Hoth v. Stogsdill

569 N.E.2d 34, 210 Ill. App. 3d 659, 155 Ill. Dec. 34
CourtAppellate Court of Illinois
DecidedMay 8, 1991
Docket2-90-0014, 2-90-0498 cons.
StatusPublished
Cited by10 cases

This text of 569 N.E.2d 34 (Hoth v. Stogsdill) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hoth v. Stogsdill, 569 N.E.2d 34, 210 Ill. App. 3d 659, 155 Ill. Dec. 34 (Ill. Ct. App. 1991).

Opinion

JUSTICE UNVERZAGT

delivered the opinion of the court:

In this consolidated appeal, plaintiff, Maureen Hoth, formerly known as Maureen Prondzinski, appeals from the orders of the circuit court of Du Page County dismissing her complaint for legal malpractice against defendants, William J. Stogsdill, Jr.; William J. Stogsdill, Jr., P.C., a professional corporation; Kowalczyk and Stogsdill, Ltd., a professional corporation; Andrew Carter and Mark Kowalczyk.

On or about March 28, 1984, plaintiff engaged defendants to represent her in an action filed by Du Page National Bank (the bank) in the circuit court of Du Page County. The action arose out of a loan made by the bank in May 1978 to plaintiff’s former husband and his business partner. The two men used the proceeds of the loan to purchase a parcel of real estate in West Chicago. The loan was secured by a mortgage on the property. At the time of the closing on the loan, plaintiff executed and delivered her personal guarantee of the loan.

Some time in 1981, the two men defaulted on the repayment of the loan. In December 1983 the bank filed a two-count complaint seeking, in count I, foreclosure against the real estate and, in count II, a judgment against the plaintiff on her guarantee of the loan. On May 15, 1984, the court entered a judgment in favor of the bank and against plaintiff in the amount of $79,042.84.

When the bank commenced supplementary proceedings against plaintiff to enforce the judgment, plaintiff retained new attorneys. Pursuant to section 2 — 1401 of the Code of Civil Procedure (Ill. Rev. Stat. 1983, ch. 110, par. 2 — 1401), counsel for plaintiff filed a motion to vacate the May 15, 1984, judgment. On January 14, 1986, the trial court entered an order vacating the judgment. On July 28, 1987, this court in DuPage National Bank v. Jackson (1987), 156 Ill. App. 3d 1171 (unpublished order under Supreme Court Rule 23), reversed the trial court’s decision and remanded the case for reinstatement of the judgment. On December 28, 1987, plaintiff filed a voluntary petition in bankruptcy.

On May 11, 1989, plaintiff filed a complaint against defendants alleging that defendants were negligent in their representation of her and that their negligence caused the judgment to be entered against her and in favor of the bank. Plaintiff had not listed this cause of action in the schedule listing all property of the plaintiff on her petition in bankruptcy.

Defendants moved to dismiss plaintiff’s complaint on the ground that she lacked standing to bring the action because of her pending bankruptcy. Plaintiff filed a response to defendants’ motion which included an affidavit from the bankruptcy trustee, stating that he consented to plaintiff’s filing of the action while awaiting a determination by the bankruptcy court regarding whether the cause of action was property of the bankrupt’s estate. Plaintiff’s response also included an amendment to her petition in bankruptcy, listing her cause of action against defendants as personal property. Plaintiff also submitted an October 10, 1989, letter from the trustee establishing the trustee’s intention to abandon the claim. On October 11, 1989, the trial court denied defendants’ motion to dismiss the complaint.

On November 9, 1989, defendants filed a motion to reconsider the court’s October 11, 1989, order denying their motion to dismiss. To their motion to reconsider, defendants attached the amendment to plaintiff’s bankruptcy petition which listed plaintiff’s cause of action as personal property and which had been previously submitted to the court by plaintiff prior to the trial court’s October 11, 1989, order denying defendants’ motion to dismiss. Defendants also submitted a copy of a notice from the bankruptcy court setting a hearing for November 17, 1989, on the trustee’s application to settle and compromise the adversary proceeding brought by him against plaintiff. That settlement included the proposed transfer to plaintiff of the trustee’s right, title, and interest in the instant cause of action. Based on the attachments to their motion to reconsider, defendants argued that plaintiff’s cause of action was an asset in the bankruptcy matter and that until there was an abandonment of the cause of action by the trustee, plaintiff had no standing to bring the action.

At a November 16, 1989, hearing on defendants’ motion to reconsider, the trial court granted defendants’ motion and dismissed plaintiff’s complaint with prejudice due to lack of standing.

Following the bankruptcy court's November 17 hearing on the trustee’s application to settle and compromise, that court entered an order on November 22, 1989, authorizing, among other things, the trustee to transfer to plaintiff his interest in plaintiff’s action against defendants. On November 30, 1989, plaintiff filed a motion to reconsider the trial court’s November 16, 1989, order dismissing the complaint. To that motion plaintiff attached a copy of the bankruptcy court’s November 22 order. Plaintiff maintained that, in dismissing plaintiff’s complaint, the trial court unduly relied on the bankruptcy court’s November 17 notice of hearing to rule that plaintiff’s claim belonged to the bankruptcy estate. Additionally, plaintiff asserted that the November 17 notice pertained to matters other than the instant cause of action and that the bankruptcy court’s November 22 order, while making no determination regarding whether plaintiff’s legal malpractice claim against defendants was property of the bankruptcy estate, authorized the trustee to assign his interest, “if any,” in the action to plaintiff.

Relying on the bankruptcy court’s November 22 order, plaintiff argued that the claim was never a part of the bankruptcy estate but asserted that, even if it had belonged to the estate, plaintiff had the right to file her cause of action against defendants. It was plaintiff’s position that, if she had not filed and preserved her cause of action while awaiting the trustee’s decision whether to pursue or abandon the claim, the statute of limitations on bringing her action could have run and she would have lost her right to bring the action. On December 19, 1989, the trial court denied plaintiff’s motion to reconsider. Plaintiff filed a timely notice of appeal.

Prior to the trial court’s December 19 order, the trustee in a letter dated December 12, 1989, assigned his interest in the instant cause of action to plaintiff. The trustee’s assignment included his rights under section 108 of the Bankruptcy Reform Act of 1978 (11 U.S.C. §108 (1978)) to commence a cause of action within two years from the commencement of the order for relief signified by plaintiff’s filing of her bankruptcy petition on December 28,1987.

On December 22, 1989, plaintiff filed another complaint which was, in large part, identical in content to the complaint dismissed on November 16, 1989. The latter complaint differed from the former complaint in that it asserted the assignment from the trustee to plaintiff of the trustee’s interest in plaintiff’s claim of legal malpractice against defendants. Attached to the complaint was the trustee’s December 12, 1989, letter, assigning his interest in the claim to plaintiff, as well as the bankruptcy court’s November 22, 1989, order, authorizing the trustee to assign such interest.

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Bluebook (online)
569 N.E.2d 34, 210 Ill. App. 3d 659, 155 Ill. Dec. 34, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hoth-v-stogsdill-illappct-1991.