Case Title: Midwest Sanitary Service, Inc. v. Sandberg, Phoenix & Von Gontard, P.C.

Citation: 2022 IL 127327

Docket Number: 127327

State: illinois

Court: Illinois Supreme Court

Date: 2022-09-22T00:00:00Z

Document:
2022 IL 127327 
IN THE 
SUPREME COURT 
OF 
THE STATE OF ILLINOIS 
(Docket No. 127327) 
MIDWEST SANITARY SERVICE, INC., et al., Appellees, v. SANDBERG, 
PHOENIX & VON GONTARD, P.C., et al., Appellants. 
Opinion filed September 22, 2022. 
JUSTICE NEVILLE delivered the judgment of the court, with opinion. 
Chief Justice Anne M. Burke and Justices Theis, Michael J. Burke, and Carter 
concurred in the judgment and opinion. 
Justices Overstreet and Holder White took no part in the decision. 
OPINION 
¶ 1 
The plaintiffs, Nancy Donovan, Bob Evans Sr., and Midwest Sanitary Service, 
Inc. (Midwest), filed a legal malpractice action in the circuit court of Madison 
County against their attorneys, defendants John Gilbert, Narcisa Symank, and the 
law firm of Sandberg, Phoenix, & Von Gontard, P.C. (Sandberg). The complaint 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
sought, inter alia, reimbursement for punitive damages Midwest paid in the 
underlying action that it alleged it would not have had to pay but for the professional 
negligence of its attorneys. 
¶ 2 
The circuit court denied the defendant attorneys’ motion to dismiss but certified 
the following question for immediate appeal pursuant to Illinois Supreme Court 
Rule 308 (eff. Oct. 1, 2019): 
“Does Illinois’ public policy on punitive damages and/or the statutory 
prohibition on punitive damages found in 735 ILCS 5/2-1115 bar recovery of 
incurred punitive damages in a legal malpractice case where the client alleges 
that, but for the negligence of the attorney in the underlying case, the jury in the 
underlying case would have returned a verdict awarding either no punitive 
damages or punitive damages in a lesser sum?” 
The appellate court answered the question in the negative and affirmed the 
judgment of the circuit court. See 2021 IL App (5th) 190360. We allowed the 
defendant attorneys’ petition for leave to appeal pursuant to Illinois Supreme Court 
Rule 315 (eff. Oct. 1, 2020). We also allowed the Illinois Defense Counsel to file 
an amicus curiae brief. Ill. S. Ct. R. 345 (eff. Sept. 20, 2010). For the following 
reasons, we now answer the certified question in the negative, affirm the judgment 
of the appellate court, and remand the cause to the circuit court for further 
proceedings. 
¶ 3 
I. BACKGROUND 
¶ 4 
A. Underlying Action in the Circuit Court 
¶ 5 
On March 31, 2014, Paul Crane, an employee of Midwest, filed a complaint 
against Midwest for retaliatory discharge and alleged that his employment with 
Midwest was terminated after he reported numerous health and safety violations to 
the Illinois Environmental Protection Agency (IEPA). Following a jury trial, Crane 
was awarded $160,000 in compensatory damages against Midwest, Nancy, and 
Bob Sr. and $625,000 in punitive damages against Midwest. On appeal, the 
appellate court affirmed this award. See Crane v. Midwest Sanitary Service, Inc., 
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2017 IL App (5th) 160107-U. 
¶ 6 
B. Legal Malpractice Complaint 
¶ 7 
After losing the underlying retaliatory discharge action and paying 
compensatory and punitive damages to its former employee, Midwest filed a two-
count legal malpractice complaint against its attorneys, John Gilbert, Narcisa 
Symank, and Sandberg. In the complaint, Midwest alleged that the attorneys 
breached their duty in the underlying action in the following ways: (1) failed to list 
all witnesses intended to be called at trial in compliance with Illinois Supreme 
Court Rule 213(f) (eff. Jan. 1, 2018), resulting in six witnesses for the defense being 
barred from testifying; (2) failed to disclose a voicemail recorded message from a 
Midwest customer as a lost or destroyed document in response to opposing 
counsel’s request to produce, resulting in a “missing evidence” instruction being 
given by the court to the jury; (3) failed to (a) object to the language of the limiting 
instruction given by the court regarding the testimony of defense witnesses 
concerning the destroyed voicemail message or (b) to tender an alternative 
instruction, thereby forfeiting an appellate argument regarding the instruction that 
was given; (4) elicited testimony during cross-examination of IEPA investigator 
Chris Cahnovsky that (a) he referred Midwest to the Attorney General’s office for 
prosecution and (b) the Attorney General’s office had accepted the case; and 
(5) failed and refused to discuss potential settlement with opposing counsel, while 
the case was pending in the appellate court, by responding to counsel’s invitation 
to negotiate by stating, “no,” without discussion or informing Midwest. 
