The case is Construction Systems, Inc. v. FagelHaber, LLC, 2015 IL App (1st) 141700. The plaintiff sued FagelHaber for failing to perfect a mechanic’s lien resulting in the subordination of that lien to a mortgagee’s lien. The legal malpractice claim is straightforward. The more interesting question was whether the law firm could defend on the ground that it settled a fee claim against the client before the legal malpractice claim was filed.
In 2003, Construction Systems retained FagelHaber to serve mechanics lien relating to a real estate development. FagelHaber allegedly failed to perfect the lien because it failed to serve the lien on the Cosmopolitan Bank, which held a mortgage on the property. In January 2004, FagelHaber filed an appearance for Construction Systems in a lawsuit dealing with the mechanics’ liens. (The mechanics’ lien litigation).
In August 2004, FagelHaber withdrew as counsel for Construction Systems in the underlying mechanic’s lien litigation. In November 2004, FagelHaber and Construction Systems entered into a settlement agreement under which Construction Systems … “does hereby fully remise, release and forever discharge FagelHaber..of and from any and all claims, demands, actions, causes of action, suits, … existing at the date hereof or hereafter arising, both known and unknown, forseeable and unforseeable, …arising from or in connection with any matter,… including, without limitation, and Claims in connection with the legal services provided by FagelHaber to [Construction Systems] or the Indebtedness.”