Court Opinion

ID: 6497040
Source: CourtListenerOpinion
Date Created: 2022-06-30 21:05:17.012011+00
Date Added: 2024-06-11T08:49:36.655276
License: Public Domain

2022 IL App (1st) 200724-U

                                        No. 1-20-0724

                                   Order filed June 30, 2022

                                                                                 Fourth Division

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the
limited circumstances allowed under Rule 23(e)(1).

                                           IN THE
                             APPELLATE COURT OF ILLINOIS
                                FIRST JUDICIAL DISTRICT

WILLIAM CARLSON and WILLIS CAPITAL, LLC,                         )      Appeal from the
                                                                 )      Circuit Court of
              Plaintiffs-Appellants,                             )      Cook County.
                                                                 )
v.                                                               )      16 L 383
                                                                 )
THOMAS CRONIN, AARON L. DAVIS, LELAND W.                         )
HUTCHINSON, JR., DANIEL J. KELLEY, and                           )
CRONIN & COMPANY LTD,                                            )      Honorable
                                                                 )      Daniel J. Kubasiak,
              Defendants-Appellees.                              )      Judge Presiding.

       JUSTICE MARTIN delivered the judgment of the court.
       Presiding Justice Reyes and Justice Rochford concurred in the judgment.

                                           ORDER

¶1     Held: We affirm the circuit court’s grant of summary judgment in favor of the Cronin
             defendants on count II of the amended complaint for legal malpractice brought by
             William Carlson.

¶2     William Carlson (Carlson) entered into a settlement agreement with his former business

partners Thomas Hutchinson (Hutchinson) and Owen O’Neill (O’Neill). Under the terms of the

agreement, Carlson agreed to sell them his ownership interest in Belvedere Trading LLC. Later,
No. 1-20-0724

Carlson sought to reopen and set aside the agreement, arguing that it was procured by fraud and

malfeasance on the part of his former business partners. Having been unsuccessful in his efforts to

have the agreement set aside, Carlson filed a series of legal malpractice claims against various law

firms and lawyers who advised him in connection with the agreement. See Willis Capital LLC v.

Belvedere Trading LLC, 2015 IL App (1st) 132183; Carlson v. Fish, 2015 IL App (1st) 140526

(Carlson I); and Carlson v. Michael Best & Friedrich LLP, 2021 IL App (1st) 191961 (Carlson

II). This is the latest appeal in that series.1

¶3                                          I. BACKGROUND

¶4      In 2002, Carlson founded Belvedere Trading LLC (Belvedere) for the purpose of trading

S&P 500 equity index options. Carlson owned his interest in Belvedere through another limited

liability company, Willis Capital LLC, of which he was the sole owner and member. Hutchinson

and O’Neill eventually joined Belvedere as partners. Willis Capital LLC, 2015 IL App (1st)

132183, ¶ 5. “Carlson was the sole managing member and held about a 62% membership interest;

O’Neill held about a 25% interest and Hutchinson held the remaining 13% interest.” Carlson I,

2015 IL App (1st) 140526, ¶ 6. However, by 2004, O’Neill and Hutchinson were managing

members and owned an equal 33.3% interest along with Carlson. Id.

¶5      In 2005, Carlson took a leave of absence from actively managing Belvedere due to health

reasons. When Carlson returned to the company in 2006, “he had a falling out with O’Neill and

Hutchinson over numerous issues, including profit distribution and management.” Id. ¶ 7.

¶6      In March 2007, Carlson retained Attorneys Shawn M. Collins and David J. Fish of the

Collins Law Firm, P.C. to represent him in his dispute with O’Neill and Hutchinson; Fish later

formed the Fish Law Firm while continuing to represent Carlson; the two law firms are collectively

        In adherence with the requirements of Illinois Supreme Court Rule 352(a) (eff. July 1, 2018), this
        1

appeal has been resolved without oral argument upon entry of a separate written order.
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referred to as “Collins.” Id.

¶7     In May 2007, Collins filed a request for arbitration on behalf of Carlson with the Chicago

Board Options Exchange (CBOE), as provided for in Belvedere’s operating agreement. Carlson

II, 2021 IL App (1st) 191961, ¶ 6. In addition, Collins filed a complaint for injunctive relief in the

circuit court seeking to dissolve Belvedere and compel a purchase of Carlson’s interest in the

company for fair value. Id. Hutchinson and O’Neill refused Carlson’s request to obtain an appraisal

of Belvedere and also denied his request for access to the company’s books and records.

¶8     In February 2008, the parties agreed to mediate their dispute. Carlson failed to obtain an

independent appraisal of his interest in Belvedere prior to the mediation, but in an e-mail to Collins,

he estimated that by the end of 2009, the company could be sold for $100 million. Id. ¶ 7; Carlson

I, 2015 IL App (1st) 140526, ¶ 8.

