Court Opinion

ID: 2679577
Source: CourtListenerOpinion
Date Created: 2014-06-19 15:03:27.12286+00
Date Added: 2024-06-11T15:22:29.366630
License: Public Domain

2014 IL 115997

                                 IN THE
                            SUPREME COURT
                                   OF
                          THE STATE OF ILLINOIS

                           (Docket Nos. 115997, 116009 cons.)

      In re ESTATE OF PERRY C. POWELL (a/k/a Perry Smith, Jr.), a Disabled Person
             (Robert F. Harris, Cook County Public Guardian, Appellee, v. John C.
                             Wunsch, P.C., et al., Appellants).

                               Opinion filed June 19, 2014.

        JUSTICE FREEMAN delivered the judgment of the court, with opinion.

        Chief Justice Garman and Justices Thomas, Kilbride, Karmeier, Burke, and Theis
     concurred in the judgment and opinion.

                                        OPINION

¶1       At issue in this appeal is the scope of an attorney’s duty in an action brought
     pursuant to the Wrongful Death Act (740 ILCS 180/0.01 et seq. (West 2012)). Plaintiff,
     the estate of Perry C. Powell, filed claims for legal malpractice against several
     attorneys and their law firms as a result of the attorneys’ conduct in handling a
     wrongful death action in which Powell was a beneficiary. The circuit court of Cook
     County dismissed the legal malpractice counts of plaintiff’s complaint, finding that
     defendants did not owe Powell a duty. The appellate court reversed in part and
     remanded for further proceedings, finding inter alia that defendants owed Powell a
     duty. 2013 IL App (1st) 121854. This court allowed defendants’ petitions for leave to
     appeal. Ill. S. Ct. R. 315 (eff. July 1, 2013). We now affirm the judgment of the
     appellate court.
¶2                                       I. BACKGROUND

¶3       According to plaintiff’s complaint, as finally amended, Powell was adjudicated a
     disabled adult due to severe mental disabilities in 1997. Powell’s parents, Perry and
     Leona Smith, were appointed to serve as co-guardians of Powell’s person, but they
     were not appointed to serve as guardians of his estate. In 1999, Perry died from
     complications after a surgical procedure. He was survived by his wife Leona and two
     children, Emma and Powell. Soon thereafter, Leona entered into an attorney-client
     agreement with defendant law firm John C. Wunsch, P.C., to bring a cause of action
     against the doctors and hospital that treated Perry. Leona was appointed special
     administratrix of Perry’s estate and in 2001, Wunsch filed a complaint pursuant to the
     Wrongful Death Act (740 ILCS 180/2 (West 2012)) (Act) on behalf of Leona
     individually and as special administratrix of the Estate of Perry Smith.1 Perry died
     intestate and his estate’s only asset was the wrongful death action.

¶4       Two settlements were ultimately reached in 2005. The first settlement, after
     attorney fees and costs, amounted to $15,000, which was distributed equally between
     Leona, Emma and Powell, each of them receiving $5,000. The settlement order
     provided that Powell’s share of the settlement was to be paid to Leona on Powell’s
     behalf. Leona placed both her and Powell’s share of the settlement into a joint account.
     The probate court was not notified that Powell was to receive the settlement or that
     Leona had accepted the settlement on his behalf.

¶5       Prior to the second settlement, Wunsch referred the action to Jill Webb, an attorney
     at Phillips Law Offices. Leona executed an attorney-client agreement with Phillips
     Law Offices and John C. Wunsch, P.C. to continue litigating the action. As a result of
     the second settlement, Leona and Powell each received about $118,000. Emma waived
     her right to receive any monies from the second settlement. A check made payable to
     both Leona and Powell was given to Leona and she placed both her and Powell’s share
     of the settlement into a joint account. The settlement order did not provide that the
     amount distributable to Powell was to be administered and distributed under the
     supervision of the probate court and Powell did not have a guardian of his estate
     appointed to receive his share. Wunsch purportedly advised Leona and Emma that it
     was “too much trouble” to go through the probate court to distribute the settlement

         1
          Defendant attorneys John C. Wunsch and Jeremy Dershow litigated the action. The complaint also
     included a claim under the Survival Act (755 ILCS 5/27-6 (West 2012)) and the Rights of Married
     Persons Act, commonly referred to as the Family Expense Act (750 ILCS 65/15 (West 2012)). For
     convenience, we refer to the action as a wrongful death action.
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     funds for Powell because every time Leona needed money for Powell, she would have
     to ask the probate court to release funds for her.