¶ 8 
Midwest alleged in its complaint that, absent the failures by its attorneys, the 
result of the trial in the underlying retaliatory discharge action would have been 
different and that less or no damages would have been paid, including the $625,000 
in punitive damages. Count I of the complaint seeks recovery of $603,932.03 in 
damages plus costs on behalf of all plaintiffs, and count II seeks recovery of 
$1,068,932.03 in damages plus costs on behalf of Midwest. 
¶ 9 
In response to Midwest’s legal malpractice complaint, the attorneys filed a 
combined motion to dismiss and strike the complaint pursuant to section 2-619.1 
of the Code of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2018)). The 
motion alleged that Midwest’s request for punitive damages violates section 2-1115 
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of the Code (id. § 2-1115) and Illinois public policy. The circuit court denied the 
attorneys’ motion, finding that Midwest’s request to recover the punitive damages 
it paid in the underlying action against the attorneys in the legal malpractice action 
did not violate section 2-1115 of the Code or the public policy of Illinois. The 
attorneys subsequently filed a motion to reconsider and to certify for immediate 
appeal, pursuant to Illinois Supreme Court Rule 308 (eff. Oct. 1, 2019), the question 
of whether Midwest could recover in the legal malpractice action, with the 
attorneys’ alleged negligence being a proximate cause, the punitive damages it paid 
in the underlying action. 
¶ 10 
C. Certified Question 
¶ 11 
On August 9, 2019, the circuit court granted the attorneys’ motion to certify for 
immediate appeal the following question: 
“Does Illinois’ public policy on punitive damages and/or the statutory 
prohibition on punitive damages found in 735 ILCS 5/2-1115 bar recovery of 
incurred punitive damages in a legal malpractice case where the client alleges 
that, but for the negligence of the attorney in the underlying case, the jury in the 
underlying case would have returned a verdict awarding either no punitive 
damages or punitive damages in a lesser sum?” 
¶ 12 
On April 28, 2021, the appellate court answered the certified question in the 
negative and affirmed the judgment of the circuit court, which denied the attorneys’ 
motion to dismiss and strike the legal malpractice complaint. In answering the 
certified question in the negative, the appellate court found that Midwest was not 
barred, by section 2-1115 of the Code or the public policy in Illinois, from 
recovering, in a legal malpractice action, punitive damages it paid in the underlying 
retaliatory discharge action that were proximately caused by the alleged negligence 
of the attorneys, because the punitive damages it paid in the underlying action are 
not punitive damages in the legal malpractice action but compensatory damages 
that compensate Midwest for the actual “out-of-pocket” losses sustained. See 2021 
IL App (5th) 190360. The defendants now appeal to this court. 
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¶ 13 
II. ANALYSIS 
¶ 14 
Initially, we note that this is an appeal in a legal malpractice case, brought 
pursuant to Illinois Supreme Court Rule 308 (eff. Oct. 1, 2019), to answer the 
question of whether, in a legal malpractice action, punitive damages incurred in an 
underlying action, which were proximately caused by the alleged negligence of the 
attorneys in the underlying action, can be recovered as compensatory damages from 
the allegedly negligent attorneys in a legal malpractice action. 
¶ 15 
“ ‘In order to recover damages in a legal malpractice action in Illinois, a plaintiff 
must establish what the result would have been in the underlying action which was 
improperly litigated by the plaintiff’s former attorney.’ ” Goldfine v. Barack, 
Ferrazzano, Kirschbaum & Perlman, 2014 IL 116362, ¶ 24 (quoting Eastman v. 
Messner, 188 Ill. 2d 404, 411 (1999)). The plaintiff must prove that he suffered 
actual damages proximately caused by the attorney’s malpractice. Id. To establish 
proximate causation in a legal malpractice case, the plaintiff must prove a “case 
within a case,” meaning the plaintiff must establish the underlying action and what 
the result would have been in that action absent the alleged negligence. Merritt v. 