¶9     Unbeknownst to Carlson, and prior to the mediation, O’Neill and Hutchinson employed an

accounting firm to conduct an appraisal of Belvedere to determine a market value of Carlson’s

one-third interest in the company. Carlson II, 2021 IL App (1st) 191961, ¶ 7; Willis Capital LLC,

2015 IL App (1st) 132183, ¶ 8. The accounting firm developed statistical models to estimate this

value and presented the models to O’Neill and Hutchinson. After receiving the statistical models,

O’Neill and Hutchinson directed the accounting firm not to prepare a written report of its findings

and to stop further work on the appraisal. None of this was disclosed to Carlson.

¶ 10   At the mediation, Carlson again asked for an appraisal of Belvedere. In response,

Hutchinson and O’Neill claimed that an appraisal was unnecessary as they were not interested in

selling their interests in Belvedere. Carlson II, 2021 IL App (1st) 191961, ¶ 8; Willis Capital LLC,

2015 IL App (1st) 132183, ¶ 9. The mediation resulted in Carlson agreeing to sell his interest in

Belvedere for $17.5 million. The three owners signed a document delineating the terms of the sale,

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which were subsequently memorialized in a settlement agreement signed by them in March 2008.

Carlson II, 2021 IL App (1st) 191961, ¶ 9; Carlson I, 2015 IL App (1st) 140526, ¶ 8.

¶ 11   The settlement agreement provided in part that it represented:

       “a complete compromise of the controversy between the parties involving disputed issues

       of law and fact, and that each party fully assumes the risk that the facts or law may be other

       than they believe”; the parties agree “that they are not fiduciaries to each other with respect

       to the negotiations, preparation and execution of” the agreement; and the parties were

       advised by their respective attorneys and advisors as to the merits of the agreement and

       that no party was relying on any promise, representation or disclosure of any other party.

¶ 12   In addition, the agreement contained a fee-shifting provision providing that attorney fees

and expenses could be awarded to a prevailing party in “an action brought by any party to enforce

the terms” of the agreement.

¶ 13   In September 2008, approximately six months after the mediated settlement, Carlson

exchanged e-mails with Shawn Collins expressing his belief that O’Neill and Hutchinson had

fraudulently tricked him into selling his interest in Belvedere for less than its true value. Carlson

II, 2021 IL App (1st) 191961, ¶ 11; Carlson I, 2015 IL App (1st) 140526, ¶ 9. Carlson and Shawn

Collins discussed the possibilities of petitioning the circuit court to reopen and set aside the

settlement agreement, and of filing a fraud action against O’Neill and Hutchinson.

¶ 14   In November 2008, Carlson contacted a college friend Chris Parker, who was an attorney

with the law firm of Michael Best & Friedrich, LLP (Michael Best). Carlson asked Parker to review

the settlement agreement and evaluate whether he had any viable claims against his former

business partners. Carlson II, 2021 IL App (1st) 191961, ¶ 12. Carlson also began expressing

dissatisfaction with the legal representation he received from Collins.

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¶ 15   On November 19, 2008, Carlson met with attorneys from the law firm of Drinker, Biddle

& Reath, LLP (Drinker), to review the settlement agreement and discuss possible fraud claims

against his former business partners. Id. ¶ 13; Carlson I, 2015 IL App (1st) 140526, ¶ 16. Carlson

claimed that during these discussions, questions were raised concerning whether the legal services

he received from Collins had been substandard. Carlson maintained that this was the first time he

became aware of a possible legal malpractice claim against Collins.

¶ 16   From August 18, 2010, through September 16, 2010, Carlson officially retained the law

firm of Michael Best for consultation regarding a potential legal malpractice action against Collins.

Parker advised Carlson that a legal malpractice action against Collins “may be tough in the face of

the statute of limitations.” Carlson II, 2021 IL App (1st) 191961, ¶ 14. Parker informed Carlson

that the applicable statute of limitations for a legal malpractice claim was two years from the date

Carlson should have learned of the alleged malpractice. Id.

¶ 17   On November 11, 2010, Carlson retained the law firm of Cronin & Co., Ltd (Cronin). In

the course of their research, Carlson and counsel from Cronin contacted the accounting firm which

had conducted the pre-mediation appraisal of Belvedere. They discovered that unbeknownst to

Carlson, O’Neill and Hutchinson had employed the accounting firm to conduct a pre-mediation

appraisal of Belvedere to determine a market value of Carlson’s interest in the company. Id. ¶ 15;

Willis Capital LLC, 2015 IL App (1st) 132183, ¶ 12.

¶ 18   Cronin filed a legal malpractice complaint on behalf of Carlson against Collins on

November 18, 2010. Carlson II, 2021 IL App (1st) 191961, ¶ 16; Carlson I, 2015 IL App (1st)

140526, ¶ 17; Willis Capital LLC, 2015 IL App (1st) 132183, ¶ 12. In the complaint, Carlson

alleged that Collins failed to obtain an appraisal of Belvedere and “thereby permitted their clients

to settle without any appropriate advice and counsel as to what was being surrendered.” Willis

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Capital LLC, 2015 IL App (1st) 132183, ¶ 12. Cronin subsequently filed an amended legal

malpractice complaint against Collins on February 23, 2011. Carlson II, 2021 IL App (1st)

191961, ¶ 16. In March 2011, Collins moved to dismiss the amended complaint on statute of

limitations grounds.

