Articles Posted in Statute of Limitations Defense

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It is very common that someone will come into my office and explain that he is a victim of legal malpractice. Often, for reasons I don’t understand, the person waits more than two years after the underlying judgment before they contact me. By waiting this long, the statute of limitations has run and there is absolutely nothing we can do to help the plaintiff.

In Illinois the plaintiff has two years to file suit from whenever the plaintiff discovers the injury. Where there is litigation, discovery occurs when the underlying case reaches judgment.

In Belden v. Emmerman, the Illinois Appellate Court held that the statute of limitations begins to run when there is an adverse judgment against the injured party. The defendant moved to dismiss and the plaintiff argued that, because he filed an appeal of the adverse judgment, the statute of limitations did not start to run until the appeal was decided.

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Source: Janousek v. KATTEN MUCHIN ROSENMAN LLP, Ill: Appellate Court, 1st Dist., 2nd Div. 2015 – Google Scholar

Illinois has a two-year statute of limitations period which applies to legal malpractice claims. Here, the Appellate Court held that the two-year statute operated to bar claims against a law firm that allegedly assisted its client in a breach of fiduciary duty.

Facts:

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A legal malpractice case requires careful analysis. Even if the lawyer was negligent in some way, did the negligence make any difference in the ultimate outcome? To evaluate a legal malpractice case, you must evaluate the underlying case as well.

Rodi v. Horstman, 2015 IL App (1st) 142787 is such a case. Rodi hired Horstman to handle an appeal of an unfavorable decision. It is undisputed that Horstman filed the notice of appeal one day late and the Appellate Court held that it had no jurisdiction. Rodi then sued Horstman for legal malpractice, but the trial court granted summary judgment for Horstman and the Appellate Court affirmed. The reason is that even if Horstman had timely filed the notice of appeal the appeal was a loser.

The Underlying Case:

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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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William Carlson and Willis Capital, LLC v. David J. Fish and the Fish Law Firm, P.C., Shawn M. Collins and The Collins Law Firm, P.C., 2015 IL App (1st) 140526.

This is a decision of the Illinois Appellate Court affirming the dismissal of a legal malpractice lawsuit on the ground that the two-year statute of limitations had expired before the lawsuit was filed.

The lawsuit arose out of a business dispute between William Carlson and his business partners in an entity known as Belvedere Trading, LLC. In 2006, Carlson had a “falling out” with his partners. In February 2008, Carlson agreed to mediate the dispute with his partners. He retained the defendant lawyers to represent him. On February 13, 2008, the parties held a mediation in which Carlson agreed to sell his interest in Belvedere for $17.5 million. The settlement agreement was signed on March 6, 2008. It is noteworthy that Carlson did not obtain an independent appraisal of the value of his interest in Belvedere before the mediation.

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This is an unpublished decision of the Illinois Appellate Court, captioned Ilija Vasilj v. Harvey Teichman, 2015 IL App (1st) 133955-U. The Appellate court affirmed a decision to grant summary judgment to the lawyer on statute of limitations grounds.

The complaint alleged that in 2007 Vasilj purchased the first floor of a building located at 2650 West Belden in Chicago, Illinois. The first floor was undeveloped, but the second and third floors had existing condominiums. Vasilj intended to develop 12 condominiums for resale. At the time of the purchase, “the second and third floors of the building were part of the existing Brau Haus Condominium Association … and subject to the Declaration of Condominium Ownership. The declaration did not include the first floor of the building as a part of the condominiums. The association, in an attempt to incorporate the first floor, passed the first amendment to the declaration which included the first floor in the association. However, the association did not record a new plat of survey reflecting the changes. The failure to record a new plat survey resulted in a defective title to Vasilj’s property. ¶ 6.

Vasilj alleged that he retained Teichman to represent him in the purchase of the Belden property and that “prior to closing, Teichman did not review the amendment to the declaration, nor did he know that a new plat survey was never filed and recorded with the amendment. The resulting defective title to Vasilj’s property would prohibit him from selling the condominiums that he would later develop. Unaware of the defective title, Vasilj closed on the Belden property and began development of the condominiums.” ¶ 7.

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Meyers v. LIVINGSTON, ADLER, PULDA, 87 A. 3d 534 – Conn: Supreme Court 2014 – Google Scholar.

One recurring theme in lawsuits against lawyers is whether the plaintiff can sue for breach of contract and thereby obtain a longer statute of limitation. In Illinois, the statute of limitations for a breach of contract is either 5 years (oral) or 10 years (written). In Connecticut, the contract statute of limitation is 6 years, but the legal malpractice statute is 3 years.

Here, the court concluded that the action (filed more than three years after the claim arose) was untimely because the action was based upon a legal malpractice theory, not a contract theory. In particular, the plaintiffs’ allegations that the lawyer breached the Rules of Professional Conduct convinced the court that the case was a malpractice case not a contract case.

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One of the recurring themes that I see is that a client has a problem with a lawyer, but the client waits years and years before addressing what to do about it. Inevitably, the statute of limitations (2 years from discovery of injury) runs while the client deals with other issues.

First, if you are the subject of a bad ruling in a case, ask your lawyer to appeal the ruling. If the decision cannot normally be appealed, ask the trial court to certify it for an immediate appeal. Rule 304 allows a litigant to attempt to certify a question for an appeal:

Rule 304. Appeals from Final Judgments That Do Not Dispose of an Entire Proceeding

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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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