## I L L I N O I S 

## O F F I C I A L 

## RE P O R T S Appellate Court

Khan v. BDO Seidm an, LLP, 2012 IL App (4th) 120359

Appellate Court Caption SHAHI D R. KHAN; A N N C. K H A N ; UV I A D O L L C; J ONCTI ON, L L C; and L EMAN, L L C, Plaintiffs-Appellants, v. BD O SEI DMAN, L L P; and MI CHAEL COL L I

NS, Def endants-A

ppellees, and GRAMERCY ADVI SOR S
, L L C; GRAMERCY ASSET MANAGEMEN T, L L C; GRAMERCY FI

NANCIAL SERVI CES, L L C; TAL L SHI PS CAPI TAL MANAGEMEN T
, L L C; J AY A. J OHNSTON; MARC HEL I E; DECASTRO, WES T, CHODOROW, GL I CKFI E L D & NASS, I NC.; FI NANCIAL STRATEGY GROUP, PL C; and PA UL SHANB ROM, Def endants.–SHAHI D R. KH AN; ANN C. KHAN; SRK WI L SHI RE I N V E ST M EN T S, L L C; SR K WIL SH I RE PART

N E RS ; SR

K WIL SH I RE I NVESTORS, I

NC. ; T HERMOSPHERE FX PARTNERS, L L C; and KPA S A, L L C, Plaintiffs-Appellants, v. BD O SEI DMAN, L L P; and MI CHAEL COL L I

NS, Def endants-A

ppellees, and DEUTSCHE BA NK AG; DEUTSC HE BA

NK SECURI TI ES, I

NC., d/b/a DEUTSCHE B A N K ; A LE X B R O W N ; D A VID P AR S E ; E QU I L IB R IU M CURRENCY TRADI

NG, L L C; SAMYAK VEERA; GRANT THOR NT ON, L L P; GRAMERCY ADVI SORS
, L L C; J AY A. J OHNSTON; MARC HEL I E; and PAUL SHANB ROM, Defe ndants.

District & N o. Four th District
Docke t Nos. 4-12-0359, 4-12- 0360 cons.

Filed October 17, 2012

Held (Note : Thi s s

yl lab us

con st it ute s no p art of the opi nio n of the cour t but has bee n pre

par ed by th e Repo rt er of D e c i s i o n s f

o r t h e

c o n v e n i e n c e o

f t h e

rea der

. ) The stay of proce eding s enter ed by the trial court in an action arising from the consulting ag ree ment betwee n the parties was modified to e liminate the stay until the brea ch-of -contra ct claims ag ainst some defe ndants wer e arbitrated and to continue the stay for the duration of the appeal t o t h e supreme court filed by defe ndant who prepa re d plaintiffs’ income tax returns, since the breach-of-contr act claims based on tax advice and investment advice wer e specific ally disclaimed by the p a r ti e s ’ a g ree ment.Dec ision Under

Review Appea l from the Circuit Court of Champaig n County
, Nos. 09-L -139, 09- L -140; the Hon. Jeffre y

B. F ord, Judge, pr esiding

.

J udg ment Affir med as modified.

Counsel on Appea l David R

. De ar y (ar g ued) and Carol E. Fa rquhar
, both of L oewinsohn Fleg le Dea

ry , L L P, of Da l l as , Texas, and J ames D. Gre en, of Thomas, Mamer & Haughey , L L P, of Champaig n, for a ppellants.

M i chae l S. Poulos, Andre w R. Giffor d, Mark A. Br adfor d, and Raja Gaddipati, all of DLA Piper L L P (US), of Chicag o, and C ary B. Samowitz (ar g ued), of

DLA Piper L L P (US), of New York, Ne w York, for a ppellees.

Panel J USTI CE APPL ETON delivere d the judgme nt of the court, with opinion.
J ustices Pope and Mc Cullough conc urre d in the judgme nt and opinion.

OP INION

¶ 1 The plaintiffs in these two consolidated appea ls are Shahid R. Khan and his spouse, Ann C. Khan
, al ong with various partne rships and limit ed-liability companies that Shahid R. Khan formed, alleg edly on the advice of BD O Seidman, L L C (B DO), for the purpose of

cre ating tax shelters. Thermosphe re FX P ar t n er s , L L C (Ther mosphere)
, is one of the partne rships. (Wheneve r we ref er to “Kha

n” in the singula

r, we will mean Shahid R. Khan, beca use, acc ording to the complaint, he was the one who transac ted al l t h e business with BD O and the othe r def

endants.) T he only

defe ndants who ar e par

ties to these two appeals,
t h e o n l y appellee s, are BD O and one of its employ ees, Michae l Colli ns. (When ref err i n g collectively to BD O and its employ ees named in these actions, we will call them the “B DO defe ndants.”) Plaintiffs have sued BD O, Colli ns, and other persons and business entities for leadingplaintiffs into some flawe d “tax-advanta g ed investment strate g ies.” ¶ 2 Plaintiffs have been befor e us twice befor e in this litigation. Khan v. BDO Seidman, LLP
, 404 I ll. App. 3d 892 (2010) ( Khan I ); Khan v. BDO Seidman, LLP
, 408 I ll. Ap p

. 3d 564 (2011) ( Khan II ). I n K h a n I
, we decide d which of plaintiffs’ claims ag ainst the BD O defe ndants had to be a

rbitrated pur suant to plaintiffs’ written “ consulting a g ree ment” with

-2-BD O. We held that only the claims for brea ch of contra ct came wit h i n t h e s co p e of the

arbitration clause

. Khan I
, 404 I ll. App. 3d at 895. The Supreme Court of I llinois has denied BD O’s petition for leave to appea l from our judgme nt in Khan I ( Kha n v. BDO Seidman, LLP
, 239 I ll. 2d 555 (2011) (table) ), and the Supreme Court of the United States has denied BD O’s petition for a writ of certiorari ( BDO Seidman, LLP v. Khan , ___ U.S. ___, 132 S. Ct. 96 (2011)). Thus, Khan I has re ache d finality

in the appellate proce ss. ¶ 3 The appellate proce ss is not y et exhausted in Khan II –but first let us rec ount what Khan II is all about. In Khan II

, we reje cted the contention that plaintiffs’ claims ag ainst Deutsche Ba nk AG; Deutsche Ba

nk Securities, Inc.; an d an ac counti ng firm, Gra nt Thornton L L P,

wer e barr ed by statutes of limit ations and a statute of repose

. Khan II
, 408 I ll. App. 3d at 566. (We will ref

er to Deutsche Ba

nk, Deutsche Securities, and their employ ees as the “De utsche Ba nk defe ndants.”) Those three defe ndants in Khan II petitioned the supreme court for leave
to appea l. The supreme court g rante d their petitions and consolidated their appea ls. Khan v. BDO Seidman, LLP
, Nos. 112219, 112221, cons. (Sept. 28, 2011). On Marc h 20, 2012, the
supreme court hear d oral arguments in the consolidated appea ls, and its decision is pending

. ¶ 4 On Marc h 14, 2012, on rema nd from our decisions in Khan I and Khan II
, the trial court
g rante d motions by BD O and Colli ns to stay the trial court proce eding s until (1) the supreme court iss ued it s decision i n Gra nt Thornton’s appe al and (2) plaintiffs’ claims of breach of
contra ct were arbitrated. Pl aintiffs di sag ree with this stay . They appea l pursuant to I llinois Supreme Court Rule 307(a )(1) (ef f. F eb. 26, 2010). ¶ 5 We find no abuse of discretio n i n staying the trial court procee dings until the supreme
court issues its opinion in Gra nt Thornton’s appea l. We find an abuse of discretion, howeve r, in staying the proce eding s until t he cla ims of brea ch of contra ct are arbitrated, consider ing that afte r our analy sis in Khan I
, littl e or nothing of the brea ch-of -contra ct claims is left. There fore
, we modify the stay so as to make it last only for the duration of Gra nt Thornton’s
appea l to the s upreme court. We af firm the trial court’s j udg ment as m odified and rema nd this case for further procee dings subject to the s tay –which the trial court, i n i t s d i s cr etion,
may eventua lly lift if it finds that Gra nt Thornton’s appea l is not proce eding with sufficie nt dispatch.