¶ 19   On May 17, 2011, Cronin filed a request for arbitration on Carlson’s behalf with the CBOE.

Id. ¶ 17. Carlson alleged that his former business partners were fiduciaries and had committed

fraud by withholding information regarding Belvedere’s value. O’Neill and Hutchinson filed a

motion to dismiss the arbitration.

¶ 20   On July 13, 2011, Carlson and Collins entered into a tolling agreement whereby Carlson

voluntarily dismissed his amended legal malpractice complaint against Collins, without prejudice.

Id. ¶ 18. The tolling agreement provided that if the arbitration action was “resolved on or after

April 13, 2012, [Carlson] shall have a period of 90 days after resolution of the arbitration to refile

this action. If the arbitration is resolved before April 13, 2012, the one-year refiling provision in

735 ILCS 5/2-1009 shall remain intact.” Id. The tolling agreement further provided that it “shall

not act to revive any cause(s) of action already barred by the statute of limitations when the legal

malpractice complaint was filed on November 18, 2010.” The CBOE eventually dismissed the

arbitration with prejudice on March 5, 2012. Id. ¶ 19; Willis Capital LLC, 2015 IL App (1st)

132183, ¶ 12.

¶ 21   On March 26, 2012, pursuant to section 2-1401 of the Code of Civil Procedure (Code) (735

ILCS 5/2-1401 (West 2012)), Carlson through Cronin filed a petition, and subsequent amended

petition, in the circuit court, seeking to “reopen” the settlement agreement. Carlson II, 2021 IL

App (1st) 191961, ¶ 19; Willis Capital LLC, 2015 IL App (1st) 132183, ¶¶ 1, 13. The amended

petition alleged the following: O’Neill and Hutchinson had fraudulently concealed information

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No. 1-20-0724

regarding the value of Belvedere prior to execution of the settlement agreement; the provision in

the settlement agreement waiving fiduciary duties was unenforceable; and the CBOE’s dismissal

of the arbitration had no preclusive effect on the petition. Willis Capital LLC, 2015 IL App (1st)

132183, ¶ 1.

¶ 22   O’Neill and Hutchinson filed a motion to dismiss the amended petition pursuant to section

2-619.1 of Code (735 ILCS 5/2-619.1 (West 2012)). They argued that the amended petition was

barred by the two-year statute of limitations applicable to section 2-1401 petitions. They further

argued that the amended petition was barred by the CBOE’s order dismissing the arbitration and

by the release contained in the settlement agreement. They also contended that the amended

petition was barred by Illinois Supreme Court Rule 201(b)(3) (eff. July 1, 2014), which protects

the identity of consultants, their opinions, and work product from discovery, except under

“exceptional circumstances.” Carlson II, 2021 IL App (1st) 191961, ¶ 19; Willis Capital LLC,

2015 IL App (1st) 132183, ¶ 14.

¶ 23   On June 7, 2013, the circuit court dismissed the amended petition with prejudice. Carlson

II, 2021 IL App (1st) 191961, ¶ 20; Willis Capital LLC, 2015 IL App (1st) 132183, ¶ 15. The court

determined that the amended petition failed to state a claim for rescission of the settlement

agreement because it failed to allege sufficient facts showing that Carlson intended to return the

$17.5 million. The court also determined that the amended petition failed to state a claim for

fraudulent concealment in light of the nonreliance and mutual release clauses contained in the

settlement agreement. The court further found that Carlson failed to exercise due diligence in the

2007 litigation where he never tried to obtain an appraisal of Belvedere prior to the mediation,

even though he was able to produce an appraisal in the present litigation based on documents

available at the time of the settlement. Willis Capital LLC, 2015 IL App (1st) 132183, ¶ 15. The

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court also determined that the amended petition was barred by the doctrine of res judicata and that

Illinois Supreme Court Rule 201(b)(3) (201 Ill.2d R. 201(b)(3)) protected the accounting firm’s

appraisal from disclosure as consultant work product. Id.

¶ 24   O’Neill and Hutchinson subsequently filed a petition seeking attorney fees and costs

pursuant to the fee-shifting provision in the settlement agreement. Carlson filed a notice of appeal

on July 5, 2013. On January 6, 2014, the circuit court awarded O’Neill and Hutchinson

$172,391.75 in fees and costs. Willis Capital LLC, 2015 IL App (1st) 132183, ¶ 16. Carlson filed

a second notice of appeal on January 31, 2014, challenging the court’s fee award. This court

consolidated the two appeals (Willis Capital appeal).

¶ 25   While the Willis Capital appeal was pending, Cronin refiled Carlson’s legal malpractice

complaint against Collins on July 5, 2013. Carlson I, 2015 IL App (1st) 140526, ¶ 17. The circuit

court subsequently granted Collins’s motion to dismiss the refiled complaint pursuant to section

2-619(a)(5) of the Code (735 ILCS 5/2-619(a)(5) (West 2012)), finding it was time-barred by the

two-year statute of limitations applicable to legal malpractice actions (735 ILCS 5/13-214.3(b)

(West 2012)). The court determined that the cause of action accrued at the time Carlson knew he

had been injured, which the court found was no later than September 2008. The court found that

by November 12 or 13 of 2008, Carlson had identified his former business partners as the wrongful

cause of his injury, which put him on inquiry notice that a cause of action had accrued. Id. at 19.