¶6       Sometime in 2008, Emma became concerned about Powell’s hygiene and
     well-being after visiting him at Leona’s home. She petitioned the probate court to
     remove Leona as guardian of Powell’s person. The probate court granted the petition
     and appointed Emma as plenary guardian of Powell’s person. The probate court also
     appointed the public guardian as plenary guardian of Powell’s estate. The assets in the
     joint account were frozen and it was subsequently discovered that Leona had
     withdrawn all but approximately $26,000 from the account. No accounting of the
     expenditures was ever provided by Leona.

¶7       The public guardian filed this action against defendants. The complaint alleged: in
     count I, professional negligence regarding the first settlement, against John C. Wunsch,
     P.C., John C. Wunsch, and Jeremy L. Dershow (Wunsch defendants); in count II,
     professional negligence regarding the second settlement, against Phillips Law Offices,
     Ltd., Jill M. Webb (Phillips defendants), John C. Wunsch, P.C., and John C. Wunsch;
     in count III, fraud against Leona; in count IV, breach of fiduciary duty against Leona;
     and, in count V, unjust enrichment against Leona.

¶8       The Wunsch and Phillips defendants filed motions to dismiss the counts against
     them pursuant to section 2-615 of the Code of Civil Procedure (735 ILCS 5/2-615
     (West 2012)). Both motions alleged that plaintiff’s complaint failed to state a cause of
     action for legal malpractice. The circuit court granted the motions, finding that the
     complaint failed to sufficiently allege defendants owed Powell a duty and also failed to
     allege proximate cause.

¶9       The appellate court reversed in part, finding that the complaint sufficiently alleged
     defendants owed Powell a duty as an intended beneficiary. The court determined that
     an attorney retained by a special administrator of an estate to bring a wrongful death
     action for the benefit of the surviving spouse and next of kin owed a fiduciary duty to
     those beneficiaries. 2013 IL App (1st) 121854, ¶ 20. It reasoned that since section 2 of
     the Act specifically provides that the amount recovered in a wrongful death action shall
     be for “the exclusive benefit of the surviving spouse and next of kin” of the deceased
     person, the legislative intent of the Act is that the claims brought in such an action are
     those of the individual beneficiaries. Id. ¶ 18. The court further noted that, despite the
     absence of a direct attorney-client relationship, its determination was supported by the
     decisions in DeLuna v. Burciaga, 223 Ill. 2d 49 (2006), and Carter v. SSC Odin

                                             -3-
       Operating Co., 2012 IL 113204. Regarding proximate cause, the court found that count
       I, which concerned the first settlement, did not sufficiently allege proximate cause
       since section 2.1 of the Act only requires the probate court’s supervision for settlement
       amounts in excess of $5,000. 2013 IL App (1st) 121854, ¶ 29. Thus, the court
       concluded that count I was properly dismissed. However, the court found that count II,
       which concerned the second settlement that was in excess of $5,000, did sufficiently
       allege proximate cause in that the probate court’s supervision was required to
       administer and distribute the settlement proceeds allocated to Powell in accordance
       with section 2.1 of the Act. Id. ¶ 30. The court concluded that the circuit court had erred
       in dismissing count II and remanded the cause to the circuit court for further
       proceedings. Defendants now appeal to this court.

¶ 10                                      II. ANALYSIS

¶ 11       In this appeal, we determine whether an attorney who brings a wrongful death
       action owes a legal duty to the decedent’s beneficiaries at the distribution of funds
       phase of the action. Defendants contend that the attorney only owes a duty to the named
       personal representative of the estate and not the beneficiaries of such an action. They
       argue that plaintiff’s complaint was properly dismissed because plaintiff cannot
       establish the duty element in his legal malpractice claim. The Wunsch defendants
       further argue that plaintiff’s complaint failed to sufficiently allege proximate cause.
       Plaintiff maintains that we should uphold the appellate court’s determination that an
       attorney owes a duty to the decedent’s beneficiaries and that his complaint sufficiently
       alleged the elements of duty and proximate cause.