¶ 6 I . BA CKGROUND ¶ 7 In Champaig n County case Nos. 09-L -139 and 09-L -140, p l ai n t i ff s b ro u gh t actions
ag ainst the BD O defe ndants; the Deutsche Ba nk defe ndants; Gra

nt Thornton, L L P; and other
persons and business entities for duping plaintiffs into setting up tax shelters that the Interna l Revenue Service (I RS) r eg arde d as abusive and illeg al. Acc ordingto the complaints in the
two case s, these tax shelters wer e desig ned to follow, at least ostensibly
, a two -p ro n g ed

s t rate g y –“Plan A” and “Plan B,” so to speak. First, in Plan A, Khan was to make an “investment,” by which, the BD O defendants tol d him, he st ood a good ch ance of m aking a profit. I t is unclea

r how much Khan understood about this “investment,” but it was a bet with Deutsche Ba

nk on what a cer

tain fore ign curr ency would be worth on a cer tain date. I f Khan lost money in t h i s “investment,” he was not to worry , beca use P lan B would kick i n and that very loss would be put to lucrative use. Throug h some transfe rs betwee n

-3-partne rships and limit ed-liability companies specia lly cre ated for this purpose, Khan would

be able to use the “investment” loss as a tax loss, to reduc e his fede ral income tax. Not just one but a se ries of the se tax shelters was c reated. ¶ 8 Both prong s of this “tax-advanta g ed i n v es t m en t s trategy ” wer e a falsehood, pla intiffs alleg e. For one thing, the “investments” wer e desi gn ed t o ensure that Khan would lose
money (and that the broker
, Deutsche Ba nk, would make money

), and further
, plaintif

fs alleg e, it should have been appar ent to anyone with a rea sonable degree of competenc e in tax law that the I RS would disallow the claimed tax losses as a sham–and then impose larg e penalties for

the over due income tax . The stra teg ies appe ar to be variations on the “Son of BO SS” plan, which, reduc ed to its essenc e, works this way

. X pay s Y, say , a milli on dollars. Y pay s X a milli on dollars. X counts the milli on dollars he paid Y as a tax loss without offse tting it by the milli on dollars Y paid him. See 106 Ltd. v. Com mi s s i oner of Internal Rev enue Servic e , 684 F.3d 84, 86 (D.C. Cir

. 2 012). In their complaints in the two case s, p la intiffs raised a varie ty of leg al theories, e.g. , fra ud, neg lige nt misrepre senta ti o n , f r a u d u le nt

conce alment of a cause of action, resc ission, an illusory contra ct, and (as an alternative to the theories of

resc ission and an illusory contra ct) bre ach of

contra ct. ¶ 9 Some of the defe ndants raised af fi rm at ive defe nses. The BD O defe ndants invoked an arbitration agree ment betwee n BD O and Khan. Khan I
, 404 I ll. App. 3d at 894. The Deutsche Ba nk defe ndants invoked the s t at ute of limit ations in section 13-205 of the Code of Civil Procedur e (735 I L CS 5/13-205 (W es t 2 0 08)). Khan II
, 408 I ll. App. 3d at 566. Gra nt Thornton invoked the statute of limit ations in section 13-214.2(a ) (735 I L CS 5/13-214.2(a) (West 2008)), as well as the statute of repose in section 13-214.2(b) (735 I L CS 5/13-214.2(b) (West 2008)). Khan II

, 408 I ll. App. 3d at 566. ¶ 10 In Khan I

, we considere d the BD O defe ndants’ aff irmative defe nse that all of plaintiffs’ claims ag ainst them had to be a rbitrated. ¶ 11 In K

h a n II
, we co nsidered, inter alia
, the aff irmative defe nses of the Deutsche Ba nk defe ndants and Gr ant Thornton that plaintiffs’ c laims ag ainst them were time-barr ed.

¶ 12 A. The Scope of the Ar bitration Clause (

Khan I ) ¶ 13 In prepa

ration for eac h of the “ investments,” which we re supposed to yield a profit for Khan or, alterna

tively
, a loss that, afte r being passed throug h partne rships, would reduc e his fede ral income-tax liab i lity
, BD O require d Khan’ s signature on “consulting ag ree ments,”

eac h of which contained an i dentically worde d arbitration clause

. Khan I
, 404 I ll. App. 3d
at 893, 910

. The trial court held that all of plaintiffs’ claims ag ainst the BD O defe ndants

came within the scope of this ar bitration clause. Id. at 894. ¶ 14 Plaintiffs appea led, an d i n K h a n I we affirmed the trial court’s judgme nt in part a nd

reve rsed it in part, concluding that, by its terms, the arbitration clause cover ed only plaintiffs’ alternative claims ag ainst th e BD O d ef endants for brea ch of contra ct. Id. at 895. (Jus tice Turner dissented in part: he was of the opinion that the arbitration clause cover ed not just the claims of brea ch of contra ct but a ll the claims ag ainst the BD O defe ndants: tort claims and
contra ct claims alike. Id. at 920 (Turne r, J
., specia lly concur ring in part and dissen ting in part).)

-4-¶ 15 I n o u r analy sis in Khan I
, two features of the consulting agree m en t l ed u s t o t h e conclusion that the arbitra tion clause cover ed only the claims for brea ch of contra ct. (We will ref er to “the consulting ag ree ment” in the singula r beca use the consulting agree ments wer e “identica l in their g erma

ne provisions.” Id. at 894.) The first feature was the wording of the arbitration clause itself. The arbitration clause said: “ ‘I f any dispute, controver sy

or claim arises in connec tion with t h e p erformance or breach of this agreem ent and cannot be resolved by fac ilitated neg o t i ati ons (or the parties ag ree to waive that proce ss) then such dispute, controve rsy or claim shall be settled by arbitra tion ***.’ ” (Emphasis added.) Id. at 911. We observe d that, in its wording
, this arbitra tion clause was “more nar ro w t h an the ty pical arbitration clause
, such as the one in [ Prima Paint Corp. v. Flood & Co n kl i n Mfg. Co.
, 388 U.S. 395, 398 (1967)], which ref err ed to ‘ “any controve rsy or claim arising out of

or relating to this Ag ree ment.” ’ ” Id. at 913. The arbitration clause in the co n s u l t i n g ag ree ment betwee n BD O and Khan “conte m p l at e[ d] the arbitration of a narr ower class of claims–those relating t o the perf ormanc e of the ag ree ment–not claims relating to the
ag ree ment.” Id. at 913-14 (c iting Midwest W indow Sy stems, Inc . v. Amc or Industries, Inc.
, 630 F.2d 535, 537 ( 7th Cir. 1980)). ¶ 16 The second signific ant feature of the consulting ag ree ment was the languag e spec ifically excluding cer

tain activities from BD O’s promised perf ormanc e. The consulting ag ree ment said: “ ‘B DO is not in the business of providing investment advice or service s, thus, none of the s ervic es t o be rendere d are to be co n sidered as investment advice
, and it is understood that the Client is not relying upon BD O for investment advice o r s er v i ces.’ ” (Emphasis omitted.) Khan I

, 404 I ll. App. 3d at 914. Also, t h e consulting ag ree ment said: “ ‘B DO’s Service s here under do not include, and BD O assumes no responsibility whatsoeve r for, any leg al and/or tax opinions reg arding any strateg ies that may be implemented, and has advised the Client to reta in a law firm for leg al and/or tax opinions on any strateg ies or transac tions they [ sic ] enter into.’ ” Id. at 897. ¶ 17 Thus, the consulting ag ree ment specific ally excluded investment advice and tax advice from BD O’s promised perf ormanc e. Those exclusions wer e signific ant for p u rp o s es of arbitra bility
, beca

use, acc ording to the various counts in plaintiffs’ complaints, BD O’s bad investment advice and bad tax advice (or the bad tax advice of law firms with which B DO

was in c ahoots) we re the proxi mate ca uses of plaintiffs’ damag es. BD O advised Khan that he could make money in the “investments” ( id. at 895), wher eas, in rea lity
, the “investments”

wer e structure d so as to ensure that he would lose money ( id. at 898-99). BD O assure d him that if he lost money

in the “investments,” he could claim tax losses ( id. at 895), and B DO
sent him to supposedly independe nt but actua l l y co m p romised law firms to obtain confirmation of this falsehood throug h “ ‘pre -wire d’ ” leg al opinions ( id. at 900). Plaintiffs’ alleg ations that BD O g ave Khan this bad investment advice and bad tax advice (or that BD O dece ptively ref

err ed him to coconspiring lawy ers, by which BD O beca me liable for their bad
tax advice ) wer e outside the scope o f t h e arbitration clause beca use (1) the consulting
ag ree ment specific ally excluded those ac tiviti es fr om BDO ’s contractual performa nce and (2) the arbitra

tion clause cover ed only claims “ ‘ar is[ ing] in connec tion with the perf ormanc e

or brea ch of this ag ree ment’ ” ( id. at 897). Id. at 916, 919. Of all the claims in plain t i ff s’ complaints, which consisted mostly of tort claims, the arbitration clause cover ed only those

-5-for br eac h of contra ct. Id. at 895. And bad inve stment advice and bad tax advice could not

possibly be a brea ch of the contra ct betwee n plaintiffs and BD O, g iven the disclaimers in the consulting a g ree ment.

¶ 18 B. The Statutes of L imitations and Statutes of Repose ( Khan II ) ¶ 19 I n the judgme nt that we reve rsed in Khan II
, the trial court h el d t h at t h e s t at u t e o f limit ations in section 13-205 (735 I L CS 5/13-205 (West 2008)) barr ed the actions ag ainst the Deutsche Ba

nk defe ndants and that the statute of limit ations in section 13-214.2(a ) (735 I L CS 5/13-214.2(a) (West 2008)) as well as the statute of repose in section 13-214.2(b) (735 5/13-214.2(b) ( West 2008)) barr ed the a ctions ag ainst Grant Thor nton. ¶ 20 We first will rec ount the trial court’s analy sis reg arding the Deutsche Ba nk defe ndants, followed by the rea sons we g ave in Khan II for disag ree ing with that analy sis. Then we will

rec ount the trial court’s an al y s i s reg arding Gra nt Thornton, followed by our rea sons for disag ree ment.