The court concluded that because Carlson’s initial legal malpractice complaint was filed on

November 18, 2010, which was more than two years after his cause of action accrued, the

complaint was time-barred by the two-year statute of limitations applicable to legal malpractice

actions. Id. Carlson appealed (Carlson I appeal).

¶ 26   Carlson retained the law firm of Michael Best for a second time on February 27, 2014, to

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act as a consultant in connection with his appeals in Willis Capital and Carlson I.

¶ 27   On appeal in Willis Capital, this court affirmed in part and reversed in part. We affirmed

the circuit court’s dismissal of Carlson’s amended petition to reopen the settlement agreement. We

determined that even if Carlson’s former business partners owed him a fiduciary duty and

fraudulently concealed the results of the appraisal from him, this did not relieve Carlson of his

duty to exercise due diligence in discovering the appraisal value of his interest in Belvedere prior

to the mediation and settlement. Id. ¶¶ 20-23. We reversed the court’s judgment with respect to

the award of attorney fees and costs pursuant to the fee-shifting provision in the settlement

agreement. We determined that the provision was intended to award attorney fees and costs to

prevailing parties who sought to enforce the terms of the settlement agreement, as opposed to

parties, such as O’Neill and Hutchinson, who sought to defend the terms of the agreement in

response to a section 2-1401 petition to invalidate the agreement. Id. ¶¶ 24-25.

¶ 28   On appeal in Carlson I, we affirmed the circuit court’s dismissal of Carlson’s legal

malpractice complaint against Collins. Carlson I, 2015 IL App (1st) 140526, ¶¶ 4, 48. We agreed

with the circuit court that the complaint was time-barred by the two-year statute of limitations

found in section 13-214.3(b) of the Code. We found that correspondence between Carlson and

Collins, which began in September 2008 and continued through November 2008, along with

certain judicial admissions made by Carlson, showed that he was aware he was wrongfully injured

by his former business partners no later than November 13, 2008, and probably as early as

September 2008. Id. ¶¶ 28-33.

¶ 29   Carlson’s second retention of Michael Best ended in May 2015, after Carlson decided not

to file a petition for leave to appeal Carlson I to the Illinois Supreme Court. Carlson discharged

Cronin in June 2015.

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¶ 30   On January 13, 2016, Carlson filed a two-count complaint for legal malpractice in the

circuit court against Michael Best, Cronin, and several attorneys associated with Cronin. Carlson

II, 2021 IL App (1st) 191961, ¶ 28. Carlson filed an amended complaint on August 31, 2016.

Count I of the amended complaint made allegations against Michael Best. Count II made

allegations against Cronin and Cronin attorneys Aaron L. Davis, Leland W. Hutchinson, Jr., and

Daniel J. Kelley (collectively, Cronin defendants).

¶ 31   The circuit court subsequently granted summary judgment in favor of Michael Best and

we affirmed in Carlson II, 2021 IL App (1st) 191961, ¶ 109. In affirming the circuit court’s

decision we determined the following: Michael Best did not cause Carlson to lose any legal

malpractice claims that he may have had against Collins because these claims were time-barred by

the applicable statute of limitations prior to Carlson retaining Michael Best in August 2010;

Michael Best did not cause Carlson to lose any potential legal malpractice claims against Drinker

because these claims were still viable when Carlson retained successor counsel in November 2010;

and Carlson cannot sue Michael Best for failing to inform him of a claim against Michael Best as

there is no duty for a law firm to inform a client that he or she has a claim against it. Id. ¶ 107.

¶ 32   We also determined that the circuit court did not abuse its discretion in denying Carlson

leave to file a second amended legal malpractice complaint where the proposed amendment

concerned allegations that were time-barred by the applicable period of repose and Carlson failed

to establish the first factor set forth in Loyola Academy v. S & S Roof Maintenance, Inc., 146 Ill.

2d 263 (1992), showing that the allegations would cure defects in the prior pleadings. Id. ¶ 106.

We further determined that the court did not abuse its discretion in denying Carlson’s motion to

conduct additional discovery where he failed to support the motion with a Rule 191(b) affidavit.

We finally concluded that the court did not abuse its discretion in declining to address arguments

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Carlson raised in his motion for reconsideration as they were not only waived, but without merit.

Id. ¶ 108.

¶ 33   The present appeal concerns count II of Carlson’s amended legal malpractice complaint

against the Cronin defendants. In this count, Carlson alleged in the alternative, that if it was

determined that his claims against Michael Best were time-barred by the applicable statute of

limitations, then the Cronin defendants breached the applicable standard of care by failing to advise

him that he had potential legal malpractice claims against Michael Best, Drinker, and Collins.

Carlson also alleged overbilling and failure to account for billed time. In response, the Cronin

defendants filed a motion for summary judgment and attorneys Davis, Hutchinson, Jr., and Kelley,

filed their own motion for summary judgment.

