Opinion ID: 784819
Heading Depth: 2
Heading Rank: 1

Heading: mungo's proof of damages

Text: 21 In order to recover damages for a legal malpractice action in Illinois, a plaintiff must establish what the result would have been in the underlying action where the plaintiff's former attorney committed the alleged malpractice. See Eastman v. Messner, 188 Ill.2d 404, 411, 242 Ill.Dec. 623, 721 N.E.2d 1154, 1158 (Ill. 1999). A plaintiff need not prove to a certainty that she would have prevailed absent legal malpractice, but she must show that a victory of some sort was more likely than not in the underlying action. See Praxair, Inc. v. Hinshaw & Culbertson, 235 F.3d 1028, 1032 (7th Cir.2000); Jones Motor Co. v. Holtkamp, Liese, Beckemeier & Childress, P.C., 197 F.3d 1190, 1193 (7th Cir.1999). In this case, the underlying action was a divorce action, and the measure of damages for Mungo's legal malpractice claim is the difference between her recovery under the settlement agreement and what she would have recovered in the divorce action but for Taylor's legal malpractice. 22 Mungo attacks Judge Wedoff's analysis of the value of her underlying divorce action, arguing that he undervalued the marital estate. In a divorce action, the issues of damages and the valuation of the marital estate are factual questions to be resolved by the trier of fact. In re Marriage of Lee, 246 Ill. App.3d 628, 636, 186 Ill.Dec. 257, 615 N.E.2d 1314, 1321 (1993). Under the clearly erroneous standard, if the bankruptcy court's factual findings are plausible in light of the record viewed in its entirety, a reviewing court may not reverse even if it would have weighed the evidence differently. Matter of Love, 957 F.2d 1350, 1354 (7th Cir.1992). 23 Judge Wedoff began his damages analysis by calculating the value of the marital assets and determining the value of Mungo's dissipation claim. Based on the record evidence, Judge Wedoff determined that the value of the estate was $301,075.73, including the value of the dissipation claim and the value of the marital assets. Judge Wedoff determined that Mungo would have received 60% of the marital property, or $180,645.43, had the case gone to trial. Judge Wedoff then determined that the settlement agreement was worth $173,305.00, and he awarded the difference, or $7,340.43 as damages. 24 Mungo raises a host of challenges to Judge Wedoff's valuation of the marital estate. Specifically, she claims Judge Wedoff erred by: (1) determining that the value of the marital estate was just $301,075.73 rather than $2,130,530.30 because he ignored evidence for many of the assets in the marital estate and improperly valued others; (2) applying the wrong legal standard to her dissipation claim and improperly valuing that claim; (3) excluding gifts to the children from their grandfather when calculating the value of the marital estate; and (4) holding that Taylor was barred by the doctrine of equitable estoppel from claiming a value of the marital estate less than the value Taylor claimed in the underlying divorce action in state court. 25 First, Mungo argues that Judge Wedoff ignored evidence for many of the assets in the marital estate. Mungo's principal evidence for these other assets was based on a pretrial statement and a settlement proposal from the underlying divorce proceeding that reflected what Mungo expected the evidence would show at trial. As Judge Wedoff correctly noted, however, the pretrial statement was not evidence but rather simply a statement of position by a party as to what the evidence might show. ( See R. 1-1, Record, Vol. VIII, October 5, 2001 Ruling at p. 8.) Likewise, the settlement proposal was not evidence of the value of the estate but rather a reflection of one litigant's views on that issue. 1 Mungo also argues that a summary exhibit, Exhibit 61, ( see id., Record, Vol. XIV, Exhibit 61), she prepared for trial supports her calculation of the value of the marital estate. As Judge Wedoff noted, however, Mungo failed to introduce any of the underlying evidence supposedly supporting this summary exhibit. ( See id., Record, Vol. I, Mar. 22, 2002 Mem. of Decision at p. 7.) Because Judge Wedoff's decision to reject the pretrial statement, the summary exhibit and Mungo's testimony was not clearly erroneous, Mungo's objection to the bankruptcy court's calculation of the value of the marital estate fails. 26 Mungo also challenges various specific valuations of particular portions of the marriage estate calculated by Judge Wedoff, including the value of stock in CLP Group, Inc. and the value of the marital home. Regarding the value of the stock, the relevant time for the valuation of stock is as close as practicable to the date of the trial. See 750 ILCS 5/503(f). Mungo argues for a stock valuation of $160,000 prepared by an accounting firm rather than a subsequent valuation prepared by the same accounting firm of just $40,000. Given the evidence that the stock declined in value because of the generally unprofitable nature of the company operations, Judge Wedoff's decision to base his damages calculation on the subsequent $40,000 valuation was not clearly erroneous. 2 Likewise, regarding the value of the marital estate, Judge Wedoff's use of an appraisal offered into evidence by Taylor to value Mungo's marital home, rather than Mungo's testimony, which he deemed not credible, was not clearly erroneous. 27 Second, Mungo claims that Judge Wedoff improperly valued her dissipation claim during the period that her marriage was irretrievably broken. Under Illinois law, dissipation is the use of marital property for the sole benefit of one of the spouses for a purpose unrelated to the marriage at the time that the marriage is undergoing an irreconcilable breakdown. In re Marriage of Cerven, 317 Ill.App.3d 895, 900, 252 Ill.Dec. 93, 742 N.E.2d 343, 348 (2000). Mungo claims that Judge Wedoff applied the wrong standard because he measured the dissipation claim from late in August 1997 when he determined that the marriage suffered irreconcilable breakdown. ( See R. 1-1, Record, Vol. VIII, October 5, 2001 Ruling at p. 8, 252 Ill.Dec. 93, 742 N.E.2d 343.) Mungo suggests that her marriage (like all others) undergo[es] irreconcilable breakdown before it actually suffers such an irreconcilable breakdown. Thus, Mungo argues that Judge Wedoff should have measured her dissipation claim from 1995 when her marriage started to undergo an irreconcilable breakdown rather than late August 1997 when the breakdown was essentially complete. 