¶ 21 1. The Trial

Court’s Analysis Regarding the DeutscheBank De fendants ¶ 22 Section 13-205 (735 I L CS 5/13-205 (West 2008)) is a five-year statute of limit at i o n s , which applies to actions for common-law fra ud and other tortious misrepre sentations. Chicago Park Di strict v. K enroy, Inc.
, 78 I ll. 2d 555, 560-61 (1980) (quoting then s ection 22 o f t h e L i m i t ations Act (I ll. Rev. Stat. 1975, ch. 83, ¶ 23)). The statute provides: “[A]l l civil actions not otherwise provided for[ ] shall be commence d within 5 y ear s next afte r the

cause of ac tion accrue d .” (Empha sis added.) 735 I L CS 5/ 13-205 (West 2008). ¶ 23 Reg ardle ss, though, of when a cause of action acc rues, the discovery rule postpones the running of the statute of limit ations until the date when the plaintiff knows, or re asonably should know, that the injury has bee n wrong fully cause d. Khan II
, 408 I ll. App. 3d at 596. This is not to say that the statute of limit ations waits until the plaintiff knows, or rea sonably should know, the full exte nt of the wrong fully cause d injury

. Id. Rather, the statutory period beg ins runn i n g j u s t as soon as the plaintiff become s awa re, or rea sonably should become

awa re, of the exist ence of some wrong fully cause d injury

. Id. ¶ 24 Acc ordi n g t o t h e t ri al co u rt , t h e ea rliest harm that the Deutsche Ba nk defe ndants
wrong fully cause d and of which the Khans rea sonably should have been awa re was the $1,275,000 they paid Deutsche B ank for “ ‘br okering ’ ” the foreig n-cur renc y transac tions. Id. at 592, 596. Once the Khans beca me awa re, or once they had notice, that the I RS would disallow the claimed losses, it should have been appar ent to them that they had been misled into payin g t h i s $ 1
, 2 7 5,000. Id. at 596. The court found that when the Khans hired a tax attorney in May 2003 to repr esent them i n an I R S au d it, they should have discovere d that their pay ment of the $1,275,000 to the Deutsche Ba nk defe ndants had been wrongfu l ly

cause d, beca

use their tax attorney , in the exercise of due diligenc e, should have discovere d
t h e I R S notices reje cting the ty pe of tax-advantag ed “investment strateg ies” that the coconspiring defendants had foisted on the Khans. Id. Be cause the Khans filed their complaint in J uly 2009, more than five y ear s afte r May 2003, the court held that the five-year period o f l i mitation in section 13-205 barr ed their claims ag ainst the Deutsche Ba nk

-6-defe ndants. Id. at 597. (F or purposes of its a naly sis, the court used what appea red to be the longe st applicable statute of limit ations. The court ruled out the 10-y ear statute of limit ations in section 13-206 (735 I L CS 5/13-206 (West 2008)) because the court reg arde d plaintiffs’
contra ct claims as disguised tort claims and, acc ording to c ase law, one c ould not lengthe n the time for filing suit by dressing up a tort claim as a contra ct claim. Khan II
, 408 I ll. App. 3d at 597.)

¶ 25 2. Our Disagreeme nt W ith the Tri al Court’s Analysis Regarding the De utsche Bank Defendants ¶ 26 We disag ree d wi t h t h e t ri al court’s analy sis reg arding the Deutsche Ba nk defe ndants beca use, first, in return for the transac tion fee s that plaintiffs paid the defe ndants, plaintiffs

wer e promised either a profit from the “investments” or , alternatively
, a tax loss and, second,
reg ardle ss of any ominous rumblings from the I RS, plaintiffs wer e not deprive d of their tax loss until the I RS actua lly took it awa y from them by imposing an assessment. Presumably
, in the contemplation o f t h e p arties, the pay ment of $1,275,000 to the Deutsche Ba nk defe ndants would have been worthwhile if, despite the immediate failure of the “investment” (or, r ather , beca

use of it), plaintiffs we re a ble to claim a tax loss. See id. at 607 (“ Until the I RS disallows the loss and, conseque ntly
, assesses the defic iency along with the interest and penalties, the fee s that plaintiffs paid to defe ndants ar e n o t y et a waste, beca use plaintiffs have not y et been deprive d of the contemplated benef it of their barga i n , n amely
, the al t er n at i v e benef

it of a tax loss.”). In short, Plan B was just as acc eptable as Plan A. The notices that the I RS sent out to the g ener al public did not deprive plaintiffs of their claimed
tax loss. Plaintiffs would not actua lly lose their tax loss until, in their specific case , the I RS finally and definitively took it awa y throug h an assessment or until plaintiffs settled with the I RS–a point we g leane d from Fede rated Industries, Inc. v. Reisin
, 402 I ll. App. 3d 23 (2010), and International Engine Parts, Inc. v. Fedde rsen & Co.
, 888 P.2d 1279 (Cal. 1995). Those authorities taug ht that a misadvised t axpay er in plaintiffs’ position would not suffe r ac tual dama g es, and conseque ntly a cause of action would not acc rue, until the ear liest of two events: (1) the I RS made an assessment ag ainst the taxpay er (the final step of the I RS’s

assessme n t p roce ss, not to be confuse d with an ear lier step, the issuance of a notice of defic iency

), or (2) the taxpay er ag ree d wi t h the I RS to pay additional taxes, penalties, or interest that the taxpay er would not have had to pay but for the tax advisor’s bad advice

. Khan II
, 408 I ll. App. 3d at 602. (We should emphasize that, unlike us, the trial court did not have the benef

it of Fede rated

. The First District issued its dec i s i o n i n Fede rated afte r the trial court f

iled its decision.) ¶ 27 In addition to citing and discussing Fede rated and Fedde rsen , we pointed out the dang er of an unjust re sult if an action for bad tax advice ha d to be filed be fore the claim wa s truly ripe. I f a taxpay er had to file an action ag ainst the alleg edly neg lige nt tax advisor befor e the I RS made an assessment or befor e the taxpay er ag ree d to pay the I RS an additional amount,

a fiasco could unfold. The plaintiff could win a money judgme nt ag ainst the tax advisor, and then, for whateve r reason and ag ainst all expectation, the I RS co u l d let the deadline g o by for filing an assessment–with the unjust result that the taxpay er would g et to keep the tax as

-7-loss well as the money judgme nt premised on the now-proble matic theory that claiming the

tax l oss had ca

used the taxpay er pe cuniar y harm. Id. at 601. ¶ 28 T h e h arm from underpa ying one’s fede ral income taxes– t h e h am m er

– wa s an I R S
assessment or, alternatively
, a settlement with the I RS. Requiring the taxpay er to file a claim befor e that harm happene d was tantamount to requiring the taxpay er to file an unripe claim. Consequently
, we concluded that the t rial court h ad er red in dismiss ing the claims ag ainst the Deutsc he B ank def

endants a s time-barr ed. Id. at 603. We said:
“Indee d
, we h o ld, as a matter of law, that the actions ag ainst those defe ndants are not time-barr ed, g iven the alleg ations of the complaint. We find no i ndication in the complaint that more than five y ear s (or even two y ear s) have elapse d since an assessment

or settlement with the I RS. Until an assessment or settlement, there was no actua l harm and hence no acc rual of a cause of action–eve n if, by May 2003, it had become abundantly clea

r to Khan that defe ndants had g iven him false advice

. Neg lige nce without harm doe s not make a c ause of action.” Id.

¶ 29 3. The Trial Court’s Analysis Regarding Grant Thor nton ¶ 30 a. The Statute of L imitations in Section 13-214.2(a) ¶ 31 The trial court held t h at t h e t wo-y ear statute of l imitations in section 13-214.2(a) ( 735 I L CS 5/13-214.2(a) (West 2008)) barr ed plaintiffs’ claims ag ainst Gra nt Thornton. Section 13-214.2(a ) provides: “Ac tions based upon tort, contra ct or otherwise ag ainst any person, partne rship or corpor ation reg istered pursuant t o t h e I l l inois Public Acc ounting Act, as amende d [(225 I L CS 450/0.01 to 32 (West 2008))], or any of its em p l o y ee s , partne rs, members, office rs or share holders, for an act or omission in the perf ormanc e of profe ssional service s shall be commence d within 2 y ear s from the time the pers o n b ri n ging an action knew or should rea sonably have known of such act or omission.” 7 35 I L CS 5/13-214.2(a) (West 2008). The court used the same rea soning reg arding Gra nt Tho rn t o n t h at it used
reg arding the Deutsche Ba nk defe ndants–only the period of limit ation for actions ag ainst an

acc ounting f

irm, such as Gr ant Thornton, wa s shorter.