¶ 34   The circuit court entered an opinion and order on December 6, 2019, and a subsequent

opinion and order on April 24, 2020, granting the motions for summary judgment on count II of

Carlson’s amended legal malpractice complaint. The court also denied Carlson’s motions for leave

to file second and third amended legal malpractice complaints. Carlson now appeals.

¶ 35   We address Carlson’s claims starting with his contention that the circuit court erred in

granting summary judgment in favor of the Cronin defendants. We provide additional facts in the

analysis section where necessary to address specific issues.

¶ 36                                            II. ANALYSIS

¶ 37                                       A. Summary Judgment

¶ 38   “The purpose of summary judgment is to determine whether a genuine issue of material

fact exists that would require a trial.” Hodges v. St. Clair County, 263 Ill. App. 3d 490, 492 (1994).

Summary judgment is appropriate where “the pleadings, depositions, and admissions on file,

together with the affidavits, if any, show that there is no genuine issue as to any material fact and

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that the moving party is entitled to a judgment as a matter of law.” 735 ILCS 5/2-1005(c) (West

2012). “In determining whether a genuine issue as to any material fact exists, a court must construe

the pleadings, depositions, admissions, and affidavits strictly against the movant and liberally in

favor of the opponent.” Gilbert v. Sycamore Municipal Hospital, 156 Ill. 2d 511, 518 (1993). “A

triable issue precluding summary judgment exists where the material facts are disputed, or where,

the material facts being undisputed, reasonable persons might draw different inferences from the

undisputed facts.” Adams v. Northern Illinois Gas Co., 211 Ill. 2d 32, 43 (2004). Our review of a

summary judgment order is de novo. Id.

¶ 39                                         1. Drinker

¶ 40    Carlson first argues that the circuit court erred in granting summary judgment in favor of

Cronin. Carlson contends that he established a prima facie case that Cronin violated the standard

of care by failing to file a legal malpractice lawsuit against Drinker prior to expiration of the statute

of limitations or by failing to obtain a tolling agreement.

¶ 41    Section 13-214.3 of the Code “sets forth two independent timing requirements for legal

malpractice actions: the two-year statute of limitations in subsection (b) and the six-year statute of

repose in subsection (c).” Sorenson v. Law Offices of Theodore Poehlmann, 327 Ill. App. 3d 706,

708 (2002); 735 ILCS 5/13-214.3(b), (c) (West 2014). We focus our attention on subsection (c)

which provides that an action for damages based on tort, contract, or otherwise against an attorney

arising out of an act or omission in the performance of professional services may not be

commenced more than six years after the date on which the act or omission occurred. 735 ILCS

5/13-214.3 (c) (West 2014).

¶ 42    “In contrast to a statute of limitations, which determines the time within which a lawsuit

may be commenced after a cause of action has accrued, a statute of repose extinguishes the action

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after a defined period of time, regardless of when the action accrued.” Evanston Insurance Co v.

Riseborough, 2014 IL 114271, ¶ 16. When the repose period expires, the cause of action is

extinguished and the plaintiff’s right to bring the action is terminated. Evanston Insurance, 2014

IL 114271, ¶ 16. Statutes of repose begin to run “on the last date on which the attorney performs

the work involved in the alleged negligence.” Snyder v. Heidelberger, 2011 IL 111052, ¶ 18.

¶ 43   In this case, the last act or omission which gave rise to Carlson’s potential claims of legal

malpractice against Drinker occurred in October 2009, when Drinker purportedly failed to advise

Carlson of the two-year statute of limitations regarding his claims against Collins. Thus, the six-

year statute of repose started running in October 2009 and ended October 2015. The record shows

that Carlson discharged Cronin in June 2015 and obtained new legal representation. Therefore,

Carlson’s legal malpractice claims against Drinker remained viable nearly four months after

Cronin was discharged.

¶ 44   Our courts have recognized that when a plaintiff’s cause of action remains viable at the

time the attorney is discharged, it cannot be said that the action was lost due to the attorney’s

alleged negligence, since the action still existed at the time the attorney was discharged. See

Nettleton v. Stogsdill, 387 Ill. App. 3d 743, 755-56 (2008). Thus, as a matter of law, Cronin cannot

be deemed a proximate cause of the loss of Carlson’s legal malpractice claims against Drinker

because these claims remained viable months after Cronin was discharged.

¶ 45                                 2. Individual Attorneys

¶ 46   Carlson next contends that he had viable legal malpractice claims against attorneys Aaron

L. Davis, Leland W. Hutchinson, Jr., and Daniel J. Kelley, in their individual and personal

capacities for failing to advise him about legal malpractice claims he had against Drinker. In

support of this contention Carlson cites to Illinois Supreme Court Rule 721(b) (eff. July 1, 2003).

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The rule provides in relevant pat that “[a]ny attorney who by act or omission causes the

corporation, association, limited liability company, or registered limited liability partnership to act

in a way which violates standards of professional conduct, including any provision of this rule, is

personally responsible for such act or omission and is subject to discipline therefor.” Id.

