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Illinois Supreme Court Clarifies Some Statute of Limitations Issues

One of the most difficult issues in some malpractice litigation is whether the law suit was timely or not. Generally, the plaintiff has two years from the date of discovery of the problem. Each case is different and there is often argument as to when a plaintiff should have become aware of the facts leading him to suspect legal malpractice. The defense will often argue that the plaintiff should have suspected his injury or investigated the problem before the plaintiff contends that he was aware.

Suburban Real Estate Services, Inc. v. Carlson, 2022 IL 126935, clarifies some of these issues for legal advice that causes litigation. In the Carlson case, in 2010 the plaintiff hired a lawyer to advise him on how to terminate a joint venture with another company. The attorney allegedly advised the plaintiff to terminate the arrangement. In August 2010, the adverse party disagreed and filed a lawsuit for breach of fiduciary duty. In July 2015, after a trial, the court awarded damages in favor of the adverse party.

The key question is when did the claim arise? The defense argued that the statute of limitations began to run when the plaintiff had to hire a new attorney to defend the breach of fiduciary action. So under the defense view, plaintiff discovered his injury in 2010 and should have sued for malpractice by 2012.  Plaintiff argued that he was not aware of the allegedly incorrect legal advice until the adverse judgment was entered in the underlying case in 2015. The Illinois Supreme Court held that the injury accrued upon the entry of the adverse judgment.

The Court reasoned in part that:

¶ 36 In contrast, this is not a case where, prior to any adverse ruling, plaintiffs knew or should have known they had suffered a monetary loss caused by defendants’ negligent advice. Merely hiring new counsel to defend against a lawsuit challenging the attorney’s legal advice and incurring fees does not, standing alone, trigger a cause of action for malpractice. By providing legal representation, an attorney is not guaranteeing the client he or she represents that the client will never be sued or agreeing to indemnify the client if it is sued. See Jackson Jordan, Inc. v. Leydig, Voit & Mayer, 158 Ill. 2d 240, 253 (1994) (holding that “[i]t would be a strange rule if every client were required to seek a second legal opinion whenever it found itself threatened with a lawsuit”); Lucey, 301 Ill. App. 3d at 356 (rejecting the assertion that “subsequently incurred attorney fees will, in every case, automatically give rise to a cause of action for legal malpractice against former counsel”).

¶ 37 Although plaintiffs may have been alerted in April 2013 to the trial court’s assertion that counsel misadvised them in unwinding the company, the possibility of damages would not be actionable unless and until the ROC litigation ended adversely to plaintiffs with a finding that plaintiffs breached their fiduciary duties to ROC/Suburban. It was not until then that plaintiffs became obligated to pay a sum that they otherwise would not have had to pay but for defendants’ alleged negligence. Had the action resulted in an outcome favorable to plaintiffs, no cause of action for legal malpractice would have accrued. See Northern Illinois Emergency Physicians, 216 Ill. 2d at 307 (where damages are speculative, no cause of action for malpractice exists).

Comment: I generally agree with the ruling. The problem in these cases is that the underlying litigation often takes years to resolve and the plaintiff does not legitimately understand that the attorney’s advice may have caused the problem until the adverse judgment is entered against him. This is a contentious issue and I recognize that there are times when the plaintiff should have been aware of his injury before the adverse judgment was entered. Each case must be judged on its own facts, but I believe that the Supreme Court did a good job clarifying the law.

Ed Clinton, Jr.

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