¶ 32 b. The Statute of Repose in Section 13-214.2(b) ¶ 33 In addition to holding that th e s t at u t e o f l i m i t at ions in section 13-214.2(a ) bar red plaintiffs’ claims ag ainst Gra nt Thornton, the trial court held that t h e s tatute of repose in section 13-214.2( b) (735 I L CS 5/ 13-214.2(b) (West 2008)) likewise ba rre d those claims. ¶ 34 Section 13-214.2(b) provides as f ollows:
“In no event shall such action be broug ht more than 5 y ears af t er t h e date on which

occur red the act or

omission alleg ed in suc h action to ha ve been the cause of the injury
to the person bring ing such action ag ainst a public acc ountant. Provided, howeve r, that i n the event that an income tax assessment is made or criminal prosec ution is b ro u gh t ag ainst a person, that person may bring an action ag ainst the public acc ountant who
prepa red the tax return within two y ear s from the date of the assessment or conclusion of the prose cution.” 735 I L CS 5/ 13-214.2(b) (West 2008).

-8-¶ 35 Plaintiffs’ only alleg ation ag ainst Gra nt Thornton was that it had prepa red and signe d the fede ral and state income tax returns for one of the partne rships, Thermosphe re, for the y ear 2000 and that these tax returns had claimed the losses from the “investments.” The err or had flowed into the individual returns of the partne rs, the Khans, causing them to underpa y their
taxes. Khan II

, 408 I ll. App. 3d at 575-76. Be cause the Khans, howeve r, did not file th eir complaint until 2009, the trial court held that the five-year statute of repose in section 13- 214.2(b) ba

rre d their cla ims ag ainst Grant Thor nton. Id. at 609. ¶ 36 T h e t ri al co u rt i n t er prete d the “[p] rovided” sentenc e in section 1 3 -2 1 4

. 2 (b ) as “conde nsing,” rathe r than leng thening
, the five-year p eriod. I t appea rs that, under the trial court’s interpre tation, if the I RS assessed a defic iency or if the plaintiff wer e prosec uted for violating a tax law, the plaintiff had less than five y ear s afte r the defe ndant’s act or omission
to file suit; the plaintiff had to file suit within two y ear s afte r t he assessment or the conclusion of the pr osecution. Id. at 610-11.

¶ 37 4. Our Disagreem ent W ith the Tri al Court’s Analysis Regarding Grant T hornton ¶ 38 a. The Statute of L imitations in Section 13-214.2(a) ¶ 39 Be cause the Khans would not suffe r any actua l harm from the d ef ec t i v e i n co m e-tax returns until the I RS assessed a defic iency or the Khans ag ree d to p ay t h e I RS some additional amount in settlement of the I RS proce eding s o n their individual tax returns for 2 0 0 0, we held that the statute of limit ations in section 13-214.2(a ) did not bar the action s ag ainst Gra

nt Thornton. Every

thing we said about “ac tual harm,” in our discussion reg arding the Deutsc he B ank def

endants, “ applie[d] with equal for ce to Gr ant Thornton.” Id. at 604. ¶ 40 Even the attorney fee s the Khans ha d incurre d in the I RS audit we re mere ly a potential harm until the I RS assessed a defic iency as a result of the err ors in the tax returns that Gra nt Thornton had pr epar ed. Id. at 607. Dra wing an analog y

from an attorney

malprac tice ca se, Lucey v. Law Offices of

Pretzel & Stouffer, Chartered
, 301 I ll. App. 3d 349, 355 (1998), we held: “The attorney fee s that plaintiffs incurre d in the I RS audit are damag es only upon the filing of an assessment by the I RS or only when plaintiffs are forc ed to se ttle w ith the I RS, whicheve r eve nt comes ea rliest.” Khan II

, 408 I ll. App. 3d at 609.

¶ 41 b. The Statute of Repose in Section 13-214.2(b) ¶ 42 We disa g ree d with the trial court that the “[p] rovided” sentenc e in the statute of re pose (735 I L CS 5/13-214.2(b) (West 2008)) s h o rt ened the five-year period of limit ation in the
prec eding sentenc e of the statute. Instead, we interpre ted section 13-214.2(b) to mean that, notwithstanding the expiration of the five-year period in the first sentenc e, the plaintiff might bringan ac tion ag ainst the ac countant within two y ear s after an asse ssment. We reasone d:
“The trial court’s interpre tation might be more convincing if the statute said that the plaintiff ‘shall’ bring the action ag ainst the public acc ountant within two y ear s afte r the date of the assessment. Instead, the statute uses t he permissive verb ‘may .’ The statute say s that th e p l ai n t i ff ‘may ’ bring the action within two y ear s afte r the assessment–sug g esting that notwithstanding the first sentenc e of sectio n 1 3 -214.2(b)
,

-9-which say s that actions ag ainst an acc ountant are barr ed five y ear s afte r the harmful act

or omission, the plaintiff has permiss ion to bring the action within two y ear s afte r an assessment. P ermission would be nec essar y , for pur poses of the statute of

repose , only if the five-year period in the first sentenc e of section 13-214.2(b) had expired.” Khan II
, 408 I ll. App. 3d at 611.
In other words, “[p] rovided” was a qualifying word, making an ex ce p t ion to the five-year period by g iving the a g g rieve d taxpay er pe rmission to sue the acc ountant within two y ear s afte r the a ssessment. ¶ 43 Gra

nt Thornton argued, howe ver, that, in or der f or the “ [p] rovided” qualification to be applicable
, the acc ountant had to pr epar e the plaintif f’s tax re turn and the I RS had to make

an assessment ag ainst the plaintif f

. Id

. at 612-13. Be cause Gra nt Thornton prepa

red the income tax returns for Thermosphe re instead of for the Khans an d b ec ause the I RS

commence d assessment proce eding s ag ainst the Khans individually instead of ag ainst Thermosphe re, Gra

nt Thornton argued that the qualification in section 13-214.2(b) was, by its terms, inapplicable. Id. at 613. ¶ 44 We reje cted th i s ar gu m en t b y Gra nt Thornton beca

use section 13-214.2(b) did not
actua lly say that the return had to be the injured person’ s return. Id. Instead, the qualification in section 13-214.2(b) said: “ ‘[I ]n the event that an income t ax as s es sment is made ***
ag ainst a person, that person may bring an action ag ainst the public acc ountant who prepa red the tax return within two y ear s from the date of the assessment ***.’ ” Id. (quoting 735 I L CS 5/13-214.2(b) (West 2008)). The statute said “ ‘the tax return,’ ” not “the person’ s individual
tax return.” Id. W e i n ferred: “The leg islature must have been awa re that the neg lige nt prepa ration of a partne rship’s return [could] cause individual returns to be incorre ct and result in assessment proc eeding s ag ainst individuals.” Id.

¶ 45 I I . ANALYSI S ¶ 46 A. Our Subjec t-Matter Jurisdiction ¶ 47 We f

irst must resolve the question of whe ther we have subje ct-matter jurisdiction over these two appea ls. On this question, plaintiffs invoke I llinois Supreme Court Rule 307(a) (1) (ef f. Fe b. 26, 2010). That rule provides: “An appea l may be taken to the Appel l at e C o urt from an interlocutory order of court *** g ranting
, modifying, ref using, dis s o lv in g , o r r e f

u s in g to dissolve or mo d i fy an i njunction ***.” Id. An order g ranting a stay of proce eding s is a preliminary

injunction, appea lable under Rule 307(a) (1). TIG InsuranceCo. v. Canel , 389 I ll. App. 3d 366, 371 (2 0 0 9 ); P r o p erty Management, Lt d. v. Howasa, Inc.
, 14 I ll. App. 3d 536, 539 (1973); Valente v . Maida , 24 I ll. App. 2d 144, 149-50 (1960). ¶ 48 Def

endants take the position, howeve r, that the tri al co u rt ’s “O rd er on Motion for Protective Orde r and Stay Pursuant to Supreme Court Rule 201” (I ll. S. Ct. R. 201 (ef f. J uly 1, 2002)) rea lly is not an injunction but instead is a “ ‘routine discovery order .’ ” Goodrich Corp. v. Clark
, 361 I l l

. Ap p

. 3d 1033, 1039 (2005). “Discove ry order s ordinarily are not subject to interlocutory appea l beca use they only regulate the proce dural aspec ts of the case befor e the court.” Id. The same is true of other “orde rs proper ly char acte rized as ‘ministerial’ or ‘a dminist rative.’ ” Id. at 1039-40.

