Indemnity Judgments that do not Affect Amount of Client's Liability Cannot be a Basis of a Legal Malpractice Suit
The Illinois Supreme Court recently held that a client could not prove the actual damages necessary to bring a legal malpractice action by relying on the existence of an outstanding but unenforced indemnity judgment. In so holding, the court found that law firms could not be liable for malpractice for failing to challenge an indemnity claim against the firms' client when the indemnity claim did not affect the amount of the client's liability. The client in this case was found to be jointly and severally liable to a party in an underlying medical malpractice case for the entire $4 million medical malpractice judgment. So, when a third party defendant in the underlying case satisfied the judgment and asserted indemnity claims against the client, the client remained liable for the same amount $4 million. The only thing that changed was the party to whom the client was liable, and therefore, the law firms' alleged negligence (failing to adequately oppose the third party's indemnity claim) was not the proximate cause of any injury to the client. See, Northern Illinois Emergency Physicians v. Landau, Omahana & Kopka, Ltd., 2005 WL 2298171 (Ill. Sept. 2005).