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District Court Rejects Judicial Error Defense

The case is captioned American Inter-Fidelity Exchange v. Hope, 17 C 7934, the District Court for the Northern District of Illinois rejected a law firm’s summary judgment motion based on the doctrine of judicial error. Usually, if there is a judicial error, that would constitute a defense to a legal malpractice claim. Here, as we shall see, the district court rejected the defense.

The underlying facts were mundane – the insured Rypninskiy was involved in an auto accident and was sued by

The insurance company filed a declaratory judgment action against Iurii Rypninskyi on the ground that he had not cooperated in the defense of an auto accident case filed against him.  The insurance company argued that Rypninskyi did not cooperate in the defense of his case. Rypninskyi, in turn, sued Cassiday Schade, LLP, alleging that the law firm committed legal malpractice in the defense of the action.

The key ruling occurred when Rypninskyi did not appear for trial. The trial court barred him from introducing certain evidence. Judgment was entered against him and no appeal was taken.  Cassiday Schade argued that there was a judicial error in the trial court (when the court excluded the evidence).

The district court rejected the defense on the ground that Cassiday Schade did not appeal the unfavorable ruling so it could not use the judicial error defense. The reasoning:

“Under Illinois law, in order to prevail on a claim of attorney malpractice, a plaintiff must succeed in proving four elements: (1) an attorney-client relationship giving rise to a duty on the attorney’s part; (2) a negligent act or omission by the attorney amounting to a breach of that duty; (3) proximate cause establishing that but for the attorney’s negligence, the plaintiff would have prevailed in the underlying action; and (4) actual damages.” Mihailovich v. Laatsch, 359 F.3d 892, 904 (7th Cir. 2004). Invoking the doctrine of judicial error, Cassiday Schade argues that Rypninskyi cannot prove the proximate cause element of his malpractice claim because the state judge erred in defaulting him as to liability and that error is an intervening cause that severed the causal connection between its alleged malpractice and Rypninskyi’s injury. See Huang v. Brenson, 7 N.E.3d 729, 737 (Ill. App. 2014) (holding that an attorney sued for legal malpractice is entitled to judgment where “the trial court’s error act[s] as an intervening cause” that relieves an attorney from liability for “alleged negligence”). Cassiday Schade’s argument fails because where an allegedly negligent attorney elects not to appeal a judgment that the attorney contends resulted from a judicial error, the attorney may not invoke the judicial error doctrine as a defense to the client’s malpractice claim.

It is true, as Cassiday Schade observes, that “[n]o law in Illinois requires the underlying action to be appealed before the doctrine of judicial error is applied.” Doc. 94 at 5. And the court will assume that the doctrine applies where the failure to appeal an assertedly erroneous judgment is not the attorney’s doing, for in that circumstance the attorney bears no responsibility for not taking a key step that could have led to the judgment’s reversal and in turn to the client suffering no harm due to the attorney’s alleged negligence. See Cedeno v. Gumbiner, 806 N.E.2d 1188, 1191 (Ill. App. 2004) (ruling that the legal malpractice defendants, whose alleged negligence precipitated an erroneous trial court ruling, “could not have proximately caused [their client’s] damages since her case remained actionable at the time of their discharge as [her] attorneys”). But where, as here, the attorney is responsible for not appealing the judgment that, according to the attorney, was so erroneous that it broke the causal chain between the attorney’s alleged malpractice and the client’s injury, the attorney may not invoke the judicial error doctrine to defeat the proximate cause element of the client’s subsequent malpractice claim. See Skinner v. Stone, Raskin & Israel, 724 F.2d 264, 265-66 (2d Cir. 1983) (holding that the state judge’s error in entering a default judgment did not defeat a malpractice claim against the attorneys who “contributed to the fiasco by failing to take steps to head off the entry of judgment,” reasoning that their negligence remained “a proximate contributing cause” of the default); see also Huang, 7 N.E.3d at 737 (citing Skinner with approval).

Cassiday Schade contends that “where the question of proximate cause in a legal malpractice action turns upon the outcome of an appeal that was never filed, the trial court [in the malpractice action] must determine as a matter of law what the appellate court [in the underlying suit] would have ruled if an appeal was filed.” Doc. 94 at 5-6. That principle holds true in suits alleging appellate malpractice, see Governmental Interinsurance Exch. v. Judge, 850 N.E.2d 183 (Ill. 2006), but not where, as here, the plaintiff alleges legal malpractice in the trial court, see Huang, 7 N.E.3d at 738 (holding that Judge, as an appellate malpractice case, is inapposite where the alleged legal malpractice occurred in the trial court). The premise of Cassiday Schade’s invocation of the judicial error doctrine is that the state judge committed an error in defaulting Rypninskyi as to liability; if that premise is right, then the judge’s ruling would have been reversed on appeal. Because Cassiday Schade’s invocation of the doctrine necessarily conveys its view that the judgment against Rypninskyi would have been reversed had there been an appeal, there is no need, at least at this stage of the case, for the court to determine that a reversal in fact would have ensued. Indeed, because Cassiday Schade was responsible for failing to appeal, its contention that this court must decide that the judgment would have been reversed on appeal—if only an appeal had been filed—boils down to the nonsensical proposition that it cannot be held liable for trial malpractice in state court because it decided not to appeal.