-10-¶ 49 Henc e, just beca use an order require s parties to do something or to ref rain fr om doing something–f

or example, just beca

use an ord er re q u i res parties to ref rain from perf

orming discovery –it does not nece ssarily follow that the order is an injunction. Even though “ministerial” or

“administrative” order s, such as discove ry order s, impose r equire ments or prohibitions, they are not injunctions. Id. An order is an injunction on l y if it is the ty pe of order that, traditionally
, a court of equity would issue in the enfor cemen t o f equit able principles. In re A Minor
, 127 I ll. 2d 247, 261-62 (1989). The supreme court has explained:
“Not ever y nonfinal order of a court is appea lable, even if it compels a party to do or not do a particula

r thing. Orde rs of the circ uit c ourt which can be proper ly char acte rized as ‘ministerial,’ or ‘administrative’–be cause they regulate only the proce dural details of litigation befor e the court–c annot be the subject of an interlocutory appea l. (See People

ex re l. Scott v. Silverstein (1981), 87 I ll. 2d 167, 171 (stating that discovery order s and subpoenas are not appea lable interlocutory order s).) Such order s may be considere d noninjunctive beca

use they did not form part of the power traditionally rese rved to courts of equity
, but, instead, wer e part of the inhere nt power possessed by any court to compel witnesses to appea

r befor e it and g ive testimony

. (See JFS v. ABMJ (1983), 120 I ll. App. 3d 261, 262.) They do not aff ect the relationship of the parties in their ever y day activity
apar t from the litigation, and are there fore distinguishable from traditional forms of injunctive relief

.” Minor , 127 I ll. 2d at 261-62. ¶ 50 The final sentenc e of this quotation cre ates a contra diction by i m p l ying that unless an order “af fec t[ s] the rela

tionship of the p ar t i es i n their ever y day activity apar

t from the litigation,” the or der doe s not f all within a

ny of the “tra ditional f

orms of injunctive re lief.” Id. The contra diction is this: the supreme court just g ot throug h saying, two para g raphs

ear lier in Minor
, that a stay of litigation was an injunction ( id. at 260); but a stay of litigation would not nece ssarily aff

ect the parties “in their ever y day activity apar

t from the litigation” ( id. at 262). Reg ardle ss of whether a stay has any quotidian eff ect, a stay is indisputably a “tra ditional form[ ] of injunctive re lief.” Id. ¶ 51 “The use of injunctions to stay actions at law was almost coeva l with the establishment of the chanc ery jurisdiction.” 4 J ohn Norton Pomeroy , A Tre atise on Equity J urisprudenc e § 1360, at 3248 (1919). In Eng land, the co u rt of chanc ery could never have built up its equitable jurisdicti o n without “the instrumentality of the injunction restra ining the
prosec ution of leg al ac tions, where the defe ndants soug ht the aid of chanc ery , which alone could take cognizance of the equities that would defe at a rec overy at law ag ainst them.” Id. “Ind eed the occa sions on which an injunction may be used to stay proce eding s at l aw ar e almost infinite in their nature and circ umstances.” 2 J oseph Story
, Commentaries on Equity J urisprudenc e as Administered in E ng land and Americ a § 1206, at 566-67 (WH. Ly on, J r., ed

. , 1 4 t h ed. 1918). See also Chapman v. American Surety Co.
, 261 I ll. 594, 599 (1914 ); School District No. 46 v. Del Banco , 68 I ll. App. 2d 145, 152 (1966). ¶ 52 On the one hand, in the passag e from Minor quoted above, the supreme court a pproves of case s holding that stay s of litigation are appea lable injunctions ( Minor
, 127 I ll. 2d at 260- 61 (citing
, among other case s, Valente and School District No. 46 )), but, on the other hand, the supreme court implies that, in order for a judicial direc tive to qualify as an injunction, it
must “af fec t the relationship of the parties in their ever y day activity apar

t from the litigation”

-11-( id. at 262). B eca use it strikes us as improbable that the supreme c ourt, in Minor , intended
to overr ule the line of case s holding that a stay is an appea lable injunction ( e.g. , Disciplined Inve stment Advisors, Inc. v. Schweihs
, 272 I ll. App. 3 d 6 8 1, 691 (1995); Atkins v. Rustic W oods Partners
, 171 I ll. App. 3d 373, 377 (1988); Valente
, 24 I l l

. Ap p

. 2d at 149- 50)–espe cially considering that the supreme court cited Valente with approva l in that respe ct ( Minor
, 127 I ll. 2d at 26 0 )– we re solve the apparent contradiction by rea ffirming the l ong

held view that a

stay of proc eeding s is indeed an injunction. ¶ 53 An order could eff ectively stay proce eding s by staying discovery
, but, ev e n so, Minor and Silverstein appea

r to sug g est that such an or der w ould not be an injunction. Minor
, 127 I ll. 2d at 262; Silverstein
, 87 I ll. 2d at 171. “[ D] i s co very order s *** are not appea lable interlocutory

order s.” Minor , 127 I ll. 2d at 262. ¶ 54 The trial court’s order in the prese nt case purports to be “p ursuant to I llinois Supreme Court Rule 201,” a rule entitled “Ge nera l Discover y Provisions,” and defe ndants insist that the order is nothing more than a discovery order

. Rule 201(c) (1), which the trial court quotes in its order
, descr ibes the protec tive order s a trial co u rt m ay en ter in its regulation of discovery

. The rule provides: “The court may at any time on its own initiative, or on motion of any part y or witness, make a protec tive order as justice require s, denying, limit ing, cond i t i oning, or regulating discovery to preve nt unrea sonable annoyance , expense, embar rassment, disadva

ntag e, or oppr ession.” I ll. S. C t. R. 201(c)(1) (ef f. J uly 1, 2002). I f the court’s order in the prese nt case wer e indeed a protec t i v e o rder pursuant to Rule 201(c) (1), and nothing more, we would lack subject-matter jurisdiction beca use such a protec tive order would be a discovery order and the supreme court has flatly s aid that “discove ry

order s *** are not appea lable interloc utory order s.” Minor , 127 I ll. 2d at 262. ¶ 55 But is that all the trial court’s order is, a protec tive order pursuant to Ru l e 2 0 1 (c) (1)? “The appea lability of an order is deter mined by its substance rathe r than its form.” Boonstra v. City of Chicago , 214 I ll. App. 3d 379, 385 (1991). L ikewise, the c hara cter of a ple ading is deter mined by its content, not its label. Sarkissian v. Chicago Board of Education
, 201 I ll. 2d 95, 102 (2002). Although BD O’s and C o llins’s motions invoked Rule 201(c) (1), the motions actua lly soug ht more than a protec t i v e o rder regulating discovery

. As plaintiffs observe in their reply brief
, t h e motions soug ht “a protec tive order and stay of the instant
proce eding s,” to quote the motions. (Emphasis added.) Acc ording ly
, when the court g rante d the m otions, it did more than enter a “protective order *** denying *** discovery” for the time being (I ll. S. Ct. R. 201(c) (1) (ef f. J uly 1, 2002)); the concluding sentenc e of the court’s order say s: “BD O Def

endants’ (which will include De fenda nt Paul Shanbrom) Motion for Protective Orde r and Stay is allowed.” (Emphasis added.) Thus, the court exercised not only its power under Rule 201(c) (1) to re gu l ate discovery but also its common-law equitable
power to stay the entire litigation pending befor e it. Such a stay is an appea lable injunction. Under Rule 307(a) (1), we have subject-matter ju ri s d i ct ion over these appea ls. See Minor
, 127 I ll. 2d at 261; Disciplined Inve stment , 272 I ll. App. 3d at 691; Atkins , 171 I ll. App. 3d at 377; Valente , 24 I ll. App. 2d at 149-50.

-12-¶ 56 B. Staying the Cases Until Resolution of
Gra nt Thornton’s Appea l to the Supreme Court ¶ 57 1. Guidance F rom Fede ral Case Law ¶ 58 The parties agree on the standard of revie w; they ag ree that (assuming we have subjectmatter jurisdiction) we should decide whether the trial court abused its discretion by staying the proce eding s. See Philips Electronics, N.V. v. New Hampshire Insurance Co.
, 2 9 5 I l l

. App. 3d 895, 902 (1998). They disag ree , howeve r, on how much overla p must exis t betwee n the BD O defe ndants’ case and Gra nt Thornton’s appea l befor e a stay of litigation in the trial
court is justified. Plaintiffs argue that if some of the defe ndants in a case file an interlocutory
appea l, a trial cour

t would be justified in staying the litigation ag ainst the other defe ndants only if the pending appea l could potentially dispose of a l l t h e claims ag ainst those other defe ndants, not just som e of the claims ag ainst them. ¶ 59 Initially
, we remark that this argument is counterintuitive. Assume, for instance, that a pending appea l involves 9 of the 10 claims made in the trial court. I t would seem strang e to argue that a stay is unjustified simply beca use the appea l c annot dispose of the tenth claim. ¶ 60 Gra

nted, courts deem a stay to be a sound exercise o f d i s cretion if the appea l has the potential of being completely dispositi ve. Plaintiffs cite, for example, Morriso n v. Y TB International, Inc.
, C i v i l No. 08-565-GPM, 2010 WL 1931127, at *1 (S.D. I ll. May 13, 2010) (her einaf

ter Morrison ). See Fe d. R. App. P. 32.1 (“A court may not prohibit or restric t the citation of fede ral judicial opinions *** that have been *** desig nated as ‘unpublished[ ]’ *** and *** issued on or afte r J anuar y 1, 2007.”). Acc ording to plaintiffs, Morrison stands for the following proposition: “Unde r I llinois law, a court is within its discretion to stay a

case when a ruling

– which may be dispositi ve of the case at hand –is pe nding in that c ase or in a sepa rate proce eding .” (Empha sis in original.) ¶ 61 Actua l l y , wh en it comes to a stay , Morrison say s nothing about I llinois law; a stay is
proce dural, and hence
, under the Erie doctrine ( Erie R. Co. v. Tom

p ki n s , 3 0 4 U.S. 64 (1938))
, “[t] he determination of w h et h er to stay a federa l court procee ding is g overne d by fede ral law” (

