Articles Posted in Legal Malpractice

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Scott v. Burgin, DC: Court of Appeals 2014 – Google Scholar.

The issue of privity frequently arises in legal malpractice litigation. A party lacks privity when the party did not have an attorney-client relationship with the lawyer. Recently, the privity rule has been relaxed by courts to allow lawsuits for legal malpractice by some persons who did not have an attorney-client relationship, such as the beneficiaries of an estate plan. Thus, a lawyer who breaches the duty of care in drafting an estate plan can sometimes be subject to suit by the beneficiaries who lost their inheritance.

Here, the plaintiff was the girlfriend of the decedent. She alleged that the lawyers for Kenneth Woodruff were negligent in failing to prosecute his divorce action against his wife. Burgin alleged that, had the divorce been obtained, she would have been eligible to receive certain retirement benefits upon Woodruff’s death.

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I last discussed this problematic topic on June 30th. This unpublished decision, Godbold v. Karlin & Fleisher, LLC, 2014 IL App (1st) 131523-U, illustrates a malpractice trap contained in Illinois law.

Usually, the rule in Illinois is that you must wait to file your malpractice action until you lose the underlying lawsuit. However, you should not wait to sue while the underlying decision is on appeal. That is the unfortunate mistake that the lawyers made in the Godbold case.

Underlying Case – Plaintiff Missed the Statute of Limitations

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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?

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ESTATE OF LIFTIN v. US, Court of Appeals, Federal Circuit 2014 – Google Scholar.

This appeal is slightly off topic, but is relevant to the area of legal malpractice liability. The Estate filed its federal estate tax return five months late. The IRS then assessed a 25% percent penalty, in the amount of $135,714.45.

The Estate claimed that it had a legitimate reason to delay filing the estate tax return, namely that it had received legal advice not to file the return from its lawyers. The issue is whether counsel’s advice gave the executor of the estate “reasonable cause” to delay filing. The trial court found no reasonable cause and the Federal Circuit affirmed. Tax counsel allegedly advised waiting to file the return until the decedent’s widow became a United States citizen. Tax counsel also advised delaying the filing until certain information had become available.

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WEST BEND MUTUAL INSURANCE COMPANY v. RODDY, LEAHY, GUILL & ZIEMA, LTD., Dist. Court, ND Illinois 2014 – Google Scholar.

This is a legal malpractice case arising out of a defense of a workers compensation claim. West Bend alleged that the defense counsel retained to handle the workers compensation claim did not meet their professional duties because they conceded liability and failed to prepare an adequate defense, including failing to adequately depose the treating physician and failing to develop a causation defense.

Judge Guzman dismissed the complaint pursuant to Rule 12(b)(6) on the grounds that the record demonstrated that the lawyer defendants did not concede liability and failed to plead causation. The opinion explains:

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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.

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Harris v. Vitale, Ill: Appellate Court, 1st Dist., 2nd Div. 2014 – Google Scholar.

This case was brought by Robert Harris, the Public Guardian of Cook County. Harris was appointed the plenary guardian of the person for Andrea Molloy, a disabled person. The Illinois Appellate Court, First District, has affirmed a decision dismissing a legal malpractice case against a lawyer, who became involved in the guardianship case.

Molloy had dementia and chronic obstructive pulmonary disease. In February 2009, Harris filed a petition to be appointed temporary guardian of Ms. Molloy and a petition for the appointment of a guardian for a disabled person.

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Powell v. POTTERFIELD, SC: Court of Appeals 2014 – Google Scholar.

This is an unpublished opinion, which is unfortunate, because it deals with a key issue in divorce malpractice cases – could one of the parties have shown that he or she was entitled to maintenance? This issue can be difficult to demonstrate in a legal malpractice context.

Here the court agreed that wife could have obtained maintenance had the lawyers been diligent in asking for it.  Thus, summary judgment in favor of the law firm was reversed.

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Huang v. Brenson, Ill: Appellate Court, 1st Dist. 2014 – Google Scholar.

This opinion affirmed the dismissal of a legal malpractice action filed against a lawyer who defended a legal malpractice case.  This case is unusual because there are two underlying cases, an immigration matter and the legal malpractice case arising out of the immigration matter.

Plaintiff John Huang is an immigration lawyer. The defendant was Ian Brenson, who defended Huang in a legal malpractice action.

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Davis v. Fenton, Dist. Court, ND Illinois 2014 – Google Scholar.

Chief Judge Castillo has stayed an unusual legal malpractice case pending the outcome of arbitration. The case is highly unusual because it was filed by Kelli Dudley a lawyer who defends against foreclosures.  In this case her client alleges that her former foreclosure defense attorney, Ernest Fenton, engaged in violations of the Fair Housing Act, 42 U.S.C. Section 3601 and the Civil Rights Act of 1866, 42 U.S.C. §§ 1981 and 1982, as well as common law legal malpractice.

The district court followed well-settled law in enforcing an arbitration clause in the engagement letter and staying the case in favor of arbitration, pursuant to the Federal Arbitration Act. The district court also rejected claims that the Defendant had waived the arbitration clause.

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