Hopkins Goldenberg, P.C., 362 Ill. App. 3d 902, 910 (2005). In other words, the 
plaintiff must establish that, “but for” the attorney’s negligence, the damages 
alleged would not have been incurred. Id. In a legal malpractice case, the plaintiff 
bears the burden of proving that damages were incurred because of the attorney’s 
negligence. Sheppard v. Krol, 218 Ill. App. 3d 254, 259 (1991). 
¶ 16 
Even if negligence on the part of the attorney is established, no action will lie 
against the attorney unless that negligence proximately caused damage to the client. 
The existence of actual damages is, therefore, essential to a viable cause of action 
for legal malpractice. Northern Illinois Emergency Physicians v. Landau, Omahana 
& Kopka, Ltd., 216 Ill. 2d 294, 306-07 (2005). 
¶ 17 
This legal malpractice action has not yet gone to trial; however, the damages 
Midwest seeks to recover were paid to satisfy the judgment entered against it, which 
includes the $625,000 in punitive damages actually paid in the underlying action. 
We reiterate that it is well settled in Illinois that, to succeed and recover damages 
in a legal malpractice case, the legal malpractice plaintiff must establish that the 
defendant attorney caused the injury. Goldfine, 2014 IL 116362, ¶ 24. To the extent 
that Midwest cannot prove that it lost at trial and incurred a punitive damages award 
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against it because of the attorneys’ negligence, Midwest will not be able to recover 
damages. 
¶ 18 
The defendant attorneys sought an immediate appeal pursuant to Illinois 
Supreme Court Rule 308 (eff. Oct. 1, 2019) to address the question of whether 
section 2-1115 of the Code or the public policy of Illinois bars a plaintiff, in a legal 
malpractice action, from recovering, as compensatory damages, punitive damages 
incurred in an underlying action because of the defendant attorneys’ alleged 
negligence in the underlying action. 
¶ 19 
Because this appeal requires this court to construe section 2-1115 of the Code, 
it involves a question of law. Board of Education of the City of Chicago v. Moore, 
2021 IL 125785, ¶ 18 (statutory construction of a statute presents a question of law). 
Therefore, our review is de novo. Rozsavolgyi v. City of Aurora, 2017 IL 121048, 
¶ 21. 
¶ 20 
A. Statute Barring Punitive Damages Against Lawyers 
and Public Policy Issues 
¶ 21 
The certified question contains two elements: (1) whether section 2-1115 of the 
Code prohibits plaintiffs who bring a legal malpractice action from recovering from 
their defendant attorneys punitive damages actually paid by the legal malpractice 
plaintiffs in the underlying action because of the attorneys’ alleged negligence in 
that action and (2) whether recovery of punitive damages from their attorneys 
violates the public policy of Illinois. 
¶ 22 
1. Section 2-1115 Bars Punitive Damages 
¶ 23 
Section 2-1115 provides, in pertinent part, “In all cases, whether in tort, contract 
or otherwise, in which the plaintiff seeks damages by reason of legal *** 
malpractice, no punitive *** damages shall be allowed.” 735 ILCS 5/2-1115 (West 
2018). 
¶ 24 
The attorneys first maintain that section 2-1115 of the Code prohibits the 
plaintiffs from recovering punitive damages against them. When interpreting 
statutory language, we are to give effect to the plain and ordinary meaning, avoiding 
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absurd, unreasonable, unjust, or inconvenient results. See Cassidy v. China 
Vitamins, LLC, 2018 IL 122873, ¶ 17; In re Mary Ann P., 202 Ill. 2d 393, 406 
(2002). In determining the plain and ordinary meaning of a statute, we must 
consider the statute in its entirety, the subject addressed, and the apparent intent of 
the legislature when it enacted the statute. Hayashi v. Illinois Department of 
Financial & Professional Regulation, 2014 IL 116023, ¶ 16; Blum v. Koster, 235 
Ill. 2d 21, 29 (2009). Unless the words are defined within the statute itself, they will 
be “interpreted as taking their ordinary, contemporary, common meaning.” 
Sandifer v. United States Steel Corp., 571 U.S. 220, 227 (2014). Courts may find 
words’ ordinary, contemporary, common meaning by looking at what they meant 
when the statute was enacted, which is often by referencing dictionaries. See id. 
