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Violation of Refiling Rule Leads to Legal Malpractice Liability

Illinois has a rule that allows a plaintiff to dismiss a case once. The plaintiff can then refile the case. The rule does not allow multiple dismissals. In Webster Bank v. Pierce & Associates, P.C., No. 16 C 2522 (N.D. IL March 14, 2019), the court denied a defendant law firm’s motion for summary judgment because the law firm had violated the refiling rule.

The Illinois single refiling rule provides that if:

the action is voluntarily dismissed by the plaintiff, or the action is dismissed for want of prosecution, * * * the plaintiff, his or her heirs, executors or administrators may commence a new action within one year or within the remaining period of limitation, whichever is greater, after * * * the action is voluntarily dismissed by the plaintiff.735 Ill. Comp. Stat. Ann. 5/13-217. This provision is understood to “permit[] one, and only one, refiling of a claim.” Flesner v. Youngs Development Co., 145 Ill.2d 252, 254 (1991). The single refiling rule is considered to be an extension of res judicata. Carr v. Tillery, 591 F.3d 909, 915 (7th Cir. 2010) (“The one-refiling rule is thus the extension of the doctrine of res judicata to a class of cases in which the decision deemed to be res judicata is a dismissal without prejudice.”)

The facts were as follows:

On March 8, 2006, Kristin Jasinski obtained a loan from Webster in the amount of $138,000 and signed a promissory note payable to Webster. (Dkt. 146, ¶ 3). Jasinski failed to make her scheduled monthly payment on the loan on March 25, 2009 and defaulted on the note. Id. at ¶ 4. Webster sent Jasinski a default notice via mail on May 20, 2009 with a deadline of June 19, 2009 to make her payment. Id. at ¶ 5. The letter indicated that if Jasinski did not meet the June 19 deadline, Webster may elect to immediately accelerate all payments due on the note. Id.Jasinski never made the required payment and on September 21, 2009, Webster informed Jasinski that the debt was accelerated and the matter was being referred to Pierce. Id. at ¶¶ 6-7.

Pierce accepted Webster’s referral of the Jasinski matter and filed a complaint against Jasinski in the Circuit Court of Cook County, Illinois on February 16, 2010 seeking the unpaid principal balance on the loan in the amount of $135,000. Id. at ¶¶ 10-11. Pierce voluntarily dismissed the complaint on April 20, 2011. Id. at ¶ 14.

Pierce then filed a second lawsuit against Jasinski on June 19, 2012. Id. at ¶ 15. This second lawsuit again sought the remaining principal balance of the loan, $135,000. Id. at ¶ 16. On September 5, 2012, the Circuit Court dismissed the second lawsuit for want of prosecution. Id. at ¶ 18. Pierce successfully obtained an order vacating the dismissal for want of prosecution on May 1, 2013. Id. at ¶ 19. Ultimately, this second lawsuit was again dismissed by the Circuit Court for want of prosecution on July 9, 2013.

Pierce commenced a third lawsuit against Jasinski on September 9, 2013. Id. at ¶ 23. Again, this lawsuit sought the remaining principal balance of the loan, $135,000. Id. at ¶ 24. All three of Pierce’s lawsuits against Jasinski sought the same loan balance. Id. at ¶ 25. On February 14, 2014, Jasinski moved to dismiss the third lawsuit on the grounds that it violated the Illinois single refiling rule (735 Ill. Comp. Stat. Ann. 5/13-217). Id. at ¶ 27.

On January 31, 2014, Pierce filed a motion seeking to vacate the July 9, 2013 dismissal of the second lawsuit. Id. at ¶ 26. The Circuit Court granted this motion on February 26, 2014 and at the same time granted Pierce’s oral motion to voluntarily dismiss the second lawsuit without prejudice. Id. at ¶ 39. Pierce did not inform Webster that the second lawsuit was dismissed. Id. at ¶ 40.

Webster Bank then hired another law firm which attempted unsuccessfully to vacate the dismissal of the second lawsuit and oppose the motion to dismiss the third lawsuit.

Pierce & Associates moved for summary judgment on the ground that the claims were viable when Pierce was terminated and the other firm took over. The court ruled that the claims were no longer viable because Pierce had already voluntarily dismissed the case twice.  Thus, successor counsel was not liable because the case was not viable when that firm took over.

The Illinois rule is a trap for the unwary and can cause problems. The best practice is not to voluntarily dismiss any cause of action, if you can avoid it.

If you have questions about a legal malpractice case, do not hesitate to contact us. We do not charge for initial consultations.

https://www.clintonlaw.net/legal-malpractice.html

For questions about the applicable statute of limitations for legal malpractice claims please review our page on the discovery rule. https://www.clintonlaw.net/discovery-rule-and-legal-malpractice-in-illinois.html