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Much Ado About Nothing – Negligence But No Damages

This is a legal malpractice case in which the plaintiff, after enormous effort, obtained a damages award of $2000 at trial. The Appellate Court affirmed the damage award.  Unfortunately, the Appellate Court issued an unpublished opinion, Hubertus Investment Group v. Smiegelski & Wator, P.C., 2014 IL App (1st) 131927-U. This case is an example of a case where there may have been negligence, but the damages were minimal.

On May 7, 2009, Hubertus entered into a contract to purchase 12 vacant properties in Chicago, Illinois, from Dragan Radojcic for the sum of $190,000. The closing was scheduled for June 1, 2009. Hubertus alleged that the lawyer defendants were negligent because they failed to secure water certificates from the City of Chicago and because they failed to obtain title to a lot at 4407 West Fulton in Chicago, Illinois. The Fulton lot was appraised at a value of $2000. The water certificate (when obtained) proves that the water bill of the City of Chicago has been paid.

Hubertus also alleged a breach of title commitment against Chicago Title. However, on January 23, 2013, CTIC “produced, executed and recorded quitclaim deeds encompassing 11 of the 12 properties; the remaining property at 4407 West Fulton had been sold for taxes.” The trial court ultimately granted summary judgment in favor of Chicago Title. The case proceeded to trial against the lawyer defendants.

At trial, both expert witnesses agreed that the failure to obtain a water certificate was not significant in that most title companies will allow a closing to take place even though there is no water certificate at the closing. Usually the issue is resolved by a holdback of funds to satisfy the water bill. Ultimately the trial court rejected the negligence claim based on the water certificate.

The trial judge ruled that the lawyer defendants were negligent in failing to obtain a recordable deed to the property at 4407 West Fulton and awarded $2,000 in damages, the appraised value of that vacant lot.

The trial court and the appellate court rejected Hubertus’ claim that Hubertus was allowed to recover the entire $190,000 purchase price. (Hubertus was arguing that the lawyers bore the risk that the properties would diminish in value. The trial court and appellate court disagreed. Both held that the proper measure of damages was the current market value of 4407 West Fulton.

In sum, this case illustrates the importance of undertaking a damages analysis before suing for legal malpractice. It is sad to see this much effort wasted on a $2000 case by the lawyers, the trial court and the appellate court.

Edward X. Clinton, Jr.

www.clintonlaw.net