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When to Sue When A Lawyer’s Advice Causes Litigation

Illinois has two statutes that establish time limits for when you can sue for legal malpractice. The statute of limitations gives the plaintiff two years from the time the negligence was discovered. However, the statute of repose bars any claim unless the negligent act occurred within six years of the filing of the lawsuit.  This means that you have two years from the time you discovered the injury to file a lawsuit, unless the negligent act of the lawyer is more than six years old.

What happens when you believe that your lawyer’s advice caused you to be sued? The Illinois courts have held in several such cases that the plaintiff is not required to sue for malpractice immediately. Instead, the plaintiff can wait until the underlying litigation is resolved. One such case is Warnock v. Karm Winand and Patterson, 1-06-0341, 876 N.E.2d 8 (2007).  The plaintiffs hired the defendant law firm to handle a real estate closing. The closing was to occur in April 2000. Plaintiffs claimed that the buyer (Mr. and Mrs. Brown) defaulted and plaintiff attempted to retain the earnest money. On August 1, 2000, the Browns filed suit, claiming that that plaintiffs had no right under the contract to withhold the earnest money.

Question – were the plaintiffs required to file suit against their lawyer when they were sued?  Did plaintiffs malpractice claim arise on August 1, 2000? Or did the claim arise when the plaintiffs lost the underlying case?

The Appellate court held that the injury did not arise until the underlying lawsuit was lost. “When the Browns initiated litigation, plaintiffs did not know if the Brown litigation was merely a frivolous attempt to recover $342,750, or whether the letter agreements were drafted in contravention of Illinois law. In fact, plaintiffs could not have known that Patterson’s letter agreements were faulty until the circuit court granted the Browns’ motion for summary judgment. … Since plaintiffs did not actually discover and reasonably could not have discovered that the letter agreements drafted by Patterson were negligently prepared until the circuit court entered judgment on the pleadings in Browns’ favor, we conclude that the entry of that adverse judgment marked the date on which the statute of limitations commenced.”

In a similar case, the Illinois Supreme Court stated: “The mere assertion of a contrary claim and the filing of a lawsuit [by a third party are] not, in and of themselves, sufficiently compelling to induce the client to seek a second legal opinion. Meritless claims and nuisance lawsuits are, after all, a fairly commonplace occurrence. It would be strange if every client were required to seek a second legal opinion whenever it found itself threatened with a lawsuit.” Jackson Jordan Inc. v. Leydig, Voit and Mayer, 158 Ill. 2d 240 (1994).  Indeed, if you file suit before the underlying case has reached a judgment, the malpractice case can be dismissed on the ground that it is premature. Lucey v. Law Offices of Pretzel & Stoufer, Chartered, 301 Ill. App. 3d 349 (1998) (Lawsuit was premature because damages were speculative where the plaintiff had not yet lost the underlying case).

In sum, the plaintiff should wait until the underlying case is lost before filing suit unless there is a risk that the statute of repose will expire.

Edward X. Clinton, Jr.

www.clintonlaw.net