Illinois Legal Malpractice Blog

I happened to stumble across a great new website that all parents, students, teachers and grandparents should know about - so spread the word!  Justice Sandra Day O'Connor recently launched www.ourcourts.org which is a site containing a wealth of knowledge for children on American Civics and the Judicial Branch.  I plan on spending some time with my kids on it this weekend.  Check out Justice O'Connor's recent appearance on the Daily Show with Jon Stewart promoting the site (watch the video clips).  During the interview, Justice O'Connor stated some shocking statistics - she said "[o]nly a third of young Americans can name the 3 branches of government, much less know what they do..but 75% can name at least one American Idol judge."  She also pointed out that today half of the states in America do not require Civics as a part of the school's required curriculum. 

photo: www.ourcourts.org

 

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Articles on Law.com and MichiganMessenger.com detail how a $30 million legal malpractice suit brought against the Law Firm Wiley Rein by Blackwater Security Consulting has been dismissed for a second time.  In 2004, a wrongful death suit was filed against Blackwater by the families of four former employees who were brutally killed in Fallujah, Iraq.  The employees were security guards on a mission that went terribly wrong - they were ambushed, burned, beheaded, mutilated and their bodies were paraded around Fallujah and hung from a bridge as reporters captured the incident on film.  PBS story here. 

After losing the wrongful death suit, Blackwater filed suit against the attorneys who represented them arguing that the law firm should have had the wrongful death case removed from state court in North Carolina to federal court - where the company alleges it had a better chance of winning. The theory for removal was based on a statute that requires all suits against "federal officers" be heard in federal court.  In both dismissals of the case, the judges found that Blackwater's argument that a federal court would have ruled differently from the state court purely speculative since the federal court might well have ruled that the private security company's employees were not federal officers.

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I just read an interesting article, here, on InjuryBoard.com that claims that experts predict legal malpractice claims are going to rise in 2009.  One of the main theories for the predicted increase is that lawyers who start to get squeezed economically are more likely to take on work outside their core practice area that they, in better economic times, would have referred out to a lawyer with more specialized knowledge.

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Who  would have thought that a legal malpractice case could revolve around  William Congreve's famous quote, "Heaven has no rage like love to hatred turned, Nor hell a fury like a woman scorned" ( from The Mourning Bride) - Wildey v. Paulsen is such a case.  Not only is the Illinois Appellate Decision an interesting read, but it highlights several important legal malpractice issues all lawyers should be aware of. 

The plaintiff in the case, Sharon Wildey, herself an attorney licensed to practice law in Illinois, decided to sue who former fiance, Richard Springs for breaking off their engagement, claiming he violated the Illinois Breach of Promises Act.  The jilted bride discussed the possible suit and sought advice and counsel from her personal friend, Mary Paulsen, the now defendant in the legal malpractice case.  Before Wildey and Paulsen agreed on a retention agreement or Paulsen did any work on the matter, Wildey drafted and sent a letter to Springs (pursuant to the Breach of Promises Act) putting him on notice of her intent to file a lawsuit against him - Wildey, don't forget is an attorney herself.  Both Wildey and Paulsen admit that this notice, however, didn't include the date that the parties became engaged which is required by the Act.  The parties disagree about if Paulsen told Wildey that the notice was faulty - but the fact remains that neither of them corrected the notice error.  After the notice was sent and they agreed on a retention agreement, Paulsen billed Wildey 1 1/2 hours working on the complaint to be filed against the ex-fiance, however, Wildey never paid Paulsen a penny for her representation.  Wildey then filed the complaint against Springs in the circuit court and listed Paulsen as her attorney of record.  

Because Springs lived in a different state, the case was subsequently removed to federal court  where a jury trial took place.  Paulsen did not represent Wildey in federal court.  Paulsen received a verdict in her favor and was awarded $118,000 in federal court, however after Springs appealed, the Seventh Circuit reversed the verdict finding that Wildey did not comply with the mandatory notice requirement of the Act. 