¶ 25 
2. Punitive Damages Distinguished From 
Compensatory Damages 
¶ 26 
Black’s Law Dictionary defines “punitive damages” or “exemplary damages” 
as 
“damages on an increased scale, awarded to the plaintiff over and above what 
will barely compensate him for his property loss, where the wrong done to him 
was aggravated by circumstances of violence, oppression, malice, fraud, or 
wanton and wicked conduct on the part of the defendant, and are intended to 
solace the plaintiff for mental anguish, laceration of his feelings, shame, 
degradation, or other aggravations of the original wrong, or else to punish the 
defendant for his evil behavior or to make an example of him.” Black’s Law 
Dictionary 352 (5th ed. 1979). 
¶ 27 
Compensatory damages are defined as such damages as will “compensate the 
injured party for the injury sustained, and nothing more; such as will simply make 
good or replace the loss caused by the wrong or injury.” Id. To determine whether 
the recovery Midwest is seeking violates the statute, we must analyze the damages 
sought. In other words, we must consider whether the damages compensate 
Midwest for the pecuniary injury suffered and are, therefore, compensatory 
damages or whether the damages punish the attorneys for their alleged misfeasance 
or nonfeasance and are, therefore, punitive damages. 
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¶ 28 
The attorneys argue that the punitive damages paid in the underlying retaliatory 
discharge action are also classified as punitive damages in the legal malpractice 
action. Midwest argues that the punitive damages incurred in the underlying action 
as proximately caused by the attorneys’ negligence are compensatory damages in 
the legal malpractice action. We agree with Midwest. We find that the punitive 
damages Midwest paid in the underlying retaliatory discharge action are an element 
of compensatory damages in the legal malpractice action because they do not 
punish the attorneys but instead replace the loss caused by the attorneys’ alleged 
misfeasance or nonfeasance. In other words, the damages make Midwest whole by 
compensating it for the entirety of its pecuniary loss (the compensatory and punitive 
damages Midwest paid in the underlying retaliatory discharge action caused by the 
attorneys’ alleged negligence). 
¶ 29 
3. Cases That Bar “Lost” Punitive Damages 
¶ 30 
We recognize that this court, in Tri-G, Inc. v. Burke, Bosselman & Weaver, 222 
Ill. 2d 218, 226 (2006), interpreted section 2-1115 of the Code and also addressed 
public policy concerns with respect to the recovery of lost punitive damages in legal 
malpractice cases. In Tri-G, the plaintiffs initiated a legal malpractice action against 
the defendants, seeking to recover damages sustained in the underlying action in 
the form of actual compensatory damages and lost punitive damages (punitive 
damages that would have been awarded to them) but for the defendants’ negligence. 
Id. at 224-25. We found that lost punitive damages could not be recovered in legal 
malpractice actions for several reasons. First, we found that allowing such recovery 
would be illogical where “the jury has already awarded full compensation to the 
plaintiff for all the damages it actually sustained.” Id. at 267. Second, we found that 
allowing the recovery of lost punitive damages in a legal malpractice action 
contravenes the nature of punitive damages, as they are not awarded as 
compensation “but serve instead to punish the offender and to deter that party and 
others from committing similar acts of wrongdoing in the future.” Id. Third, we 
found that section 2-1115 of the Code “expressly bars recovery of punitive damages 
in a legal malpractice action” and, if the “General Assembly has determined that 
lawyers cannot be compelled to pay punitive damages based on their own 
misconduct, *** it would be completely nonsensical to hold that they can 
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nevertheless be compelled to pay punitive damages attributable to the misconduct 
of others.” Id. at 267-68. 
¶ 31 
In reaching our conclusion in Tri-G, this court gave significant consideration to 
the Supreme Court of California’s decision in Ferguson v. Lieff, Cabraser, 
Heimann & Bernstein, LLP, 69 P.3d 965 (Cal. 2003). In Ferguson, plaintiffs filed 
a legal malpractice action against the defendants, their attorneys in the underlying 
class action, seeking to recover, as compensatory damages in the legal malpractice 
action, punitive damages that were lost or not recovered because of their attorneys’ 
negligence in prosecuting the underlying class action. Id. at 968. The Supreme 
Court of California found that legal malpractice plaintiffs may not recover lost 
punitive damages as compensatory damages. Id. at 969. In so doing, the Ferguson 
court stated several reasons. First, it found that “[i]mposing liability for lost 
punitive damages on negligent attorneys would therefore neither punish the 
culpable tortfeasor [citation], nor deter that tortfeasor and others from committing 
similar wrongful acts in the future.” Id. at 970. Second, it found that permitting 
recovery of lost punitive damages as compensatory damages violates the public 
policy against speculative damages, as punitive damages require a moral 
determination of the amount of damages and not a factual amount based on actual 
damages. Id. at 971. 