28 Even assuming that Judge Wedoff applied the wrong legal standard to her dissipation claim, however, Mungo's evidence supporting the 1995 date is, as he noted, very limited. Moreover, Mungo's assertions of the onset of irreconcilable breakdown during the period between 1995 and 1997 are belied by her admission that when she and her former husband separated in 1997 it was intended to be for just a little while, suggesting that the couple hoped to reconcile. Indeed, Mungo testified that she and her former husband attempted to reconcile as late as March of 1998. Given these admissions, Judge Wedoff's decision to measure the dissipation from 1997 was not clearly erroneous — regardless whether he applied the wrong legal standard. It was, at most, harmless error. 29 Even if Judge Wedoff was correct to date the dissipation claim from 1997, Mungo argues that the bankruptcy court improperly valued that claim by omitting the swimming pool from this calculation. As Taylor points out, however, there is no evidence that the pool was constructed using marital funds, which is an essential element of a dissipation claim. Moreover, Judge Wedoff found that the pool was not unrelated to the marriage — another element of a dissipation claim. ( See R. 1-1, Record, Vol. I, Mar. 22, 2002 Mem. of Decision at p. 10, 252 Ill.Dec. 93, 742 N.E.2d 343.) Finally, the bankruptcy court noted that the pool was itself subsumed into the valuation of the marital estate. ( Id. ) Thus, Judge Wedoff's specific calculation of the value of the dissipation claim was not clearly erroneous. 30 Third, Mungo argues that Judge Wedoff improperly excluded gifts to her children from their grandfather when calculating the value of the marital estate. Under Illinois law, funds in the marital estate are presumed to be marital property unless that presumption is rebutted by proof of a gift. In re Lee, 246 Ill.App.3d 628, 639, 186 Ill.Dec. 257, 615 N.E.2d 1314, 1323 (1993); 750 ILCS 5/503(b)(1). Property acquired by gift is not considered marital property, and the court may set it aside in a separate trust or fund for the benefit of children. 31 The parties stipulate that in May and July 1997 Mungo's former husband transferred a total of $146,248.80 from the marital estate to trust accounts for their three children. The parties did not stipulate that these were marital funds but simply that the funds came from the marital account. Significantly, however, Taylor testified that the source of the funds was a gift from Mr. Mungo's grandfather. Thus, Judge Wedoff's conclusion that these funds were not part of the marital estate was not clearly erroneous. Moreover, regardless of the source of the funds, the transfer to the trust accounts occurred in May and July of 1997 — before the beginning of Mungo's dissipation claim. 32 Fourth, Mungo argues that Judge Wedoff erred as matter of law because he refused to find that Taylor was barred by the doctrine of collateral estoppel from arguing that the marital estate was less than the value she claimed in the pretrial statement she submitted in connection with the underlying state court divorce action. Mungo argues that Taylor filed the pretrial statement containing an assertion concerning the value of the marital estate and that Mungo relied upon the representation. As Taylor points out, however, Mungo did not supply any evidence that she relied to her detriment on Taylor's representations, which is an essential element of any collateral estoppel argument. See, e.g., Quake Const., Inc. v. American Airlines, Inc., 141 Ill.2d 281, 310, 152 Ill.Dec. 308, 565 N.E.2d 990, 1005 (Ill.1990). Mungo might have a collateral estoppel claim if, for example, she rejected a settlement offer in reliance on Taylor's statements before recovering an award or agreeing to a settlement that was somehow less. Instead, Mungo apparently disregarded the valuation of the marital estate from the pre-trial order and accepted a lower settlement offer. 33 II. MUNGO'S ATTEMPT TO COMPEL DISCOVERY RELATING TO A GIFT OR EXPECTANCY PRIOR TO THE DIVORCE 34 Mungo claims that within ten days of entry of the divorce decree, her former husband was gifted 4,000 shares of stock in his family's business, which was valued in the millions of dollars. Under Illinois law, such a stock gift could conceivably be considered part of the marital estate. See 750 ILCS 5/503(d) (one of the factors when assessing the value of the marital property includes the reasonable opportunity of each spouse for future acquisition of capital assets and income); see also In re Marriage of Henke, 313 Ill.App.3d 159, 176, 245 Ill.Dec. 780, 728 N.E.2d 1137, 1150 (2000). 35 In order to assess whether the stock gift might be considered part of the marital estate, Mungo sought to depose her former husband's siblings in order to determine when the gift was made and when her former husband learned that he was to receive it. The siblings objected to their depositions and suggested that Mungo might obtain such information by serving subpoenas for stock records or by deposing Mungo or their father. Judge Wedoff apparently agreed, because he denied the motion to compel. Mungo contends that his denial was erroneous. 36 Significantly, although Judge Wedoff rebuffed Mungo's attempt to depose her former husband's siblings, Mungo had the opportunity to explore the issue of the stock gift at trial. Indeed, Mungo called her former husband at trial but apparently failed to ask him any questions concerning the timing of the stock gift or when he learned about it. Thus, regardless whether Judge Wedoff's refusal to order the depositions of the siblings was erroneous, that error was harmless because Mungo was not foreclosed from obtaining access to equivalent information through other discovery means. She simply chose not do so. 3 37