Abdullah Sayid Rajab Al-Rifai & Sons W .L.L. v. McD onnell Douglas Foreign Sales Corp.
, 988 F. Supp. 1285, 1291 (E.D. Mo. 1997)). See Hanna v. Plumer
, 380 U.S. 460, 465 (1965) (“[F]edera l courts [ sitti ng in d i v er s i t y cases] are to apply state subs tantive l aw and fe dera l proce dural law .”). ¶ 62 Even under fede ral law, just beca use a trial court is, a s plaintiffs rig htly say , “within its discretion” by staying litigation pending an interlocutory appea l that could d ispose of all issues, it does not follow that a court is outside its discretion by staying litigation pending an interlocutory appea l that could dispose of signific ant issues, though not all the issues. In other words, Morrison does not sug g est that the potential dispositi on of all issues is the sine qua

non of a stay

. Rather, Morrison say s: “Ty pically
, an appropr iate exercise o f a court’s discretion to enter a stay is a situation in which a ruling dispositi ve of a case is pending either in the ca se i n which a stay is under consideration or i n a separate matter.” Morrison
, 2010 W L 1931127, at *1. “Ty

pically” does not mean “alway s,” and “ an appropr iate ex erc ise o f

a court’s discretion” is not nece ssarily the only appropr iate exercise of a court’s discretion. (Emphasis adde d.) Id.

-13-¶ 63 In fac t, fede ral c ourts have r ejec ted the asse rtion that the separ ate pr ocee ding ha s to be

potentially dispositi ve in order to justify a stay

. The Supreme Court ha s said that the issues in the two proce eding s do not have to be “identica l.” Landis v. North American Co.
, 299 U.S. 248, 254 (1936). And the Nint h Circuit has said: “[A] trial court may , with propriety
, find it is eff icient for its own docket and the faire st course for the parties t o en t er a stay of an action befor e it, pe nding r esolution of independe nt proce eding s which bear upon the c ase

. This rule applies whether the separ ate proce eding s are judicial, administrative, or arbitra l in char acte r, and does not require that the issues in such procee dings are nece ssarily controlling of t he action beforethe court .” (Emphases adde d and interna l quotation marks omitted.) Mediterr

a n e a n E n terprises, Inc. v. Ssangyong Corp.
, 708 F.2d 1458, 1465 (9th Cir. 1983). See also Lakeland Village Homeowne rs Ass’n v. Great American Insurance Group
, 727 F. Supp. 2 d 8 8 7, 897 (E.D. Cal. 2010) (“Since three of [t he] [p] laintiff’s four claims
ag ainst [t he defe ndant] are based upon [t he appea led issue], [i ]t would be a waste of judicial and party resour ces to proce ed with [t hese] claims while the appea l i s p en d ing.” (Interna l quotation marks omitted.)); Ass’n of Irritated Residents v. Fred Schake l Dairy
, 634 F. Supp. 2d 1081, 1094 (E.D. Cal. 2008) (eve n though the interlocutory appea l could dispose of only

one of the t h re e cl ai m s , a stay was worthwhile beca use “a resolution of the interlocutory
appea l reg arding the third cause of action in favor of [t he] [d] efe ndants would alter the direc tion of the curr ent proce eding s, and might prompt the filing of an amende d complaint”). So, if we take our cue from nonbi nding f eder al authority , the pendinginterlocutory appea l does not have to be potentially dispositi ve or controlling o f all claims in order for the trial court to orde r a stay

.

¶ 64 2. An Analogy From I llinois Case Law ¶ 65 Dra

wing an analogy from our decision in Shaw v. Citiz ens State Bank of Shipman
, 185 I ll. App. 3d 79 (1989), we conclude that imposing a stay until resolution of Gra nt Thornton’s
appea l to the supreme c ourt was a rea sonable e x erc ise of the tria l court’s discr etion. ¶ 66 The fac ts in Shaw are not prec isely para llel to those befor e us, but the fac tual differ ence s

are insignifica

nt and have no tendenc y to l es s en the applicability of Shaw ’s rationale

. In Shaw
, the plaintiff filed two actions in the Macoupin County circ uit cou rt

. Id

. at 80. One action was ag ainst a bank, and the other action was ag ainst the bank and the owner of a g rain elevator. Id. In both case s, which the circ uit court consolidated, the g ist of the p l ai n t i ff’s complaint was the same. The plaintiff alleg ed that he and his fathe r, J ulius Shaw, had enter ed into a lease ag ree ment, in which J ulius Shaw ag ree d to lease him a far m. Id. Th e bank, howeve r, had lent money to J ulius Shaw, who, i n re t urn, had g rante d the bank a secur ity interest in all g rowing crops and stored g rain on his far m–the same far

m he subsequently
rente d to his son, the plaintiff. Id. After the plaintiff, pursuant to the lease ag ree ment, raised
crops on the far

m, harve sted them, and took the g rain to elevators, the bank made claims to the elevators that this corn–which the plaintiff, of co u rs e, considere d to be his corn–w as actua lly the bank’s corn under the terms of its secur ity ag ree ment with J ulius Shaw (who evidently had def aulted on his loan). Id. ¶ 67 The plaintiff’s pare nts, J ulius Shaw and Phy llis Shaw, then filed for “re lief under c hapter

-14-12 of the Ba nkruptcy Act (11 U.S.C. § 101 et seq. ),” but the bankruptc y court dismiss ed their peti t i on beca

use (1) the bankruptc y court found the lease betwee n the plaintiff and J ulius Shaw to be valid and enfor cea ble; (2) g iven th at l ea s e, the Shaws could not have been
eng ag ed in a far

ming operation when they filed their bankruptc y petition; and (3) g iven that they wer e not enga g ed in a farming operation at t he ti me of filing, they wer e ineligible for relief under chapte r 12. Id. See 11 U.S.C. § 109(f) (2006) (“O nly a family far mer or family fisherma n with re gu l ar an n u al income may be a debtor under chapte r 12 of this title [(11 U.S.C. §§ 1201 to 1231 (2006)) ].”); 11 U.S.C. § 101(18)( A) (2006) (to be a “fa mily far mer,” the individual must be “eng ag ed in a far ming o p er ation”); Otoe County National Bank v. Easton
, 883 F.2d 630, 634 (8th Cir. 1989) (“[W] e reje ct the proposition *** that the renting
out of land sim

p l i cit er constitutes ‘fa

rming ,’ and hence by statutory definition, a ‘fa rming
operation.’ ”). The bank, a party to the bank ru p t cy case , was concer ned by the bankruptcy court’s finding that the plaintiff and J ulius Shaw had a valid lease ; t h e bank reg arde d that finding as a threat to its asser ted secur ity interest in the g rain. There fore
, the bank appea led the dismissal of the bankruptc y petition. Shaw , 185 I ll. App. 3d at 80. ¶ 68 The plainti ff, howe ver, pr esente d the circ uit court with the bankruptcy court’s finding, pleading resjudicata

. Id. at 81. The bank responde d by filing in circ uit court a motion to stay the consolidated case s u ntil the fede ral appellate court issued its decision. Id. The bank
argued that “the exis tence and validity of [t he] plaintiff’s lease with his fathe r [was] a major fac tual issue in the combined case s, beca use, for [t he] pla intiff to pr evail, he [had to] show that the lease for a cash rent [was] valid, thus preve nting cre ditors of his pare nts from having a li en upon the gra in g rown upon the l and.” Id. The fe dera l appellate c ourt might set aside the bankruptcy court’s finding that the pl aintiff and J ulius Shaw had a va l i d lease
, and the bank argued it would be unwise for the circ uit court to base its own decision on a finding that the pendingfede ral a

ppeal mig ht era se. Id. ¶ 69 T he circ uit court denied the bank’s motion for a stay

. The court relied on St a t e L i f e Insurance Co. v

. Board of E ducation
, 401 I ll. 252, 257 (1948), in which the supreme court said: “ ‘The rule has been settled that wher e a judgme nt i n o n e ca s e h as successfully been made the basis for the judgme nt in a second case , the second judgme nt will s t an d as res judicata
, althoug h the first judgme nt be subsequently reve rsed.’ ” Shaw
, 185 I ll. App. 3d at 81 (quoting State Life
, 401 I l l

