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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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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.”

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What is an attorney’s possessory lien? It is a lien that an attorney can use to block the client from access to the file. The attorney, however, cannot enforce the lien in court. In a recent unpublished decision the Illinois Appellate Court held that a law firm can assert a possessory lien over a computer database held by a document management firm. The case is captioned Cronin & Company, Ltd. v. Richie Capital Management, LLC., 2014 IL App (1st) 131892-U. Cronin is a law firm that represented Richie Capital (and other parties) in litigation, in which Richie Capital was attempting to recover investment losses incurred when it invested in a Ponzi scheme.

In 2012, Richie authorized Cronin to retain a third-party vendor, Flex Discovery, LLC (d/b/a Landmark Legal Solutions). Landmark was retained to provide a hosting program “that would enable attorneys to access electronic databases containing documents produced in connection with the subject litigation.” ¶ 4.

In January or February 2013, the attorney-client relationship broke down and was terminated. There was a dispute over legal fees between Cronin and Richie Capital. Cronin asked Landmark to “‘hibernate’ the database it was hosting (take it off-line), so it could not be accessed. Cronin claimed it was asserting a retaining lien over its former client’s litigation file, which it argued included the database.”  ¶ 5.

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The case is Farley v. Koepp, 14-1695. The lawyer for the plaintiff had until March 11, 2013 to file a civil rights case. Here is what happened:

On March 8, 2013, the lawyer opened an electronic case file in the Southern District of Illinois. He then emailed a copy of the complaint and the civil cover sheet to the clerk’s office as required by the local rules. The clerk opened the electronic case file. As the court explains “on the next business day – Monday, March 11 – the attorney’s assistant tried to upload the complaint but encountered problems with the electronic payment system. It was not until Tuesday, March 12, that she successfully paid the filing fee and uploaded the complaint.”

The district court granted the defendant’s motion to dismiss and dismissed the case as untimely.

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Can an estate file a lawsuit without retaining a lawyer as counsel of record? The Sixth Circuit has held that it can if the pro se litigant (not a lawyer) is the sole beneficiary of the estate. The Court explained that if a creditor had a claim against the estate, the pro se beneficiary would not be allowed to proceed. The sole beneficiary can proceed pro se because no other parties have a financial interest in the outcome. The case is captioned Bass v. Leatherwood, 14-6321 (6th Cir. 2015).

Edward X. Clinton, Jr.

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This case, Desetti v. Chester, (Virginia Supreme Court), June 4, 2015, holds that a criminal defendant cannot bring a legal malpractice claim against her former lawyer because she was not factually innocent of the charge.

Few legal malpractice cases succeed in the criminal context because the plaintiff (formerly the criminal defendant) must prove all the elements of a legal malpractice case and that he was factually innocent of the charged crime. The reason for this rule is to prevent the criminal from profiting from his crime. Very few criminal defendants can accomplish the task of demonstrating factual innocence.

In this case, Judy Gayle Desetti was convicted of felony assault arising out of an altercation between Judy, her son and a police officer. After she was convicted, Judy proved that her criminal defense counsel was ineffective because he failed to convey a plea bargain offer that would have reduced the charges to a misdemeanor. The attorney also allegedly failed to respond to the plea offer. He also failed to inform Desetti that a finding of guilty would entail a mandatory jail sentence of six months. Based on these shortcomings with her legal representation, Desetti received habeas corpus relief and her conviction was vacated.

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Workforce Solutions v. Sara L. Pettinger and Scopelitis, Garvin, Light, Hanson & Feary, P.C., 2105 IL (1st) 121265-U.

In 2006, Workforce sued Urban Services of America, Inc., for breach of contract when Urban allegedly failed to pay for $573,000 in services. In 2008, Workforce obtained a default judgment against Urban. The judgment could not be collected because Urban was insolvent. Workforce alleged in the current case that “Pettinger and the Firm fraudulently conspired with Urban to delay the proceedings in order to prevent Workforce from obtaining recovery of its 2008 judgment.”  Workforce also alleged that the defendants concealed a key document during discovery in the underlying case.

Workforce alleged that Pettinger unreasonably protracted and delayed the discovery process in the underlying case  “According to plaintiff, after ‘delaying the progress of the case and delaying discovery for over two years’ and after Urban transferred its assets to insiders, in May 2008, upon motion, Pettinger and the Firm withdrew their representation of Urban.” Shortly thereafter, Workforce obtained a default judgment against Urban for $1,305,668.56.

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The case is captioned USF Holland, Inv. v. Radogno, Cameli and Hoag, P.C., Illinois Appellate Court, First District, 2014. The case arose out of an underlying personal injury case in which Holland was sued for damages after one of its trucks collided with a car in Indiana. The Radogno firm obtained summary judgment in the trial court and the Appellate Court affirmed.

The plaintiff, Keppen, sued Holland in Cook County. Holland hired the Radogno firm which filed a motion to dismiss on the grounds of forum non conveniens. Radogno explained that its strategy was to obtain a dismissal of the case, which would require the plaintiff to refile the case in Indiana. Radogno explained that Indiana juries typically awarded less money than did juries in Cook County, Illinois.

Unfortunately for Holland, the trial court denied the motion to dismiss and the Appellate Court affirmed the denial of the motion to dismiss. That meant that the litigation would remain in Cook County.

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