Wildey then filed a legal malpractice action in state court against her friend and former lawyer, Paulsen.  In the legal mal complaint not only did Wildey seek the award she lost in federal court, but she also sought damages for pain and suffering.  However, the trial court found that the Act only allowed recovery for actual damages so the only damages Wildey proved in  the legal malpractice action were $100 for wedding dress alterations.  Since the Court found that there was a attorney client relationship that was breached by Paulsen when she did not correct the notice mistake made by Wildey - Wildey was awarded $100 in damages.  The appellate court upheld this decision and highlighted some important legal malpractice issues:

1)  If Paulsen was doing a favor for her friend by agreeing to be listed as counsel to appear "serious" to Springs and Paulsen's duties were simply ministerial - the retainer agreement should have reflected this limitation of representation.  Instead the retainer simply established an attorney-client relationship with no limitation.  If you are doing a friend a favor and your legal representation is limited make sure you always spell those limitations out in writing;

2)  Pain and suffering is not awarded in legal malpractice actions when the case-within-a-case cannot recoup pain and suffering damages (in this case the Act prohibited pain and suffering damages).  A client may feel their attorneys negligence caused the great pain and suffering, but the client is only entitled to be made whole from the negligemce and can only recover what was lost in the case-within-a-case; 

3)  Even if an attorney does not receive payment from a client (i.e. you do work for a family member as a favor and don't charge for the legal work) this does not change the existence of an attorney-client relationship that can result in a legal malpractice action if negligence occurs; and,

4)  Wildey cannot use the federal lawsuit's verdict to show the damages from the case-within-a-case ($118,000 verdict) because no valid judgment remains in the federal lawsuit filed against Springs.  "Once a judgment is reversed on appeal, it no longer exists." (see the Opinion at p. 14).

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I have been out of the blogging world for a while and have a stack of interesting cases and articles piled up on my desk to write about.  Today, I am going to ease back into things and highlight an Illinois Appellate case that came down earlier this year that lays out what needs to be alleged in a legal malpractice complaint to fulfill the element of "actual damages." 

In Fox v. Seiden, the Court held that a client sustained "actual damages" - for purposes of stating a claim for legal malpractice - when an adverse judgment was entered against a client, even though the client never paid the judgment (as long as it is alleged in a legal malpractice complaint that an adverse judgment was entered in the underlying case the payment of the judgment by the client is not required). 

In the opinion, Justice Garcia, distinguished between an attorney's negligence prosecuting a case and negligence in defending a case, holding that to show actual damages in a "prosecution-type" case, the client must show - in the case within the case - the damages the client would have recovered but for the attorney's negligence.  However, to show actual damages in a "defense-type" case, damages may be shown by the entry of an adverse judgment against the client, even though the judgment has not been paid.

In alleging "actual damages" the Court points out that it is the plaintiff's burden in a legal mal case that she was injured and suffered a loss for which she can seek monetary damage.  The argument here is that since the judgment has not been paid the plaintiff has not yet suffered a monetary loss and therefore, cannot allege actual damages.  However, with this opinion (which relies on the opinion of the Illinois Supreme Court in Northern Illinois Emergency Physicians v. Landau) holds that the adverse judgment is enough - the fact that the plaintiff has yet to pay the judgment is irrelevant - she still has suffered a damage because she now owes a debt that she wouldn't have owed if her attorneys would not have been negligent.

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The ABA Journal reported yesterday on a New York based 2nd Circuit Court of Appeals decision that came down this week reopening the case of an immigrant who was scheduled for deportation and jailed for nine months (forcing his wife and child into a homeless shelter) when his initial counsel 'failed spectacularly' by misinforming him about the date of a scheduled hearing resulting is his failure to appear and then failing to tell him of either the missed hearing or the deportation order (citing The Associated Press). The appeals court wrote, "[i]n immigration matters, so much is at stake - the right to remain in this country, to reunite a family or to work...When lawyers representing immigrants fail to live up to their professional obligations, it is all too often the immigrants they represent who suffer the consequences."  The court went on to state, "[w]e appreciate that unfortunately, calendar mishaps will from time to time occur.  But the failure to communicate such mistakes, once discovered, to the client and to take all necessary steps to correct them is more than regrettable - it is unacceptable.  It is nondisclosure that turns the ineffective assistance of a mere scheduling error into more serious malpractice." | Posted By Cassandra Crotty In Recent Articles of Interest | 0 Comments | Permalink

