsel for the Village of Prospect Heights. Opinion ¶ 2.

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Source: LAMET v. Levin, Ill: Appellate Court, 1st Dist., 3rd Div. 2015 – Google Scholar

This is a legal malpractice case that the Illinois court held was barred by the six-year statute of repose and also by the two-year statute of limitations. Lamet hired Levin in 1994 to represent him in a dispute with his landlord. Lamet’s landlord claimed that Lamet owed $34,000. Levin fought the litigation for 17 years. (Levin claimed that he was being charged for more square feet than he actually rented). Ultimately, in 2011, Levin recommended that the litigation be settled for the sum of $150,000.

Lamet then sued Levin for legal malpractice “essentially asserting that Levin should have advised him in 1994 to accede to his landlord’s demands and forgo defense of the lawsuit.”

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