¶ 32 
Third, the standard of proof for punitive damages and compensatory damages 
is different in that recovering lost punitive damages requires the plaintiff to 
establish by a preponderance of the evidence that, but for attorney negligence, the 
jury would have found clear and convincing evidence of oppression, fraud, or 
malice. Id. at 972. Fourth, allowing recovery of lost punitive damages would 
adversely affect the overall ability of courts to manage their caseloads by making 
settlement more difficult in cases that involve punitive damages because of the 
potential for dissatisfied clients to seek recovery for negligent undervaluation of 
punitive damages claims. Id. Fifth, allowing recovery of lost punitive damages as 
compensatory damages would exact a societal cost, increasing the financial burden 
on lawyers and likely making it more difficult for consumers to obtain legal services 
or obtain recovery for legal malpractice. Id. 
¶ 33 
The present case is distinguishable from both Tri-G and Ferguson. First, 
Midwest, one of the plaintiffs in the present case, was a defendant in the underlying 
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action and paid compensatory and punitive damages in the underlying action. 
Midwest is not speculating but is certain about the amount of punitive damages it 
paid in the underlying action, and it now seeks to be made whole in the legal 
malpractice action. Midwest had punitive damages assessed against it in the 
underlying retaliatory discharge action and, in the legal malpractice action, it is now 
alleging that it was forced to pay punitive damages in the underlying action because 
of the negligence of its attorneys. Therefore, in this malpractice case, the punitive 
damages Midwest paid in the underlying retaliatory discharge action are 
compensatory damages because they replace the money Midwest paid in the 
underlying action. Permitting Midwest to recover in this malpractice case the 
punitive damages it paid in the underlying retaliatory discharge action would not 
punish the attorneys. Instead, the punitive damages become an element of the claim 
for compensatory damages and make Midwest whole because they replace the 
money Midwest paid in the underlying action. 
¶ 34 
Second, the damages Midwest seeks in the present case are not speculative. The 
exact amount of punitive damages paid is known—$625,000. Should a jury find 
that the attorneys’ alleged negligence proximately caused the pecuniary loss 
Midwest suffered in the retaliatory discharge action, then the jury would not be 
speculating but would know the amount of damages required to compensate 
Midwest for its injury. 
¶ 35 
Third, because the present case involves punitive damages Midwest already 
paid in the underlying retaliatory discharge action, and not lost punitive damages 
(punitive damages not recovered in the underlying action), Midwest would have no 
difficulty proving all the damages it paid in the underlying retaliatory discharge 
action. Before awarding damages in the legal malpractice action, the jury would 
have to determine whether the attorneys’ negligence was the proximate cause of 
Midwest being required to pay damages in the underlying action. If the jury 
determines that the attorneys’ alleged negligence proximately caused Midwest to 
pay punitive damages in the underlying action, the jury would then proceed to 
award Midwest the total compensatory damages that were caused by the attorneys’ 
negligence. 
¶ 36 
Fourth, there is no risk of settlement difficulties in cases, such as this, involving 
recovery for paid punitive damages in an underlying action because the damages 
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paid are fixed and not speculative. The underlying retaliatory discharge verdict 
constitutes demonstrative evidence of the compensatory and punitive damages 
Midwest paid, and the total of these damages are compensatory damages and would 
represent the actual pecuniary loss suffered by Midwest in the underlying action. 
¶ 37 
Fifth, in the present case, there is no risk of a societal cost—potentially 
subjecting attorneys to a greater financial liability or consumers running the risk of 
not being able to obtain legal services or obtain recovery from legal malpractice— 
because the damages recoverable in this case are based on (1) proof of the 
attorneys’ negligent acts and (2) the attorneys’ negligence being the proximate 
cause of the damages actually paid. In the present case, Midwest has already 
incurred a set amount of punitive damages in the underlying action. Legal 
malpractice plaintiffs, like Midwest, who pay punitive damages in the underlying 
action are only seeking, as an element of compensatory damages, the punitive 
damages already paid in the underlying action. 