¶ 12       As noted above, the circuit court granted defendants’ section 2-615 motions to
       dismiss and dismissed plaintiff’s complaint with prejudice. A motion to dismiss
       brought pursuant to section 2-615 of the Code attacks the legal sufficiency of the
       complaint. Vitro v. Mihelcic, 209 Ill. 2d 76, 81 (2004). When ruling on such a motion,
       the court must accept as true all well-pleaded facts in the complaint, as well as any
       reasonable inferences that may arise from them. Doe v. Chicago Board of Education,
       213 Ill. 2d 19, 28 (2004). However, a court cannot accept as true mere conclusions
       unsupported by specific facts. Pooh-Bah Enterprises, Inc. v. County of Cook, 232 Ill.
2d 463, 473 (2009). A complaint should be dismissed under section 2-615 only if it is
       clearly apparent from the pleadings that no set of facts can be proven that would entitle
       the plaintiff to recover. Bajwa v. Metropolitan Life Insurance Co., 208 Ill. 2d 414, 421

                                                -4-
       (2004). The critical inquiry is whether the allegations of the complaint, when construed
       in the light most favorable to the plaintiff, are sufficient to establish a cause of action on
       which relief may be granted. Sheffler v. Commonwealth Edison Co., 2011 IL 110166,
       ¶ 61. Our review of an order granting a section 2-615 motion to dismiss is de novo.
       Solaia Technology, LLC v. Specialty Publishing Co., 221 Ill. 2d 558, 579 (2006).

¶ 13        To state a claim for legal malpractice, a plaintiff must plead and prove that the
       defendant attorneys owed the plaintiff a duty of due care arising from the
       attorney-client relationship, that the defendants breached that duty, and that as a
       proximate result, the plaintiff suffered injury. Northern Illinois Emergency Physicians
       v. Landau, Omahana & Kopka, Ltd., 216 Ill. 2d 294, 306 (2005). The injury in a legal
       malpractice action is neither a personal injury nor the attorney’s negligent act. Id.
       Rather, it is a pecuniary injury to an intangible property interest caused by the lawyer’s
       negligent act or omission. Id. For purposes of a legal malpractice action, the plaintiff is
       not considered to be injured unless he has suffered a loss for which he may seek
       monetary damages. Id. Even if the attorney’s negligence is established, no action will
       lie against the attorney unless that negligence proximately caused actual damage to the
       plaintiff. Id. at 306-07. Actual damages are never presumed in a legal malpractice
       action and the plaintiff must demonstrate that he has sustained a monetary loss as a
       result of the lawyer’s negligent act. Id. at 307. Damages are considered speculative
       only if their existence is uncertain, not if the amount is uncertain or yet to be fully
       determined. Id.

¶ 14       We first consider whether defendants owed Powell a duty. Whether a legal duty
       exists is a question of law to be determined by the court. Ward v. K mart Corp., 136 Ill.
2d 132, 140 (1990). Our starting point is the traditional, general rule that an attorney is
       liable only to his client, not to third persons. Pelham v. Griesheimer, 92 Ill. 2d 13, 19
       (1982). However, if a nonclient is an intended third-party beneficiary of the
       relationship between the client and the attorney, the attorney’s duty to the client may
       extend to the nonclient as well. Id. at 20-21. The key consideration is whether the
       attorney is acting at the direction of or on behalf of the client to benefit or influence a
       third party. Id. at 21. We concluded in Pelham that “for a nonclient to succeed in a
       negligence action against an attorney, he must prove that the primary purpose and
       intent of the attorney-client relationship itself was to benefit or influence the third
       party.” Id. This is referred to as the “intent to directly benefit” test. Id. at 23.

¶ 15       In Pelham, we concluded that an attorney, who was hired by a woman for the
       primary purpose of obtaining a divorce, did not owe a duty to her children who sued the
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       attorney for legal malpractice after their father removed them as beneficiaries from his
       insurance policy subsequent to the divorce. Id. We found that the children were, at best,
       only incidental beneficiaries of the attorney-client relationship between their mother
       and her attorney because naming the children as beneficiaries of their father’s
       insurance policy was not the primary reason their mother retained her attorney. Id.