. at 2 5 7 ). Evidently
, the court rea soned that beca use the law would g ive ef

fec t to such conflicting judgme nts, a st ay should not be used to preve nt such
contra dictions from cominginto ex istence in the f irst place. ¶ 70 We disag ree d, relying on our decision in W

iseman v. Law Rese arch, Inc.
, 133 I ll. App. 2d 790 (1971). We said:
“This court rec og nized in W iseman
, citing State Life
, that a judgme nt of a trial court could be res judica t a ev en wh ere that judgme nt was being appea led. This court also

rec og nized, howeve r, the unfortunate result which could occur wher e a judgme nt being
appea led in one case is used as a basis for a second case befor e the appea l is final. I f the first decision is subsequently reve rsed, the second decisi o n , though then err oneous,

wo u ld be require d to stand, and there would be no avenue of relief

. To avoid th at situation, the W

iseman court deter

mined that the final decision in the second case should b e delayed unti l the decision on appea l had been rendere d. The court added the ca v ea t

-15-that the circ uit court co u l d deter mine at a subsequent date whether the appea l was proce eding at a rea sonable pace , and if it wer e not, the stay order could be set aside and the proce eding s could continue in their ordinary course .” Shaw
, 185 I ll. App. 3d at 81-82. ¶ 71 In other words, unseemly contra dictions betwee n judgme nts could arise in the following

manner

. Whil e a circ uit court has a case pending befor e it, another tribunal, in a separ ate case betwee n the s ame pa

rties, makes a

finding rele vant to the case before the circ uit court–but

a party to that case befor e the other tribunal appea ls. Whil e the appea l from the judgme nt of that other tribunal is still pending
, the circ uit court makes a decision in the case befor e it on the basis o f t h e t ri b u nal’s finding

. The time runs out for appea ling the circ uit court’s judgme nt, ma

k in g th a t ju d gme nt res

judicata

. Then a revie wing court overturns the tribunal’s finding–the fi n d i n g o n which the circ uit court unfortunate ly had relied in rea ching the judgme nt th at has become res judicata

. Our point in Shaw was that such a fiasco was possible under the law, but it did not have to be inevitable: the circ uit court could have, and should ha ve, stayed the proce eding s befor e it until the appea l f rom the tribunal’s judgme nt

was re solved. ¶ 72 The plainti ff in Shaw argued, howe ver, that, in his case s pending in the circuit court, a stay was unjustified bec ause the validity of the lea se wa s only one issue in those ca ses and resolving that issue favor ably to him woul d not yield a judgme nt; he still would have to prove othe r ele ments. Id. at 82. We responde d:
“We do not ag ree this is a sufficie nt distin ct i o n t o n egate application of the W iseman theory

. We rec og nize that an issue decide d in an other case may be so collater al to the

case wher e a court is re q u es t ed to g ive res judicata eff ect to that decision that no stay pending appea l of the ear lier case is war rante d. But here
, wher e the question in the other

ca s e is so signific ant, the unfairne ss of deny ing a party an opportunity to re fu t e a deter mination of another tribunal which may be deter min ed t o be wrong require s the application of the W

iseman prec edent.” Id. ¶ 73 We acknow ledg ed that, even if the ov er l apping issue wer e signific ant, a stay was not without its pitfalls. The pending appea l could have drag g ed on, making the leng th of the stay unfair a nd excessively

prejudicia l to the opposing pa rty

. Id. Or the appea l could have be en frivolous, a ploy

to keep res judicata at bay

. Id. Her e is how we addre ssed those conc erns: “The W ise man opinion rec og nizes that the period of the stay should not be

unrea sonably long, and if the appea l does not proce ed with rea sonable dispatch, the stay should be lifted. Howeve r, when the rec ord shows that the issue on appea l is signific ant

as here
, and no conclusive showing is made that the appea l is frivolous or a sham, W iseman require s the trial cour t to gr ant a stay

for a rea sonable time.” Id. at 82-83. ¶ 74 Thus, acc ording to Shaw
, in order for a stay to be justified, the overla p betwee n the ca se at hand and the pending appea l does not have to be complete such that resolution of the
appea l is potentially disposit ive; it is nece ssary only that the two proce eding s share a “sig nificant” issue, in contrast to an issue “ collater al” to the c ase a t hand. Id. at 82. Unless the appea l is clea

rly frivolous, the circ uit c ourt should stay its proce eding s for a rea sonable leng th of time, until the appea l resolves the share d signific ant issue. Id. at 82-83. I f it turns
out that the appea l is lasting too long, t h e court should lift the stay

. Id. at 82. See also

-16-Kensington’s W ine Auctionee rs & Brokers, Inc. v. John Hart Fine W ine, Ltd.
, 392 I ll. App. 3d 1, 17 (2009); In re Estate of Barth
, 339 I ll. App. 3d 651, 668 (2003); Illinois Founders InsuranceCo. v. Guidish , 248 I ll. App. 3d 116, 121 (1993). ¶ 75 I t is true that W iseman and its prog eny

– Shaw
, Illinois Founders
, Barth
, and Kensington’s W in e

– in v o lv ed separ ate actions wher eas Gra nt Thornton’s appea l to the supreme court is p a r t of, and a continuation of, the same action that is pending befor e the trial court. Neve rtheless, we do not see how this fac tual distinction weakens the r eleva nce of the W iseman doctrine. There is the same potential for contra dictory decisions, since, on rema nd, the trial court must follow our decision, which the supreme court might afte rwa rd reve rse. Our decision in Khan II is the law o f the case , binding on the trial court. See Kennedy v. First National Bank of Mattoon
, 259 I l l

. Ap p

. 3d 560, 563 (1994). But, as a prac tical matter, Gra nt Thornton’s
appea l to the supreme c ourt makes our decision in Khan II

tentative. ¶ 76 In its appea l to the supreme c o u r t, Gra nt Thornton makes g ood-fa ith arguments deser ving of serious consideration; no “co n cl usive showing ” has been made that Gra nt Thornton’s
appea l is “fr ivolous or a sham.” Shaw
, 185 I ll. App. 3d at 82. The supreme court might agree with Gra nt Thornton and disag ree with us, reve rsing our judgme nt in Khan II

. I f, befor e that possible outcome, the trial court and the parties make decisions based on our (later reve rsed) decision in Khan II

, “unfor tunate” inconsistencies could arise. Id. at 81. Ex pensive discovery could be conducte d on claims, or portions of claims, that the supreme court ultimately holds
to be ti me-ba rr ed. Pleading s, motions, and memoranda could be drafted, filed, and arg ued only for the court and the parties to later find out that these costly and time-consuming eff orts

are based on incorre ct leg al premises. Plaintiffs could even win a money judgme nt premised

on our holdings in Khan II
, and, afte r the time for appe al h as ru n o u t , the supreme court could reje ct some or all of those holdings. Under standably
, the trial court did not want to step onto a rugthat could be jer ked out from unde r its fee t. ¶ 77 To be sure, as pl aintiffs poi nt out i n their brief, they still might have vi able theories of

rec overy ag ainst BD O even if the supreme court ag ree s with al l of Gra nt Thornton’s
arguments. In its brief to the supreme court in Khan v. Grant Thor n ton LLP
, No. 112223, Gra nt Thornton argues, for example, that for purposes of the two-y ear statute of limit ations in section 13-214.2(a ) (735 I L CS 5/13-214.2(a) (West 2008)), plaintiffs ’ ca use of action
ag ainst Gra

nt T h o rn t o n acc rued at the same time it acc rued ag ainst other coconspirators: when the Khans paid the transac tion fee s in 2000 or 2001. Even if the supreme court ag ree s with that argument, plaintiffs might still have the argument that BD O committed fre sh torts, and fra udulently conce aled their cause s of action, by subsequently misleading them in the I RS audit i n 2003. ¶ 78 So, like the trial court, we ag ree it is unclea r that a supreme co u rt d ec i s i o n en t i rely favo ra b l e to Gra

nt Thornton would dispose of all of plaintiffs’ claims ag ainst the BD O defe ndants. But the test is whether the supreme court’s decision would be signific ant to the litigation ag ainst the BD O defe ndants, not whether it would be completely dispositi ve of the litigation (see Shaw
, 185 I ll. App. 3d at 82; Mediterrane an , 7 0 8 F. 2 d at 1465), and since Gra nt Thornton is asking the supreme court to interpre t the statute of limit ations and statute of repose perta ining to acc ountants (735 I L CS 5/13-214.2(a), (b) (West 2008)) and to elucidate when a cause of action for bad tax advice acc rues, one might rea sonably expect that

-17-the supreme court’s decision will have considera ble signific ance for plainti f f s ’ c la im s a g a in st

an other acc ounting firm, BD O. For example, plaintiffs might or might not have t o p ro v e fra udulent conce alment by BD O, depending on the s u preme court’s decision in Gra nt Thornton’s appea l. Also, the BD O defe ndants cannot intelligently conduct their defe nse, or know how to respond to discovery reque sts, until they rec eive final and definitive g uidance

o n (1) when a cause of action for bad tax advice acc rues and (2) what is the corr ect interpre tation of the statute of repose in section 13-213.2(b) (735 I L CS 5/13-214.2(b) (West 2008)). These are questions that the supre m e co u rt is anticipated to addre ss in Gra nt Thornton’s and Deutsche Ba nk’s consolidated ap p ea l s

. T h e trial court did not abuse its discretion by stay

ing the litigation ag ainst th e BD O defe ndants until the supreme court

answe rs these que stions.