¶ 38 
4. Cases That Award Paid Punitive Damages 
¶ 39 
While we found no Illinois cases where plaintiffs in a legal malpractice action 
recovered punitive damages paid in an underlying action from their attorneys, we 
find instructive cases from other jurisdictions holding that punitive damages paid 
in the underlying action are recoverable from attorneys as compensatory damages 
in legal malpractice actions. 
¶ 40 
In Hunt v. Dresie, 740 P.2d 1046 (Kan. 1987), the plaintiff, Jack Hunt, brought 
a legal malpractice action against the defendants, Grey Dresie (his attorney) and the 
law firm. Hunt alleged that, but for the negligence of the attorneys allowing the 
statute of limitations to run on his defense in the underlying action, he would not 
have lost the underlying action and, therefore, would not have incurred $20,000 in 
actual damages and $600,000 in punitive damages. Id. at 1048. Accordingly, Hunt 
alleged that the attorneys were liable for his entire pecuniary injury—$620,000. Id. 
The appellate court determined that the attorneys were liable for all the damages 
Hunt paid, including the punitive damages awarded in the underlying action. Id. at 
1056-57. The Supreme Court of Kansas, in affirming the judgment of the appellate 
court, cited the reasoning of the appellate court in support of its decision: 
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“The damages Hunt had to pay [in the underlying action] included damages 
called punitive damages from the vantage point of that lawsuit. From the 
vantage point of this lawsuit, should Hunt be successful, all the damages are 
simply those which proximately resulted from his attorneys’ negligence; they 
are no longer properly called punitive damages.” (Emphasis in original and 
internal quotation marks omitted.) Id. at 1057. 
¶ 41 
We agree with the reasoning of the Kansas Supreme Court. The punitive 
damages Midwest paid in the underlying retaliatory discharge action, because of 
the alleged negligence of the defendant attorneys, were punitive damages Midwest 
paid in the underlying action, which became an element of its claim for 
compensatory damages in this malpractice action. Therefore, as to this legal 
malpractice action, should a jury determine the attorneys’ negligence proximately 
caused Midwest to pay punitive damages in the underlying retaliatory discharge 
action, those damages are no longer punitive; instead, they are an element of 
compensatory damages because they make Midwest whole and replace its loss of 
$625,000. 
¶ 42 
Similarly, in Scognamillo v. Olsen, 795 P.2d 1357 (Colo. App. 1990), the 
Colorado Court of Appeals found that Peter Scognamillo and Harry Faircloth (the 
legal malpractice plaintiffs) were entitled to recover the punitive damages paid in 
the underlying action as compensatory damages in the legal malpractice action. In 
Scognamillo, the legal malpractice plaintiffs, like the plaintiff in the present case, 
were defendants in the underlying action. In that underlying action, Scognamillo 
and Faircloth formed a company with several others and were sued by certain 
investors in that company. Id. at 1358. These investors brought claims of fraud, 
breach of contract, and civil conspiracy in the sale of distributorships against all the 
defendants in the underlying action, including Scognamillo and Faircloth. Id. 
Attorney Robert Olsen and his law firm defended all the defendants in the 
underlying action, including Scognamillo and Faircloth. Id. 
¶ 43 
At the conclusion of trial in the underlying action, a judgment was entered 
against all the defendants, including Scognamillo and Faircloth, in the amount of 
$214,830 in actual damages and $849,020 in punitive damages. Id. Scognamillo 
and Faircloth appealed the judgment using a different law firm. Id. That appeal was 
dismissed as untimely filed. Id. Thereafter, Scognamillo entered into a settlement 
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agreement with the investors releasing him from all claims, appeals, and judgments 
contingent upon his payment of $200,000. Id. 
¶ 44 
Scognamillo and Faircloth brought a legal malpractice action against their 
attorneys (Olsen and his law firm) seeking recovery of the damages paid in the 
underlying action—including the punitive damages or, as to Scognamillo, his 
settlement amount. Id. at 1358-59. Scognamillo and Faircloth alleged that, but for 
their attorneys’ negligence in defending them in the underlying action, they would 
have settled prior to the entry of the judgment in the underlying action. Id. at 1359. 