¶ 47   Our courts have determined that although the rules of professional conduct may be relevant

to the standard of care in a legal malpractice claim, the rules, in and of themselves, do not establish

liability in a legal malpractice case. Vandenberg v. Brunswick Corporation, 2017 IL App (1st)

170181, ¶¶ 33-34; Nagy v. Beckley, 218 Ill. App. 3d 875, 881 (1991).

¶ 48   In addition, we further note that it is well established that “[a] claim for legal malpractice

requires (1) an attorney-client relationship, (2) a duty arising from that relationship, (3) a breach

of that duty, and (4) actual damages or injury proximately caused by the breach.” Zweig v. Miller,

2020 IL App (1st) 191409, ¶ 25. The record in this case shows that Carlson entered into an

attorney-client relationship with Thomas Cronin and the Cronin law firm, but not the individual

attorneys employed by the firm. This is evidenced by the November 19, 2010, engagement letter

between Carlson and Cronin, which provided that although the law firm anticipated “using

associate lawyers and perhaps other attorneys to prosecute this litigation,” the firm would “remain

primarily responsible for the prosecution of the litigation.”

¶ 49   Moreover, not only was there not an attorney-client relationship between Carlson and any

of the individual attorneys employed by the Cronin law firm -- no allegations of negligent conduct

were asserted against the attorneys in their individual capacities. Therefore, we find that the circuit

court properly granted summary judgment to attorneys Davis, Hutchinson, Jr., and Kelley, in their

individual capacities.

¶ 50                                         3. Overbilling

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¶ 51   Carlson next argues that Cronin breached the standard of care by overbilling him for its

legal services. In his initial legal malpractice complaint, Carlson alleged that Cronin billed him in

excess of $750,000, which he claimed was in breach of the attorney fee cap of $250,000 contained

in the retainer agreement. In his amended complaint, Carlson alleged that Cronin billed him in

excess of $750,000 and never provided him with an itemized bill or detailed statement of the work

performed. Carlson claimed that this amount was “unreasonable, unnecessary, or otherwise unfair

because under no circumstance would it cost in excess of $750,000 to work on two motions to

dismiss, two appeals and initiate three legal proceedings.”

¶ 52   Carlson maintains that the circuit court erred in finding that his claim for overbilling was

time-barred, as a matter of law, by the two-year statute of limitations set forth in subsection (b) of

section 13-214.3 of the Code (735 ILCS 5/13-214.3(b) (West 2014)). Subsection (b) provides that

an action for damages “against an attorney arising out of an act or omission in the performance of

professional services *** must be commenced within 2 years from the time the person bringing

the action knew or reasonably should have known of the injury for which damages are sought.”

735 ILCS 5/13-214.3(b) (West 2014). For purposes of a legal malpractice action, a plaintiff is

considered to be injured when he suffers a loss for which he may seek monetary damages. Stevens

v. McGuireWoods LLP, 2015 IL 118652, ¶ 12.

¶ 53   The two-year statute of limitations applicable to legal malpractice actions incorporates the

“discovery rule,” which delays the commencement of the statutory period until the injured party

knows or reasonably should know that he has been injured, and that the injury may have been

wrongfully caused. Hermitage Corp. v. Contractors Adjustment Co., 166 Ill. 2d 72, 77 (1995). The

discovery rule was developed “to avoid mechanical application of a statute of limitations in

situations where an individual would be barred from suit before he was aware that he was injured.”

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Hermitage Corp., 166 Ill. 2d at 77-78.

¶ 54   “The limitations period in a legal malpractice case begins to run from the time the injured

party knows or reasonably should know that he has suffered an injury which was wrongfully

caused.” Brummel v. Grossman, 2018 IL App (1st) 162540, ¶ 26. “There is no requirement that a

plaintiff must discover the full extent of his or her injuries before the statute of limitations begins

to run.” Hoffman v. Orthopedic Systems, Inc., 327 Ill. App. 3d 1004, 1010 (2002). “A person knows

or reasonably should know an injury is ‘wrongfully caused’ when he or she possesses sufficient

information concerning an injury and its cause to put a reasonable person on inquiry to determine

whether actionable conduct is involved.” Carlson I, 2015 IL App (1st) 140526, ¶ 23 (quoting

Hoffman, 327 Ill. App. 3d at 1011). “At that point, the burden is upon plaintiff to inquire further

as to the existence of a cause of action.” Hoffman, 327 Ill. App. 3d at 1011. The question as to

when a plaintiff knew or reasonably should have known of his injury, so as to trigger the statute

of limitations, is ordinarily a question of fact; however, the issue may be determined as a matter

of law where the undisputed facts allow for only one conclusion. Butler v. Mayer, Brown & Platt,

301 Ill. App. 3d 919, 922 (1998).

¶ 55   The central issue to be decided is when Carlson possessed sufficient information such that

he knew or reasonably should have known that he was being overbilled. Carlson contends he was

unaware of any claims of negligence related to overbilling until after he discharged Cronin in June

2015. Carlson asserts that the statute of limitations could not begin to run until sometime after June

2015, and thus, his initial legal malpractice complaint, which was filed in January 2016, was filed

within the two-year statute of limitations.

