Crowe v. Taradash

2021 IL App (2d) 200316-U

• Court: Appellate Court of Illinois
• Decided: May 20, 2021
• Docket: 2-20-0316
• Status: Unpublished

Opinion

2021 IL App (2d) 200316-U No. 2-20-0316 Order filed May 20, 2021

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

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT ______________________________________________________________________________

HAROLD M. CROWE, ) Appeal from the Circuit Court ) of McHenry County. Plaintiff-Appellant, ) ) v. ) No. 19-LA-256 ) RANDALL TARADASH and THE ) TARADASH LAW OFFICES, ) Honorable ) Kevin G. Costello, Defendant-Appellees. ) Judge, Presiding. ______________________________________________________________________________

JUSTICE BIRKETT delivered the judgment of the court. Presiding Justice Bridges and Justice Zenoff concurred in the judgment.

ORDER

¶1 Held: Five-year extended limitations period for fraudulent concealment of a cause of action did not apply to legal malpractice claim alleging an improperly induced settlement, where (1) plaintiff did not allege any acts of concealment apart from the acts that induced the settlement and that formed the basis of his suit; and (2) plaintiff, upon discovering the grounds for his malpractice claim, still had a reasonable time in which to file his action before the normal two-year limitations period expired.

¶2 Plaintiff, Harold M. Crowe, filed a complaint sounding in legal malpractice against

defendants, Randall Taradash and the Taradash Law Offices. Defendants moved to dismiss the

complaint (see 735 ILCS 5/2-619(a)(5) (West 2018)) as barred by the two-year statute of 2021 IL App (2d) 200316-U

limitations (735 ILCS 5/13-214.3(b) (West 2018)). Plaintiff contended that the complaint was

timely because defendants had fraudulently concealed his cause of action, thus triggering the five-

year statute of limitations (see id. § 13-215). The trial court granted defendants’ motion. Plaintiff

appeals, arguing that (1) the trial court erred in applying the two-year statute of limitations instead

of the five-year statute, which would have made the complaint timely and (2) the court abused its

discretion in denying plaintiff leave to amend the complaint. We affirm.

¶3 I. BACKGROUND

¶4 On August 23, 2019, plaintiff filed his complaint. It alleged the following facts. On

December 9, 2009, while he was working for the Village of Hanover Park (Village), plaintiff was

seriously injured in a motor vehicle accident. At the time of the accident, his average wage was

approximately $1015.96 a week. He never returned to full-time work. On or about July 18, 2012,

plaintiff hired defendants to pursue a workers’ compensation claim. The parties signed a standard

representation agreement that implicitly held defendants to the standard of care for attorneys.

¶5 The complaint alleged that defendants breached the agreement by failing to perform to the

standard of care. They did not promptly move for immediate hearings to obtain temporary total

disability benefits and did not seek to require the Village to pay all medical bills or the cost of

employment rehabilitation. In 2015, defendants induced plaintiff to settle the action by telling him

that the arbitrator would award only what defendants asked and that plaintiff could hope for no

more. The case was settled for a lump-sum payment of $275,000; after deducting attorney fees and

costs, plaintiff’s award was only $583.35 per month over his life expectancy of 31 years. At the

time of the settlement, defendants did not explain to plaintiff that he was giving up numerous

rights, including future medical payments justified by his serious injuries and his worsening

condition.

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¶6 The complaint alleged that defendants pressured plaintiff into accepting the settlement by

repeatedly assuring him that it was the most that he could get and that he should be able to succeed

in future medical claims. These statements were false and defendants knew it. The purpose of the

misleading statements was to conceal a cause of action that plaintiff had against defendants for

wrongfully handling his case. The case was easily worth more than twice what he settled for. As

a result of defendants’ fraudulent concealment, plaintiff did not discover that he had a cause of

action until 2017, when his new attorney advised him so.

¶7 Defendants moved to dismiss the complaint as untimely. They alleged as follows. On June

1, 2015, plaintiff signed the agreement settling his case. On February 27, 2017, his present lawyer,

Thomas W. Gooch III, sent a letter to defendants. In the letter, Gooch stated in part:

“I have been retained to represent [plaintiff] in an attorney malpractice case against

you and your firm for the wrongful settlement of his workers’ compensation claim. I

understand that [plaintiff] consented to the settlement[;]however, the basis of this claim is

the pressure placed upon him to settle the matter and the minimal amount the case settled

for in view of his ongoing disabilities and inability to work.”

