The Illinois Supreme Court Rejects Lost Punitive Damages In Legal Malpractice Cases
An interesting decision came down from the Illinois Supreme Court recently reversing a portion of an Illinois Appellate Court’s judgment which upheld a jury award of $1,168,755 in lost punitive damages to a plaintiff in a legal malpractice case. Tri-G v. Burke, Bosselman & Weaver, opinion here. Following a trial on the merits, a jury found that a lawyer (Burke) had been negligent in handling his client’s (Tri-G) case against Elgin Federal Bank and that but for that negligence, Tri-G would have recovered over $1 million in compensatory damages and an equal sum in punitive damages from Elgin Federal. The jury then returned a verdict in favor of Tri-G and against the Burke firm for $2,337,550.
During the trial, the trial court had denied Burke’s motion in limine to exclude punitive damages reasoning that if the jury assessed punitives against Elgin Federal in the underlying case, the amount would be compensatory damages to Tri-G in the malpractice case. After the verdict, the Appellate Court was faced with the issue and upheld the award of punitive damages to Tri-G, with one Appellate Justice dissenting - wanting to follow the precedent from New York and California that “a plaintiff may not recover punitive damages lost by reason of attorney malpractice.” See the Tri-G Appellate Court Decision, opinion here.
In it’s opinion (split between the Justices 4 to 3), the Illinois Supreme Court appears to adopt the precedent in New York and California finding that allowing punitive damages in legal malpractice actions is against public policy because 1) allowing such recovery would defeat the punitive and deterrent purpose of punitive damages because the negligent attorney in the legal malpractice action is not the tortfeasor who gave rise to the malicious act in the first case; 2) compensatory damages in a legal malpractice case require an objective determination, however, an award of punitive damages is an expression of the jury’s moral condemnation and requires a moral judgment, and 3) allowing malpractice plaintiffs to recover lost punitives would exact a societal cost – exposing attorneys to increased legal malpractice premiums which would make it more difficult and costly for consumers to obtain legal services. See the Ferguson v. Lieff Decision which lays out the California precedent the Illinois Supreme Court adopts, opinion here.
The troubling issue that the majority of the Supreme Court rejects, but that Justice Freeman articulates in his dissent (joined by Justices McMorrow and Fitzgerald) is that disallowing lost punitive damages in legal malpractice actions means that plaintiffs may not receive as much money as they might have if the underlying action had been handled properly in the first place. Isn’t the whole focus of legal malpractices actions to make the plaintiff whole? In cases where a plaintiff can prove that in the case-within-the-case it would have been awarded punitives, awarding those punitives in the legal malpractice case would make the plaintiff whole with respect to the attorney’s negligence. Additionally, the decision does not address a situation where a plaintiff in a legal malpractice case, in the underlying case was a defendant who was ordered to pay punitive damages due to some negligence by his attorney. Unlike the Tri-G case, in this situation the punitive damages would not be speculative - it would be a quanitative amount that the client would be out do to his attorneys negligence - shouldn't the client be awarded lost punitives in such a situation?
Picture Above: The Illinois Supreme Court Justices, left to right: Justice Garman, Justice Fitzgerald, Justice Freeman, Chief Justice Thomas, Justice McMorrow, Justice Kilbride, and Justice Karmeier.