¶ 79 C. St aying the Cases Until the Claim of Br eac h of Contrac t I s Arbitrate d ¶ 80 The trial co u rt s t ay ed the proce eding s not only for the duration of Gra nt Thornton’s
appea l to the s upreme court but also for the duration of the arbitration of plaintiffs’ cla ims of brea ch of con t ra ct

. P laintiffs contend that imposing a stay until the conclusion of the arbitration was an a

buse of discr etion and seve rely prejudicia l to them. ¶ 81 Section 2(d) of the Uniform Arbitra t i o n Act (710 I L CS 5/2(d) (West 2010)) pr ovides: “Any action or proce eding involving an issue subject to arbitration shall be stay ed if an order for arbitration or an application there for has been made under this Section or, if the issue is

s ev er able, the stay may be with respe ct there to only .” The first part of section 2(d) is expressed in mandatory languag e: if the proce eding involves an issue subject to arbitration, the whole proce eding “shall be stay ed

. ” Bu t then the statute provides an alternative, introduced by the conjunction “or” : if the issue subject to arbitration is “seve rable ” from the other issues in the proce eding
, the stay “may” apply to that issue alone. In eff ect, section 2(d)
g ives the trial court a choice if an is sue is within the arbitration ag ree ment but the other issues are outside the arb i tration ag ree ment: the court may stay the entire proce eding
, or, alternatively
, the court may stay the proce eding only with respe ct to the sever able issue that is subject to arbitration. Kelso-Burnett Co. v. Zeus Dev elopment Corp.
, 107 I ll. App. 3d 34, 41 (1982). ¶ 82 Kee ping in mind that our standard of revie w–abuse of discretion–is the most defer ential standard of revie w rec og nized by law ( In re D.T.
, 212 I ll. 2d 347, 356 (2004))
, we do not see how it was “within the bounds of rea son” to stay the proce eding s until the claims of brea ch of contra ct (wha

tever was left of those claims) wer e arbitrated ( People v. Ortega
, 209 I ll. 2d 354, 360 (2004))

. For the rea sons we have explained, we understand and u p h o l d the trial court’s decision to stay the proce eding s until the supreme co u rt decide s Gra nt Thornton’s
appea l, but beca

use our interpre tation of the arbitration ag ree ment, in Khan I
, has thoroug hly hollowed out the claims of brea ch of contra ct, we do not see the logic or u s ef u l ness of

awa iting the conclusion of the arbitration as we ll. I t is unclea r t o us that any

thing is left t o arbitrate, g iven the conduc t that the complaints desig nate a s brea ches of contra ct. ¶ 83 There are two ca s es i n t h e t ri al co u rt and there fore two complaints, eac h of which contains a count entitled “B rea ch of Contract”: count IX in Champaig n County case No. 90-

-18-L -139 and count X in Champaig n County case No. 09-L -140. Both of t h o s e counts asser t, in identical languag e, that the BD O defe ndants brea ched their contra ct with plaintiffs in the following way s: “The se Def

endants brea ched their obligations under the oral and/or written contra cts with the Plaintiffs, which caus ed d amage s to the Plaintiffs. For instance, Def endants marke ted and sold the illega l and abusive tax shelters to Plaintiffs. The Def endants then implemented these illega l and abusive tax shelters for Plaintiffs. T h e Di stressed Debt Strateg ies wer e not leg al tax-advantag ed investment strateg ies as Def endants promised Plaintiffs the y would rec eive and which Plaintiffs barg ained for. Certain of Def endants assisted in the prepa

ration of Plaintiff

s’ tax returns, signe d Plaintiffs’ tax returns and advised the Plaintiffs to sign and file the tax returns using the losses g ener ated by these illega l and abusive tax shelters.” ¶ 84 In the para g raph quoted above, plaintiffs ref er to “ora l and/or written contra cts,” but the consulting a g ree ment contains a me rg er c lause, providingas follows:
“ ‘This Ag ree ment sets forth the entire ag ree ment betwee n the parties with respe ct to the subject matter he rein, suspending all prior ag ree ments, neg otiations or understanding s, whether oral or written, with respe ct to such subject matter. This Agree ment may not be amende d or modified except in writing signe d by duly authorized repr esenta tives of the Client and BDO .’ ” Khan I , 404 I ll. App. 3d at 898. ¶ 85 The “ ‘subject mat t er ’ ” o f t h e consulting ag ree ment includes “ ‘investment advice or service s’ ” and “ ‘leg al and/or tax opinions reg arding any strateg ies that may b e implemented.’ ” Id. at 897. These are as of endea vor are “ ‘subject matter’ ” of the consulting
ag ree ment in that BD O specific ally disclaims them as part of its contra ctual perf ormanc e. Id.
at 898. Be cause the consulting ag re e me nt disclaims these service s as part of BD O’s promised
contra ctual perf

ormanc e, these service s are outside the scope of the arbitration clause
, which

cover s only “ ‘any dispute, controve rsy or claim aris[ing] in connec tion with the perf ormanc e

or brea ch of this ag ree ment’ ” ( id. at 913). Id. at 918, 919. Giv en the merg er clause
, it is difficult to see how plaintiffs could have some other, oral contra ct with the BD O defe ndants
reg arding investment advice or tax advice

. Acc ording to the merg er clause
, any subsequent
ag ree ment reg arding this subject matter would hav e t o b e in a writing signe d by the
contra cting parties, a

nd we a re a war e of no suc h writing

. ¶ 86 So, insomuch as plaintiffs seek to rec over from the BD O defe ndants for bad investment advice
, they evidently will have to do so on some theory other than brea ch of contra ct, since the written contra ct say s that investment advice and investment service s will not be part of BD O’s promised perf

ormanc e. That is why bad investment advice is outside the scope of the arbitration clause. ¶ 87 L ikewise, insomuch as plaintiffs seek to rec over from BD O fo r b ad t ax advice
, it is unclea r how t h ey could do so under a theory of brea ch of contra ct, considering that tax advice is another service that t he written contra ct specific ally disclaims. The contra cting parties not only exclude tax advice from being part of BD O’s p ro m i s ed perf ormanc e, but they ag ree that insomuch as BD O g ives tax advice
, such advice is a tentative sug g estion that plai ntiffs are oblige d to validate by consulting a lawy er. I t would seem that the only way

-19-plaintiffs could rec over from the BD O defe ndants for bad tax advice would be on som e

theory of tort based on BD O’s cond u ct i n s t eering plaintiffs to lawy ers having prior
ag ree ments with BDO to issue bogus leg al opinions. Id. at 919. ¶ 88 In sum, g iv en o u r an al y s i s in Khan I
, bad investment advice and bad tax advice are

ex cl u d ed from the brea ch-of -contra ct claim, beca

use, as the parties stipulated in their integ rate d ag ree ment, which could be modi fied only in writing
, investment advice and tax advice wer e not part of BD O’s agree d-on perf ormanc e. Those theories, which are the meat of plaintiffs’ case –if not the hide, hair, bones, and nails, too–are rele g ated to the rea lm of tort

or some rea lm other than contra ct, as the trial court seeme d to r ecognize whe n it r efuse d to allow plaint i ff

s to prese nt their tort claims as contra ct claims for purposes of statutes of limit ations. ¶ 89 What is left, then, of the claims of brea ch of contra ct? Or, to ask the question differ ently
, what is left to arbitrate? We do not know. In Khan I
, we intended to proce ed cautiously ; we left the d o o r o p en i n case the parties could think of some alleg ed brea ch of contra ct to

arb i trate (plaintiffs say “[f]or instance” when listi ng the brea ches of contra ct in their complaints). I f indeed any thing is left under the heading of brea ch of contra ct, it would seem

re l at ively insignifica

nt and “collatera l” t o the central allega tions of bad investment adv i ce and bad tax advice

. See Shaw
, 185 I ll. App. 3d at 82. There fore
, while we find that the trial
court was well within its discretion to stay the proce eding s until the supreme court decide d Gra nt Thornton’s appea l, we conclude the court abused its discretio n b y staying the
proce eding s ag ainst the BD O defe ndants until the brea ch-of -contra ct claims wer e arbitra ted,
g iven that those cla ims are c ollatera l at best.

¶ 90 I I I . CONCL USI ON ¶ 91 Fo r t h e fo re go i n g rea sons, we aff irm the stay as modified so as to last only fo r t h e duration of Gra

nt Thornton’s appea l to the supreme court, not for the du ra t i o n of the arbitration.

¶ 92 Affir

med as modified.

-20-