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.
When it attempted to collect the judgment, Workforce discovered that, while the litigation was pending, Urban transferred all of its assets to insiders.
Workforce then sued Pettinger and her law firm for fraud. The trial court dismissed the lawsuit against the lawyers as inherently speculative. The Appellate Court affirmed.
The Appellate Court affirmed the dismissal of the fraud claim on the grounds that there was no factual support for the allegation that the defendants’ actions proximately caused damage to Workforce.
“¶ 28 In the instant case, Workforce alleged a claim for fraud against its adversary’s former attorneys for actions the attorneys took in defending their client in prior litigation. A claim for fraud must be done with specificity and particularity for all facts and required elements alleged. Chatham Surgicore, Ltd. v. Health Care Service Corp., 356 Ill. App. 3d 795, 803 (2005). In addition, “[l]iability cannot be predicated upon surmise or conjecture as to the cause of injury.” Olson v. Williams All Seasons Co., 2012 IL App (2d) 110818, ¶ 26. Workforce cannot aver insufficient factual allegations and theorize a connection between what did occur and what should have or could have occurred to infer proximate cause between the alleged tortious conduct and the injury. Id.”
The Appellate Court also held that it was unreasonable to rely on opposing counsel’s promises to produce the spreadsheet or reconciliation that was allegedly withheld by Pettinger.
“¶ 31 Workforce alleged, without the support of any facts, that it “justifiably relied on the false representations and omissions of material facts by Defendants” in the Urban litigation. This allegation alone is insufficient to support a cause of action for fraud. Dloogatch v. Brincat, 396 Ill. App. 3d 842, 850 (2009) (a plaintiff must allege specific factual allegations and not mere conclusions of law to show that the plaintiff relied on the alleged misrepresentations to withstand a section 2-615 motion to dismiss). Workforce contends that it relied on Pettinger and the Firm’s misrepresentations that Urban’s reconciliation did not exist by engaging in a long-term discovery dispute over its production, which would not have occurred if Pettinger and the Firm had simply produced the reconciliation it already had. Plaintiff’s pleading demonstrates an extraordinary level of patience and an unrealistic belief that its adversary was going to produce something that it stated it either did not possess, did not exist or had been destroyed. At that point, it realistically could have moved to bar such evidence and it is almost a certainty that Urban would have been denied any effort to defend the claim with its own financial records. Without that evidence, defendant would have been facing the judgment it ultimately received when and if plaintiff presented its evidence.
¶ 32 Eventually, without the benefit of the reconciliation, Workforce obtained a judgment for several hundred thousand dollars more than the “admitted” amounts listed in the reconciliation based on plaintiff’s own accounting. As such, Workforce received the very judgment it requested regardless of the alleged misrepresentations and without the reconciliation. Therefore, we find Workforce has failed to allege justifiable reliance on defendants’ alleged fraudulent statements.”
In sum, its not reasonable to rely on opposing counsel’s statements. Nor is it fair to blame opposing counsel for long delays in contested litigation. This is an excellent opinion. It is a pity that it was not published.
Edward X. Clinton, Jr.