¶8 Defendants argued that, as a matter of law, the complaint was untimely. It was filed two

years and six months after Gooch identified in writing the purportedly negligent conduct on which

the complaint was based. Under section 13-214.3(b) of the Code of Civil Procedure (Code), an

action for attorney malpractice “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 2018). Thus, according to case law, a cause of action

accrues when the client knows enough to inquire further to determine whether an actionable wrong

was committed. Carlson v. Fish, 2015 IL App (1st) 140526, ¶ 23. Accrual does not require actual

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knowledge of the specific allegedly negligent conduct. Id. In general, a client is deemed to have

constructive knowledge of an injury wrongfully caused by an attorney by the time that he has met

with a second attorney and discussed the subject matter of the alleged negligence. Barratt v.

Goldberg, 296 Ill. App. 3d 252, 258 (1998). Therefore, defendants argued, plaintiff’s cause of

action accrued no later than February 27, 2017, when Gooch made a claim on defendants that was

premised on the professional negligence and injuries that were alleged in the complaint. The

statute of limitations expired February 27, 2019, well before the complaint was filed.

¶9 Defendants’ motion argued that, as a matter of law, plaintiff could not rely on section 13-

215 of the Code. Under section 13-215, if a person fraudulently conceals a cause of action from

the knowledge of the person entitled to it, “the action may be commenced at any time within 5

years after the person entitled to bring the same discovers that he or she has such cause of action,

and not afterwards.” 730 ILCS 5/13-215 (West 2018). The motion gave two reasons why the

complaint’s allegation of fraudulent concealment was insufficient.

¶ 10 First, the alleged fraudulent concealment was premised on the same facts as was the cause

of action. Defendants contended that this case was indistinguishable from Barratt, which held that

an attorney-malpractice complaint was untimely, reasoning in part that the plaintiff’s allegation

that the attorney misled her into accepting an inadequate settlement was integral to the complaint

and thus could not be a basis to use section 13-215. Barratt, 296 Ill. App. 3d at 257-58.

¶ 11 Second, section 13-215’s five-year window does not apply if the plaintiff discovers the

fraudulent concealment when reasonable time remains under the underlying statute of limitations

to file the complaint. See id. at 258. Defendants reasoned that, on February 27, 2017, the latest

date at which plaintiff and his counsel knew or should have known of the alleged fraudulent

concealment, they still had (assuming an accrual date of June 1, 2015) more than three months

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until the two-year period of section 13-214.3(b) of the Code expired. Therefore, as a matter of

law, the complaint was untimely.

¶ 12 Plaintiff responded to the motion dismiss. He did not contend that the complaint was

timely under section 13-214.3(b), but he maintained that there was at least a question of fact as to

whether section 13-215 applied. Plaintiff argued that, as his fiduciaries, defendants’ failure to

disclose the true nature of his case, including that he should have received a much larger settlement,

was fraudulent concealment.

¶ 13 Plaintiff noted that when a party knew or should have known that he had a cause of action

is usually a question of fact. See Jackson Jordan, Inc. v. Leydig, Voit & Mayer, 158 Ill. 2d 240,

250 (1994). He contended that there was insufficient evidence to take this question from the fact

finder. Thus, as the complaint was filed less than five years after June 1, 2015, it was timely.

¶ 14 The trial court granted defendants’ motion and dismissed the complaint. The court held

first that, as a matter of law, plaintiff had failed to adhere to the two-year limitation period of

section 13-214.3(b). The court agreed with defendants that February 27, 2017, was the latest date

by which plaintiff knew or should have known of his injury, as Gooch on that date told defendants

that he had been retained to represent plaintiff in an attorney malpractice case against them. Thus,

section 13-214.3(b)’s period expired more than six months before plaintiff filed his complaint.

¶ 15 The court held second that, as a matter of law, section 13-215 did not rescue the complaint.

The court found Barratt on point and cited two respects in which it controlled. First, in neither

Barratt nor the present case had the complaint alleged any specific affirmative acts of fraudulent

concealment other than the attorney’s assurance to the plaintiff, before the judgment, that the

proposed settlement would be satisfactory. The court noted that Barratt requires fraudulent

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concealment of the cause of action by acts undertaken after the injury allegedly caused by the

attorney’s malpractice and with the intent to conceal the cause of action from the client.