¶ 56   Carlson argues that he is not seeking liability based on the fee cap being exceeded, but

rather on fact that he was never provided with an itemized bill or detailed statement of work

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performed. We find Carlson’s arguments unpersuasive.

¶ 57   The fee cap provides an appropriate baseline. Once the attorney fee cap of $250,000 was

exceeded, Carlson knew or reasonably should have known that any additional work beyond the

fee cap for which he was billed, was not contemplated in the retainer agreement. The record

contains evidence showing that by the end of 2011, and certainly no later than December 2013,

Carlson possessed sufficient information such that he knew or reasonably should have known that

not only had the fee cap been exceeded, but that he was not receiving itemized billing.

¶ 58   On January 18, 2012, Carlson sent Cronin an email and an attached spreadsheet showing

that by the end of 2011, Carlson had paid Cronin $545,000 in fees.

¶ 59   On August 29, 2013, Carlson sent an email to Cronin stating in part: “I’m bringing [a] fees

spreadsheet for where we currently are,” “[w]e have to make more progress *** We need more

eyes on this.” On September 13, 2013, Carlson emailed Cronin stating in part: “One question is,

what meaningful strides are we making? People we could be updating during these long breaks in

the legal system. Pantle ruled in early June. It’s been 100 days. *** We should have openly

analyzed this already. Pantle ruled 100 days ago. That is a very long time.”

¶ 60   On October 3, 2013, Carlson emailed Cronin stating: “This is a message to you … And

you are in charge of this case. Oh yeah, its hugely important. When do you want to meet? Enough

bulls***.” On November 29, 2013, Carlson emailed Cronin stating in part: “[S]ince nov 2010, we

are now in the 750k range for fees (including consultants, experts).” Then on December 17, 2013,

Carlson sent Cronin an email and an attached spreadsheet showing that by August 2013, Carlson

had paid Cronin $750,000 in fees, and stated that the “damage here is unmistakable.”

¶ 61   This series of emails and spreadsheets, dating from January 2012 to December 2013,

demonstrate that any injury from the alleged overbilling accrued possibly as early as the end of

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2011, but no later than December 2013. By the latter date, Carlson clearly possessed sufficient

information such that he knew or reasonably should have known that he was being overbilled by

Cronin. By December 2013, Carlson possessed sufficient information of an injury from overbilling

and its possible wrongful cause to put a reasonable person on inquiry to determine whether

actionable conduct was involved.

¶ 62   Carlson, however, did not file his action against Cronin until January 13, 2016, more than

two years after December 2013. Therefore, we find the circuit court did not err in finding that

Carlson’s claim against Cronin for overbilling was time-barred, as a matter of law, by the two-year

statute of limitations set forth in subsection (b) of section 13-214.3 of the Code (735 ILCS 5/13-

214.3(b) (West 2014)).

¶ 63                                      4. Expert Affidavit

¶ 64   Carlson next argues that the circuit court erred in striking the expert affidavit of Attorney

Richard Lehman. Carlson submitted the affidavit in opposition to the Cronin defendants’ motions

for summary judgment. Carlson maintains that the affidavit provided admissible expert testimony.

¶ 65   There is a split of authority whether the standard of review for a circuit court’s ruling on a

motion to strike an affidavit in conjunction with a motion for summary judgment is de novo or

abuse of discretion. See Brettman v. Virgil Cook & Son, Inc., 2020 IL App (2d) 190955, ¶¶ 54-56

(discussing the split of authority). De novo consideration means that the reviewing court performs

the same analysis that a circuit court would perform. Bituminous Casualty Corp. v. Iles, 2013 IL

App (5th) 120485, ¶ 19. We believe that de novo review is the proper standard to apply here

because we review the same documentary evidence, Lehman’s affidavit, as did the circuit court.

See Independent Trust Corp. v. Hurwick, 351 Ill. App. 3d 941, 952 (2004) (circuit court’s

determination based solely on documentary evidence reviewed de novo). In any event, we need

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not attempt to resolve the issue here, as our finding would be the same under either standard of

review.

¶ 66      “An affidavit submitted in the summary judgment context serves as a substitute for

testimony at trial.” Berke v. Manilow, 2016 IL App (1st) 150397, ¶ 21. “The function of affidavits

in summary judgment proceedings is to show whether the issues raised are genuine and whether

each party has competent evidence to offer which tends to support his side of the issue.” Harris

Bank Hinsdale, N.A. v. Caliendo, 235 Ill. App. 3d 1013, 1025 (1992). With these principles in

mind, we examine Lehman’s affidavit to determine whether he raises sufficient genuine issues of

material fact necessary to survive the Cronin defendants’ motions for summary judgment.

¶ 67      In his affidavit, Lehman opined than an error was made in determining when the six-year

statute of repose began to run. Lehman opined that the statute began to run as soon as the event

giving rise to the legal malpractice occurred. According to Lehman, this event occurred in

November/December 2008, when Drinker failed to advise Carlson of the date by which he had to

file his legal malpractice suit against Collins. Lehman stated that the “November/December 2008

Drinker Biddle representation started the running of the statute of repose, and the statute of repose

ran on Carlson’s claim of malpractice against Drinker Biddle in November 2014, while Cronin

still was representing Carlson.”

