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Illinois Court Holds That Plaintiff Should Have Sued Within Two Years of Original Settlement

This case, County Line Nurseries & Landscaping, Inc. v. Kenney, 2020 IL App (1st) 200615, presents a recurring issue: when does the statute of limitations for legal malpractice begin to run?  Illinois has a two-year statute of limitations for legal malpractice. The hard question is figuring out when the statute begins to run.

County Line hired James Kenney to represent it in a contract lawsuit. The parties allegedly entered into a settlement of that lawsuit on September 23, 2014. County Line appealed and alleged that it had not entered into a binding settlement. The Appellate Court disagreed and affirmed the settlement.

On October 26, 2016, County Line filed suit against Kenney. Kenney moved to dismiss on the ground that the two-year statute barred the claim, which, in his view, had arisen on September 23, 2014. County Line argued that Kenney had fraudulently concealed the disputed settlement agreement from the client and that, therefore, the claim had not arisen on September 23, 2014. The trial court dismissed the case and the appellate court affirmed the dismissal of the malpractice lawsuit.

The reasoning:

¶ 24 However, “[f]or purposes of a legal malpractice action, a client is not considered to be injured unless and until he has suffered a loss for which he may seek monetary damages.” Northern Illinois Emergency Physicians v. Landau, Omahana & Kopka, Ltd., 216 Ill. 2d 294, 306 (2005). Generally, that loss occurs when the plaintiff has suffered an adverse judgment or dismissal of the underlying action due to the attorney’s negligence. Lucey v. Law Offices of Pretzel & Stouffer, Chartered, 301 Ill. App. 3d 349, 356 (1998); Warnock v. Karm Winand & Patterson,376 Ill. App. 3d 364, 371-72 (2007).

¶ 25 Here, the trial court entered an order enforcing the settlement on September 23, 2014. Plaintiffs should have had sufficient knowledge that they suffered an injury, and of its potentially wrongful cause, no later than the date the order was entered. At that point, plaintiffs had a duty to inquire further as to whether an actionable wrong had been committed. Hermitage Corp. v. Contractors Adjustment Co., 166 Ill. 2d 72, 86 (1995). Therefore, the statute of limitations began to run on September 23, 2014, and plaintiffs had until September 23, 2016, to file their malpractice claim against Kenney. See 735 ILCS 5/13-214.3(b) (West 2018). Since plaintiffs filed their complaint on October 26, 2018, it was barred by the two-year statute of limitations. Id.

The court also rejected the fraudulent concealment argument on the ground that County Line should have known that it was injured on September 23, 2014 (when the court held there was a settlement):

¶ 26 Plaintiffs contend, however, that Kenney fraudulently concealed the fact that he was acting as County Line’s attorney without authority or consent. He further concealed from County Line and Collins that he entered into a settlement agreement with the Park District. As a result, plaintiffs argue that they had five years from the time they reasonably became aware of an injury to file a legal malpractice complaint. Plaintiffs contend that the five-year limitations period began to run at the earliest on June 18, 2014. Therefore, plaintiffs’ complaint was timely because they had until June 28, 2019, to file a complaint.

¶ 27 Section 13-215 of the Code provides:

“If a person liable to an action fraudulently conceals the cause of such action from the knowledge of the person entitled thereto, the action may be commenced at any time within 5 years after the person entitled to bring the same discovers that he or she has such cause of action, and not afterwards.” Id. § 13-215.Concealment is achieved through affirmative acts or representations “calculated to lull or induce a claimant” so that the filing of his claim is delayed, “or to prevent a claimant from discovering his claim.” Barratt v. Goldberg, 296 Ill. App. 3d 252, 257 (1998).

¶ 28 We note, however, “that if the plaintiff discovers the fraudulent concealment and a reasonable time remains within the relevant limitations period” to file an action, section 13-215 will not apply to extend the limitations period. Id. at 258. Here, plaintiffs alleged that Kenney fraudulently concealed that he entered into the settlement agreement without plaintiffs’ consent or knowledge on June 18, 2014. If plaintiffs had known of their cause of action at that time, they would have had two years from June 18, 2014, in which to file their malpractice complaint. Despite Kenney’s alleged concealments, plaintiffs had sufficient knowledge of an injury caused by his malpractice, at the latest, on September 23, 2014, when the trial court entered its order finding the settlement agreement valid and enforceable. Plaintiffs still had ample time to file a complaint within the two-year limitations period, which ran to June 18, 2016. Accordingly, the five-year statute of limitations for fraudulent concealment does not apply. Turner v. Nama, 294 Ill. App. 3d 19, 28 (1997).

Comment: the decision is well-reasoned. One recurring area of legal malpractice litigation is comes from a plaintiff who enters into a settlement and then decides that the settlement is not sufficient or adequate.

Ed Clinton, Jr.

The Standard of Proof In a Legal Malpractice Case

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