¶ 16       With these principles in mind, we turn to the provisions of the Act, which govern
       our resolution of this case. The Act creates a cause of action for pecuniary losses
       suffered by the deceased’s spouse and next of kin by reason of the death of the injured
       person. 740 ILCS 180/1 et seq. (West 2012); see Carter, 2012 IL 113204, ¶ 33. Section
       2 of the Act provides that every wrongful death action shall be brought by and in the
       names of the personal representatives of the deceased, but the amount recovered in
       such action shall be for the “exclusive benefit of the surviving spouse and next of kin”
       of the deceased. 740 ILCS 180/2 (West 2012). We have characterized the role of a
       personal representative in a wrongful death action as “ ‘merely a nominal party to this
       action, effectively filing suit as a statutory trustee on behalf of the surviving spouse and
       next of kin, who are the true parties in interest.’ ” Carter, 2012 IL 113204, ¶ 33
       (quoting Glenn v. Johnson, 198 Ill. 2d 575, 583 (2002)).

¶ 17       Section 2 of the Act also governs the distribution of any recovery and provides that
       the amount recovered in such an action shall be distributed “to each of the surviving
       spouse and next of kin of such deceased person” according to their degree of
       dependency as determined by the court. 740 ILCS 180/2 (West 2012).

¶ 18       Section 2.1 of the Act concerns the distribution of any recovery and provides that
       “if proceeds in excess of $5,000 are distributable to a minor or person under legal
       disability, the court shall allow disbursements and fees to the special administrator and
       his or her attorney and the balance shall be administered and distributed under the
       supervision of the probate division of the court if the circuit court has a probate
       division.” 740 ILCS 180/2.1 (West 2012).

¶ 19       This court’s prior decisions in DeLuna and Carter are helpful to our determination
       of the scope of an attorney’s duty in a wrongful death action. In DeLuna, although
       primarily concerned with the application of the legal malpractice statute of repose, we
       determined that an attorney who was hired to bring a medical malpractice and wrongful
       death action owed plaintiffs, the decedent’s children, a fiduciary duty. DeLuna, 223 Ill.
2d at 79. We reasoned that since the wrongful death action was “indisputably brought
       for [the children’s] benefit,” the attorney owed the children a fiduciary duty. Id. The

                                                -6-
       issue in Carter concerned the enforceability of an arbitration agreement rather than the
       scope of an attorney’s duty. However, our opinion examined the provisions of the Act
       at great length. As previously stated, we recognized that the decedent’s spouse and next
       of kin are the true parties in interest in a wrongful death action, rather than the personal
       representative who is merely a nominal party. Carter, 2012 IL 113204, ¶ 33. Further,
       we noted that the legislature does not treat a wrongful death action like other assets of
       the deceased’s estate. Id. ¶ 38. Rather, amounts recovered in a wrongful death action
       are not subject to the provisions of the Probate Act of 1975 (755 ILCS 5/1-1 et seq.
       (West 2012)) but are distributed to the decedent’s surviving spouse and next of kin per
       their degree of dependency. Carter, 2012 IL 113204, ¶¶ 38-39.

¶ 20       Considering the language and purpose of the Act, as well as our decisions in
       Pelham, DeLuna and Carter, we hold that an attorney who brings a wrongful death
       action owes a legal duty to the decedent’s beneficiaries at the distribution of funds
       phase of the action. As set forth above, the Act creates a cause of action for pecuniary
       losses suffered by the deceased’s spouse and next of kin by reason of the decedent’s
       death. Yet, the decedent’s beneficiaries are precluded from pursuing individual actions
       since a wrongful death action must be brought by and in the name of the personal
       representative of the deceased. Nevertheless, the Act makes clear that any amount
       recovered in such an action shall be for the “exclusive benefit” of the surviving spouse
       and next of kin. Further, the Act provides for distribution among the beneficiaries
       pursuant to their degree of dependency rather than distributions subject to the
       provisions of the Probate Act. Clearly, the underlying purpose of a wrongful death
       action is to compensate those beneficiaries named in the action rather than the
       decedent’s estate. Therefore, the primary purpose and intent of an attorney-client
       relationship between the personal representative of the deceased and the attorney who
       brings a wrongful death action is to benefit the decedent’s beneficiaries, as we
       determined in DeLuna. Since the beneficiaries named in a wrongful death action are
       intended beneficiaries of the action rather than merely incidental beneficiaries, as was
       the case in Pelham, the attorney’s duty extends to them. The assertion that an attorney’s
       duty only extends to the personal representative is at odds with the very purpose of the
       Act and ignores Pelham, DeLuna and Carter.