¶ 45 
At the conclusion of the legal malpractice trial, the jury found in favor of 
Scognamillo and Faircloth and against the attorneys. Id. The jury entered an award 
based on the amount each legal malpractice plaintiff had paid or was required to 
pay based on the underlying judgment, and the award was offset based on, 
inter alia, the legal malpractice plaintiffs’ contributory negligence and the amount 
they would have paid if the underlying case had been settled on the terms upon 
which they were willing to agree. Id. at 1359-60. 
¶ 46 
The attorneys appealed the legal malpractice judgment, arguing, inter alia, that 
the trial court erred in allowing the legal malpractice plaintiffs to include the 
“punitive damages assessed against them in the [underlying action] as a component 
of their actual and compensatory damages” in the legal malpractice action because 
it violated “a number of public policy considerations.” Id. at 1360-61. The Colorado 
Court of Appeals held: 
“[I]f the defendant attorney’s negligence results in entry of a judgment when 
there otherwise would have been no judgment, the proper measure of damages 
is the entirety of the prior judgment regardless of the theory upon which the 
prior judgment was entered or the nature of the damages assessed thereunder. 
[Citation.] 
We see no reason to deviate from these principles in determining the proper 
measure of damages to be applied here.” Id. at 1361. 
In reaching this conclusion, the Scognamillo court reasoned: 
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“[T]he punitive damages contested here are not, as was the case in the 
[underlying action], a separate issue considered and imposed for the purpose of 
punishing a defendant for wrongful conduct. 
A major thrust of the [legal malpractice] plaintiffs’ negligence claim is that 
[the attorneys] had negligently evaluated and advised the [legal malpractice] 
plaintiffs during the [underlying action] ***. Thus, the punitive damages 
assessed in the underlying case are part and parcel of the damages [the legal 
malpractice] plaintiffs suffered as a result of defendants’ alleged negligence.” 
Id. 
¶ 47 
We find the reasoning of the Scognamillo court instructive in the present case. 
Midwest alleges that the punitive damages it paid in the underlying action were 
proximately caused by its attorneys’ alleged negligence. If a jury in the legal 
malpractice action determines that, but for the alleged negligence of the attorneys, 
Midwest would have been successful in the underlying action and no judgment 
would have been entered against it, it follows that Midwest would not have paid 
any damages, including the punitive damages. It also follows that Midwest should 
be repaid for the full pecuniary loss it suffered as a result of a judgment that would 
not have been entered against it but for its attorneys’ negligence. 
¶ 48 
In the case under review, if the attorneys were found to be negligent in their 
defense of Midwest and proximately caused Midwest to be unsuccessful in the 
underlying action and forced to pay punitive damages, they can be held responsible 
for the entirety of the damage award entered against Midwest. The award of 
punitive damages in the underlying action would no longer be punitive in the legal 
malpractice action because it would not punish the attorneys. It would instead 
become an element of compensatory damages because it would repay and make 
Midwest whole for the pecuniary loss it suffered as a result of the attorneys’ alleged 
negligence. 
¶ 49 
We find that, if the punitive damages Midwest paid in the underlying action are 
found to be proximately caused by the attorneys’ alleged negligent conduct in the 
underlying retaliatory discharge action, they are an element of compensatory 
damages in the legal malpractice action and are “part and parcel” of the whole of 
the pecuniary injury Midwest suffered in the underlying action. See id.; see also 
Hunt, 740 P.2d at 1057. Therefore, when the punitive damages paid in an 
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underlying action are proximately caused by the attorney’s alleged negligence, they 
are an element of compensatory damages in a malpractice action when the damages 
are certain and not speculative, compensate the plaintiff for its losses, and do not 
punish the negligent attorney. Accordingly, we find that the recovery of paid 
punitive damages as compensatory damages in a malpractice action would neither 
violate section 2-1115 of the Code nor the public policy of this state. 
¶ 50 
III. CONCLUSION 
¶ 51 
For the foregoing reasons, we answer the certified question in the negative, we 
affirm the judgment of the appellate court, and we remand the cause to the circuit 
court for further proceedings. 
¶ 52 
Certified question answered. 
¶ 53 
Affirmed and remanded. 
¶ 54 
JUSTICES OVERSTREET and HOLDER WHITE took
consideration or decision of this case. 
 no part in the 
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