¶ 68      Contrary to Lehman’s averments concerning when the six-year statute of repose begins to

run, our supreme court has determined that “[t]he period of repose in a legal malpractice case

begins to run on the last date on which the attorney performs the work involved in the alleged

negligence.” (Emphasis added.) Snyder, 2011 IL 111052, ¶ 18. As previously mentioned, the last

act or omission which gave rise to Carlson’s potential claims of legal malpractice against Drinker

occurred in October 2009, when Drinker allegedly failed to advise Carlson of the two-year statute

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of limitations regarding his claims against Collins. Therefore, the six-year statute of repose started

running in October 2009 and ended October 2015. As a result, Lehman’s opinion on this issue

does not create an issue of material fact precluding summary judgment in favor of the Cronin

defendants.

¶ 69   Lehman next opined that the attorney fees Cronin charged Carlson were suspect and

unreasonable. Lehman averred that Cronin charged Carlson over $750,000 in attorney fees without

providing him with an itemized billing statement specifying how the fees were calculated, and the

amount of time spent on various tasks by lawyers and paralegals. Lehman averred that a portion

of the fees Cronin charged was for work on an appeal spanning the time between the January 2014

trial court judgment and the March 2015 appellate court opinion. Lehman opined that Carlson’s

fee claim was not filed outside of the limitation period.

¶ 70   Lehman’s opinions on the reasonableness of the attorney fees incurred by Carlson all relate

to Carlson’s claim of overbilling, a claim which we have determined is time-barred, as a matter of

law, by the two-year statute of limitations set forth in subsection (b) of section 13-214.3 of the

Code (735 ILCS 5/13-214.3(b) (West 2014)). Therefore, Lehman’s opinions here do not create an

issue of material fact precluding summary judgment in favor of the Cronin defendants. See, e.g.,

Xeniotis v. Cynthia Satko, D.D.S., M.S., P.C., 2014 IL App (1st) 131068, ¶ 74 (expert affidavit

failed to raise question of fact with respect to motion for summary judgment). As a result, we find

that the circuit court did not err in striking Lehman’s affidavit.

¶ 71   For the reasons set forth above, we find that the circuit court did not err in granting

summary judgment in favor of the Cronin defendants.

¶ 72                         B. Leave to File Third Amended Complaint

¶ 73   Carlson next contends that the circuit court should have granted him leave to file a third

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amended legal malpractice complaint. Carlson argues that “[t]he amendment was timely because

Cronin had time to conduct any discovery needed and this was the second time the claims were

amended against Cronin so there was absolutely no reason [he] should be denied leave to amend.”

¶ 74   Plaintiffs do not have an absolute right to amend a pleading. Giles v. Parks, 2018 IL App

(1st) 163152, ¶ 24. The decision rests in the sound discretion of the circuit court. Id; Abramson v.

Marderosian, 2018 IL App (1st) 180081, ¶ 30. A circuit court abuses its discretion in denying

leave to amend a pleading if granting leave to amend would further the ends of justice. Insurance

Benefit Group, Inc. v. Guarantee Trust Life Insurance Co., 2017 IL App (1st) 162808, ¶ 50.

¶ 75   Our supreme court has identified four factors reviewing courts should consider in

determining whether a circuit court abused its discretion in denying leave to amend a pleading:

“(1) whether the proposed amendment would cure the defective pleading; (2) whether other parties

would sustain prejudice or surprise by virtue of the proposed amendment; (3) whether the proposed

amendment is timely; and (4) whether previous opportunities to amend the pleading could be

identified.” Loyola Academy v. S&S Roof Maintenance, Inc., 146 Ill. 2d 263, 273 (1992). “The

party seeking leave to amend bears the burden of demonstrating that all four factors favor the relief

requested.” United Conveyor Corp. v. Allstate Insurance Co., 2017 IL App (1st) 162314, ¶ 36.

¶ 76   We confine our analysis to the first Loyola factor because it is dispositive. If a party fails

to establish this first factor, showing that the proposed amendment would cure the defective

pleading, then the court need not proceed to consider the remaining three factors. Hayes

Mechanical, Inc. v. First Industrial, L.P., 351 Ill. App. 3d 1, 7 (2004).

¶ 77   Carlson’s proposed third amended complaint merely rehashes the allegations against

Cronin that were contained in count II of the amended complaint. The only differences between

the two are found in paragraphs 154 and 155 of the proposed third amended complaint. Here,

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Carlson alleges additional duties that he claims the Cronin defendants allegedly breached.

However, the allegations against the Cronin defendants remain the same and are not supported or

substantiated by any additional facts. In essence, there was nothing in the pleadings that the

proposed amendment would have cured. Therefore, we find that the circuit court did not abuse its

discretion in denying Carlson leave to file a third amended legal malpractice complaint.

¶ 78                                  III. CONCLUSION

¶ 79   We find that the circuit court did not err in granting summary judgment in favor of the

Cronin defendants. We also find that the circuit court did not abuse its discretion in denying

Carlson leave to file a third amended legal malpractice complaint.

¶ 80   Affirmed.

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