Cripe v. Leiter

683 N.E.2d 516, 291 Ill. App. 3d 155, 225 Ill. Dec. 348, 1997 Ill. App. LEXIS 504
Appellate Court of Illinois·Decided July 14, 1997·No. 3—96—1008, 3—96—1033 cons.·Published·Cited by 21 cases

Opinion

JUSTICE BRESLIN

delivered the opinion of the court:

Plaintiff Roberta Cripe, as guardian for Roberta Schmitz, brought this action for fraud, breach of fiduciary duty and legal malpractice against defendants Thomas Leiter and his law firm, The Leiter Group. The trial court found that section 2—1115 of the Illinois Code of Civil Procedure (Code) (735 ILCS 5/2—1115 (West 1994)) did not prohibit Cripe from seeking punitive damages for the common law fraud counts in her complaint, and we granted Gripe’s application for leave to appeal pursuant to Supreme Court Rule 308 (155 Ill. 2d R. 308) (3—96—1008). During the course of the litigation, Thomas Leiter failed to comply with a request to produce income tax records, and the trial court held him in indirect civil contempt. Leiter appealed that ruling (3—96—1033), and we consolidated the two appeals. We hold that section 2—1115 does not prohibit a plaintiff from seeking punitive damages when the plaintiff’s complaint states a cause of action for common law fraud. We also hold that Leiter must comply with the order that required him to produce his individual income tax returns, and if he does so, the contempt order is to be vacated. Accordingly, we affirm and remand with directions.

FACTS

Roberta Schmitz was the sole beneficiary of two trusts. She hired Leiter to transfer the trusts from the First National Bank of Peoria to the South Side Bank. After the South Side Bank was appointed as the successor trustee of the trusts, it retained Leiter as its attorney with respect to the trusts. Schmitz also retained Leiter to defend a proceeding to declare her incompetent. That proceeding was filed by Schmitz’ daughter, Roberta Cripe, who is the current guardian of her estate and the plaintiff herein (Guardian).

In her second amended complaint, the Guardian alleged that Schmitz had received several billing statements in which the defendants made false statements with regard to the number of hours that were spent on the trust matters and the guardianship case. The Guardian further alleged that the defendants knew that these statements were false and that Schmitz suffered $40,000 in damages as a result of her reliance on the statements.

The defendants responded by filing a motion to strike the portions of the complaint that sought punitive damages. The trial court struck the prayer for punitive damages on all counts except those that alleged common law fraud. Thereafter, we granted the defendants’ petition for leave to appeal pursuant to Supreme Court Rule 308.

Eventually, the Guardian served the defendants with a request to produce financial documents related to her punitive damages claim. Leiter failed to comply with the request to produce his personal income tax returns, and the trial court found him in indirect civil contempt. The parties agree that Leiter’s refusal to comply with the order was for the purpose of obtaining interlocutory review of the discovery order.

ANALYSIS

The certified question in this appeal is whether section 2—1115 of the Code prohibits punitive damages when a plaintiff alleges that an attorney committed common law fraud by falsifying billings.

The General Assembly has prohibited punitive damages in medical and legal malpractice cases by enacting section 2—1115 of the Code, which provides:

"In all cases, whether in tort, contract or otherwise, in which the plaintiff seeks damages by reason of legal, medical, hospital, or other healing art malpractice, no punitive, exemplary, vindictive or aggravated damages shall be allowed.” 735 ILCS 5/2—1115 (West 1994).

Although section 2—1115 of the Code is broad enough to encompass any acts arising out of the provision of legal services, it is only applicable if the behavior alleged in the complaint amounts to legal malpractice. Safeway Insurance Co. v. Spinak, 267 Ill. App. 3d 513, 518, 641 N.E.2d 834, 837 (1994).

Legal malpractice is defined as the "failure of an attorney to use such skill, prudence, and diligence as lawyers of ordinary skill and capacity commonly possess and exercise in performance of tasks which they undertake.” Black’s Law Dictionary 959 (6th ed. 1990). To prevail in an action for legal malpractice, the plaintiff must plead and prove: (1) the existence of an attorney-client relationship; (2) a negligent act or omission that breached a duty the attorney owed to the client; (3) proximate cause that establishes that but for the attorney’s negligence the plaintiff would not have suffered an injury; and (4) damages. Beastall v. Madson, 235 Ill. App. 3d 95, 600 N.E.2d 1323 (1992).

Based on the foregoing definition and the elements that a plaintiff must prove, it is clear that legal malpractice and common law fraud are distinct causes of action. Compare Beastall, 235 Ill. App. 3d at 100, 600 N.E.2d at 1327 (action for legal malpractice is based on negligent breach of professional duty to client), with Connor v. Merrill Lynch Realty, Inc., 220 Ill. App. 3d 522, 528, 581 N.E.2d 196, 200 (1991) (action for fraud is based on intentional misrepresentation made to induce another party to act). In fact, one Illinois court has specifically held that "[professional malpractice is a species of negligence, not fraud.” Roe v. Catholic Charities of the Diocese of Springfield, 225 Ill. App. 3d 519, 528, 588 N.E.2d 354, 360 (1992). The difference between fraud, which involves intentional conduct, and malpractice, which involves only negligent conduct, is significant; punitive damages are prohibited in simple negligence cases but are appropriate in fraud cases. See Loitz v. Remington Arms Co., 138 Ill. 2d 404, 415, 563 N.E.2d 397, 402 (1990) (punitive damages appropriate for fraud and gross negligence but not for simple negligence).

The defendants argue that the legislative history of section 2—1115 implies that common law fraud is included within the scope of the statute. But the plain language of the statute clearly limits its applicability to legal malpractice cases. Since the statute is not ambiguous, we cannot resort to extrinsic aids such as legislative history. See Owen v. Board of Education of Kankakee School District No. 111, 261 Ill. App. 3d 298, 632 N.E.2d 1073 (1994).

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Cripe v. Leiter, 683 N.E.2d 516, 291 Ill. App. 3d 155, 225 Ill. Dec. 348, 1997 Ill. App. LEXIS 504 (Ill. Ct. App. 1997).

683 N.E.2d 516 (Cripe v. Leiter) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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