¶ 21       Defendants contend that the scope of an attorney’s duty should not extend to the
       decedent’s beneficiaries because of the “potential for conflicts” that can arise at the
       distribution phase of the wrongful death action. Defendants maintain that an attorney
       cannot exercise undivided loyalty to each beneficiary at that stage since each
       beneficiary’s interest is potentially adverse to one another. Nevertheless, defendants
                                               -7-
       did not specifically allege in their motions to dismiss that there was any conflict among
       the beneficiaries in this case. Defendants have only alleged that the “potential for
       conflicts” should negate the imposition of a duty. A motion to dismiss “must specify
       wherein the pleading or division thereof is insufficient.” 735 ILCS 5/2-615(b) (West
       2012). Since we will not decide an issue that has no bearing on the case before us, we
       need not address defendant’s contention because no specific conflict was alleged here.
       See Barth v. Reagan, 139 Ill. 2d 399, 419 (1990). Additionally, a court of review will
       not decide moot or abstract questions or render advisory opinions. People v. Campa,
       217 Ill. 2d 243, 269 (2005). Therefore, we make no determination as to the scope of an
       attorney’s duty in a wrongful death action when a conflict among the beneficiaries is
       specifically alleged.

¶ 22       Further, in contrast to defendants’ contention, we do not view the beneficiaries in a
       wrongful death action the same as individual beneficiaries of a decedent’s estate, where
       a potential conflict of interest may arise between the estate’s interest and the interest of
       each of the beneficiaries of the estate. A wrongful death action is brought for the
       exclusive benefit of the beneficiaries who are the true parties in interest as opposed to
       an action that is brought to benefit the decedent’s estate. Carter, 2012 IL 113204, 33.

¶ 23       Having determined that defendants owe Powell a legal duty, we now turn to
       plaintiff’s complaint in this case. The complaint alleged negligence against defendants
       in counts I and II. Specifically, it alleged that Powell had an attorney-client relationship
       with defendants or, in the alternative, he was an intended beneficiary of the legal
       services in the wrongful death action. Plaintiff also alleged that defendants failed to
       protect Powell’s interest in the settlement monies when they knew he was unable to act
       in his own interest and failed to notify the probate court that he was to receive the first
       and second settlement amounts and that Leona was accepting the settlement monies on
       his behalf. The complaint further alleged that defendants drafted and filed the petitions
       to distribute the settlement proceeds, which did not include a provision that Powell’s
       share should be distributed in accordance with section 2.1 of the Act. These allegations
       were sufficient to plead the elements of a duty at the distribution of funds phase of the
       action as well as a breach of that duty for purposes of a section 2-615 motion to dismiss.

¶ 24        We next consider whether plaintiff’s complaint sufficiently alleged defendants’
       acts or omissions proximately caused him injury. To satisfy the element of proximate
       cause, the plaintiff must plead sufficient facts to establish that “but for” the negligence
       of the attorney, the plaintiff would not have suffered actual damages. See Northern
       Illinois Emergency Physicians, 216 Ill. 2d at 306-07. Plaintiff’s complaint alleged that
                                                -8-
       as a direct and proximate result of the careless and negligent acts or omissions of
       defendants, Powell would have had a guardian appointed for his estate to protect his
       interest in the settlement proceeds and would not have been deprived of those funds. As
       the appellate court noted, Powell’s share of the first settlement totaled $5,000, which
       did not require the probate court’s supervision. Section 2.1 of the Act requires the
       supervision of the probate court only when the proceeds are in excess of $5,000.
       Therefore, plaintiff cannot establish that the Wunsch defendants’ acts or omissions
       proximately caused him injury in the form of monetary damages and count I of the
       complaint was properly dismissed. However, Powell’s share of the second settlement
       totaled about $118,000, which did require the probate court’s supervision pursuant to
       section 2.1 of the Act. Had defendants properly adhered to the provisions in the Act, a
       guardian for Powell’s estate would have been appointed and the proceeds from the
       second settlement would have been distributed under the probate court’s supervision
       and Powell would not have been deprived of those funds. Regarding count II, the
       complaint sufficiently alleged that defendants’ acts or omissions proximately caused
       plaintiff actual damages in that he was deprived of the settlement monies he received.
       We agree with the appellate court that plaintiff’s complaint sufficiently pled the
       proximate cause element and the circuit court erred in dismissing count II of the
       complaint.

¶ 25                                  III. CONCLUSION

¶ 26       For the above reasons, we affirm the appellate court’s judgment and its remand of
       the cause to the circuit court.

¶ 27      Appellate court judgment affirmed.

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