¶ 16 Second, the court observed that, under Barratt, the five-year period of section 13-215 does

not apply if the plaintiff discovers the fraudulent concealment of his cause of action and a

reasonable time remains within the two-year period to file his complaint. Here, when plaintiff

discovered his cause of action on February 27, 2017 (at the latest), he still had until June 1, 2017,

in which to file his complaint.1 As plaintiff had retained an attorney who notified defendants that

he was claiming malpractice, three months was “more than [a] reasonable period” in which to file

a complaint that “turned out to be five pages.”

¶ 17 Plaintiff moved to reconsider the dismissal, essentially reiterating the arguments that he

had made in responding to defendants’ motion to dismiss. Plaintiff also requested, alternatively,

leave to amend his complaint to allege further facts regarding the statute of limitations. Plaintiff’s

motion did not include any such facts or explain how new facts would affect the resolution of the

issue. The court denied the motion to reconsider, and plaintiff timely appealed.

¶ 18 II. ANALYSIS

1 The court apparently assumed that, even if plaintiff did not discover the fraudulent

concealment of his cause of action until February 27, 2017, the cause of action itself accrued on

June 1, 2015, the date of the judgment. As our discussion of the discovery rule shall show, this

assumption was unsound and worked against plaintiff. As either date of accrual (or any date in

between) would not change the result, and as we review the correctness of the trial court’s

judgment, not its reasoning, we say no more on this matter.

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¶ 19 On appeal, plaintiff contends first that the trial court erred in dismissing his complaint as

time-barred. Plaintiff does not argue that he satisfied section 13-214.3(b)’s two-year deadline.

However, he argues that defendants did not establish that section 13-215 did not apply. For the

following reasons, we disagree.

¶ 20 Section 2-619(a)(5) of the Code allows for the dismissal of an action that “was not

commenced within the time limited by law.” 735 ILCS 5/2-619(a)(5) (West 2018). Our review

of a section 2-619(a)(5) dismissal is de novo. Carlson v. Fish, 2015 IL App (1st) 140526, ¶ 22.

¶ 21 As plaintiff relies solely on section 13-215, set out earlier, we discuss only that ground.

We agree with defendants and the trial court that Barratt is on point and requires affirmance, for

two independently sufficient reasons.

¶ 22 In Barratt, the defendant law firm represented the plaintiff in a dissolution-of-marriage

case that went to a judgment, based on a settlement, in December 1987. At this time, the statute

of limitations for attorney malpractice was five years. Effective January 1, 1991, the period was

shortened to two years. In spring 1991, the plaintiff retained another lawyer to determine whether

the 1987 judgment could be vacated or modified. In March 1996, she filed a malpractice action

against the defendant. She alleged that the five-year limitations period applied and that it was only

in spring of 1991, when she retained the second attorney, that she knew or should have known of

the defendant’s negligent representation. On the defendant’s motion, the trial court dismissed the

complaint as time-barred. The plaintiff appealed. Barratt, 296 Ill. App. 3d at 254-55.

¶ 23 The appellate court affirmed. The court first addressed whether the old or new statute of

limitations applied. By its terms, the new two-year statute applied to causes of action that accrued

on or after January 1, 1991. Id. at 256; see 735 ILCS 5/13-214.3(f) (West 1996). Thus, it applied

to the plaintiff’s cause of action, which accrued in spring 1991, when she met with the second

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attorney to determine whether she had grounds to move to vacate or modify the 1987 judgment.

Id. at 256. The court rejected the plaintiff’s contention that shortening the limitation period by

three years would produce an unjust or absurd result. Under the new statute, the plaintiff still had

a reasonable time (until spring of 1993) to file the complaint. Id. at 256-57. Thus, as the complaint

was filed in 1996, it was untimely. Id. at 257.

¶ 24 The plaintiff argued alternatively that, even if the two-year statute applied, section 13-215,

which read as it does today, enlarged the time for filing because the defendant had fraudulently

concealed the cause of action. The appellate court rejected this contention.

¶ 25 The court held first that fraudulent concealment could not be shown by the defendant’s

assurances to the plaintiff, before and up to the date of the settlement, that the result that it had

obtained was the best that she could expect. The fraudulent concealment could not be based on

the same acts that constituted the alleged malpractice. Id. at 258. Because the plaintiff had no

contact at all with the defendant after the settlement/judgment, the defendant had done nothing to

induce her to delay filing her complaint or to prevent her from discovering her cause of action. Id.