In a recent article in the Chicago Daily Law Bulletin a decision by the Illinois Appellate Court was discussed dealing with the failure to schedule legal malpractice claims in a bankruptcy proceeding (Unfortunately, the case itself is unpublished, Dawn and Donald Patrzykont v. Randall A. Wolff, No. 1-07-0238).  According to the article, a couple of weeks ago the Illinois Appellate Court dismissed a couple's legal-malpractice lawsuit based on a lack of standing because of their failure to list the cause of action as an asset during their bankruptcy proceeding.  The Court wrote that when a debtor files a bankruptcy petition, he must file a schedule of assets and liabilities, including any cause of action that accrued prior to the bankruptcy filing.  A trustee is then assigned to handle the debtor's property , with the trustee having the exclusive right to pursue the causes of action listed in the bankruptcy schedule.  The Court further explains that a trustee can abandon a scheduled asset, but if an asset is not properly scheduled (like in the present case) it is not abandoned when the bankruptcy case is closed.  Consequently, if a legal malpractice action is unscheduled in the client's bankruptcy the claim remains the asset of the bankruptcy estate (not the client) even after the bankruptcy case is closed. | Posted By Cassandra Crotty In Recent Caselaw | 0 Comments | Permalink

An Article posted today on Law.com written by Charles Toutant discusses an interesting and potentially huge declaratory judgment suit filed last week in federal court in Trenton, New Jersey.  A legal malpractice insurance carrier is sending up red flags on the level of client grumbling that puts a lawyer on notice of a claim that the lawyer must then report to the insurance carrier.  If the carrier prevails, the decision could lead to many sleepless nights for lawyers who become aware that their client has some disappointment in the outcome of his or her underlying case. 

The insurance carrier is seeking for the court to find it has no obligation to defend or indemnify the lawyers in their malpractice suit.  The carrier argues a lawyer's silence about a client's displeasure over the size of a settlement and her threat to consult with separate counsel because of her displeasure is enough to void the lawyers' malpractice coverage.  In defending its position, the carrier cites language very commonplace in legal malpractice insurance policies.  The dec. action claims the lawyers "knew or had a reasonable basis to believe that an act, error or omission committed by them during their representation of the client might be expected to result in a claim or suit."  See, General Star National Ins. Co. v. Law Offices of Robert A. Olkowitz, P.C.

Generally, settlements are inherently unpopular on both sides - that is why they are "settlements".  If the carrier is successful here it would most likely lead to a slew of notices by attorneys of possible causes of action which would be unduly burdensome on the carriers and a huge pain for lawyers, as well.  Also, how are lawyers supposed to define a client's "displeasure" - is a client's off-the-cuff comment on her displeasure with a settlement enough to trigger the notice requirement or is the threat to go to another lawyer the trigger? 

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An Illinois appellate court recently held that under the doctrine of judicial estoppel, a client's statement in court that she understood and agreed to the terms of her divorce settlement did not bar the client from bringing a legal malpractice claim alleging her attorney failed to conduct adequate discovery and gave her negligent advice. 

The doctrine of judicial estoppel is designed to protect the integrity of the judicial process by precluding a party from asserting a position in a judicial proceeding that is totally inconsistent with a position the party asserted in a prior judicial proceeding.  In the instant case, the defendant attorney argued that the client's testimony at the divorce settlement prove up hearing that she understood and agreed to the terms of the divorce settlement precluded the malpractice action.  The Court rejected this argument finding that because the client's testimony in the dissolution proceeding was predicated on her attorney's negligent failure to conduct adequate discovery and the attorney's negligent advice, the testimony in the prove up was not inconsistent with the allegations of malpractice. 

The case probably would have been decided differently if the plaintiff client had alleged in her malpractice action that she did not understand the terms of the divorce settlement; instead it was alleged that the attorney's malpractice prevented the client from making an informed decision as to whether to accept the divorce settlement.  See, Wolfe v. Wolfe, 2007 WL 2350187 (Ill.App., Aug. 2007).

*Source: Professional Liability Reporter, Volume 32, Number 10, October 2007.

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To plead a cause of action for legal malpractice, a plaintiff must allege facts that support a finding that (1) an attorney  owed the plaintiff at duty arising from the attorney-client relationship, (2) the attorney breached that duty, and (3) the attorney's breach proximately caused the plaintiff to sustain damages.  Now, The Illinois Appellate Court recently held that the element of solvency is required in a legal malpractice action, as well.  This means when a malpractice plaintiff seeks to recover for loss of a cause of action, he must adequately allege and later prove that the defendant in the underlying lawsuit would have had sufficient funds to compensate him had the attorney's negligence not come into play and the plaintiff prevailed.  The Appellate Court elaborated, stating the plaintiff need only show that the underlying defendant would have been capable of paying some of the damages at some point between the attorney's malpractice and the end date of the judgment's enforceability.  See, Visvardis v. Ferleger, PC (1st Dist. 2007). | Posted By Cassandra Crotty In Recent Caselaw | 2 Comments | Permalink