¶ 26 The court held second that, in any event, the plaintiff actually knew of her cause of action

by spring 1991, which was well within the two-year limitations period. Thus, her complaint was

subject to the well-established rule that, if the plaintiff discovers the fraudulent concealment and a

reasonable period remains within the relevant limitations period, section 13-215 will not apply to

lengthen that period. Id.; see Anderson v. Wagner, 79 Ill. 2d 295. 322 (1979). The plaintiff

discovered any fraudulent concealment in spring 1991, when she met with the second attorney to

determine whether the defendant had committed malpractice. Barratt, 296 Ill. App. 3d at 258-59.

This was when she discovered her cause of action. Therefore, she had until spring 1993 to file her

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complaint. Because she waited until 1996 and section 13-215 did not apply, the complaint was

barred. Id. at 259.

¶ 27 Here, section 13-215 fails to rescue plaintiff’s complaint, for the same reasons that it failed

in Barratt. First, the alleged fraudulent concealment consisted entirely of defendants’ assurances

to plaintiff, up to the date of the settlement but not beyond, that the result was the best that could

be obtained. Under Barratt, this was not fraudulent concealment.

¶ 28 Plaintiff attempts to rely on more than these assurances. He contends that defendants

fraudulently concealed his cause of action by violating their duty, as his fiduciaries, to speak. He

contends that, based on this duty, he did not need to allege or show that defendants “lulled him.”

¶ 29 Plaintiff misapplies the law. Whatever the scope of defendants’ fiduciary obligation, it did

not extend to telling him that he had a cause of action against them for malpractice. See Fortune

v. English, 226 Ill. 262, 269 (1907); Carlson, 2015 IL App (1st), ¶ 45. In Barratt, the court held

that the plaintiff was still required to allege facts to show that she failed to discover her cause of

action due to the trust and confidence that she placed in the defendant. Because she did not even

have contact with the defendant after the settlement, she could not do so. Barratt, 296 Ill. App. 3d

at 258. That holding applies here.

¶ 30 Second, as a matter of law, the plaintiff discovered both her cause of action and any

fraudulent concealment no later than February 27, 2017, when Gooch accused defendants of

committing malpractice in several specific respects and stated that he would file a complaint on

plaintiff’s behalf against them. Thus, according to Barratt’s reasoning, plaintiff had until February

27, 2019, to file the complaint. Even if the cause of action accrued on June 1, 2015, when the

original judgment was entered (as the trial court apparently assumed), plaintiff still had until June

1, 2017, to file the complaint, which was three months and one day after he discovered the

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fraudulent concealment. This was more than a reasonable time. But plaintiff still waited until

August 23, 2019. Moreover, whether defendants were plaintiff’s fiduciaries does not affect this

requirement. See id., 296 Ill. App. 3d at 258. Thus, the trial court correctly held that the complaint

was untimely.

¶ 31 Plaintiff argues that, even if the court correctly so ruled, it erred in refusing to allow him

to amend his complaint. We disagree. Whether to allow amendments to the complaint was within

the court’s discretion, and we may not disturb its decision absent an abuse of that discretion.

Barratt, 296 Ill. App. 3d at 259. To determine whether the court abused its discretion, we consider

(1) whether the proposed amendment would cure the defective pleading; (2) whether defendants

would suffer prejudice or surprise as a result of the proposed amendment; (3) whether the proposed

amendment was timely; and (4) whether previous opportunities to amend the complaint can be

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

¶ 32 The trial court did not abuse its discretion. The pertinent factors fully support its decision;

indeed, the first alone is dispositive. In asking leave to amend, plaintiff did not supply any new

facts that he wished to plead, much less explain how new facts would have cured the untimeliness

of the complaint. Further, no amendment could have changed when the underlying judgment was

entered, when plaintiff discovered his injury and the alleged fraudulent concealment, and when he

filed his malpractice complaint. This chronology compelled dismissal. Of course, the court could

also conclude that defendants would incur undue prejudice from a motion to amend filed past the

expiration of the limitations period; that plaintiff had waited unduly to propose amendments; and

that, if plaintiff had new facts to plead, he could have sought leave to amend earlier.

¶ 33 III. CONCLUSION

¶ 34 For the reasons stated, we affirm the judgment of the circuit court of McHenry County.

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¶ 35 Affirmed.

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