Zweig v. Miller

2020 IL App (1st) 191409
CourtAppellate Court of Illinois
DecidedDecember 31, 2020
Docket1-19-1409
StatusPublished
Cited by9 cases

This text of 2020 IL App (1st) 191409 (Zweig v. Miller) 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
Zweig v. Miller, 2020 IL App (1st) 191409 (Ill. Ct. App. 2020).

Opinion

2020 IL App (1st) 191409

No. 1-19-1409

Opinion filed December 31, 2020

Fourth Division

______________________________________________________________________________

IN THE APPELLATE COURT OF ILLINOIS FIRST DISTRICT ______________________________________________________________________________ ARIE ZWEIG, Individually and as Trustee of the Arie ) Appeal from the Zweig Self Declaration of Trust Dated June 28, 1990, ) Circuit Court of ) Cook County. Plaintiff-Appellant, ) ) v. ) No. 17 L 2837 ) GERALD MILLER and VANASCO, GENELLY & ) MILLER, ) Honorable ) Brigid M. McGrath, Defendants-Appellees. ) Judge, presiding.

JUSTICE LAMPKIN delivered the judgment of the court, with opinion. Presiding Justice Gordon and Justice Reyes concurred in the judgment and opinion.

OPINION

¶1 This appeal arose from the legal malpractice action that plaintiff, Arie Zweig, individually

and as trustee of the Arie Zweig Self Declaration of Trust Dated June 28, 1990, filed against

defendants, Gerald Miller and Vanasco, Genelly & Miller. The trial court granted summary

judgment in favor of defendants based on the court’s determination that plaintiff’s legal No. 1-19-1409

malpractice claim was barred by the two-year statute of limitations set forth in section 13-214.3(b)

of the Code of Civil Procedure (Code) (735 ILCS 5/13-214.3(b) (West 2016)).

¶2 On appeal, plaintiff argues that his malpractice action was timely filed within two years of

the date he settled the underlying litigation that involved a business investment where defendants

had represented him. Specifically, plaintiff argues that his malpractice cause of action accrued

when that underlying litigation settled because he did not suffer a pecuniary loss until the

settlement occurred. He also argues that filing his malpractice action before the settlement would

have been premature and contrary to the strong policy rationale against “prophylactic malpractice

cases,” wherein the legal malpractice case is completely dependent on the outcome of the pending

underlying case. Alternatively, plaintiff argues that a genuine issue of material fact exists regarding

when he knew or should have known of his injury.

¶3 For the reasons that follow, we hold that summary judgment in favor of defendants was

proper because plaintiff failed to file his complaint within the two-year statute of limitations, which

began to run, at the latest, when he knew, as a matter of law, of his injury and that it was wrongfully

caused, i.e., when he incurred legal fees directly caused by hiring additional counsel to attempt to

achieve a result in the underlying case that was not achieved during defendants’ representation.

Accordingly, we affirm the judgment of the trial court. 1

¶4 I. BACKGROUND

¶5 In December 2010, plaintiff Zweig and his wife had dinner with their close friends, Mr.

and Mrs. Bozorgi, who discussed an investment opportunity. The Bozorgis asked plaintiff to join

1 In adherence with the requirements of Illinois Supreme Court Rule 352(a) (eff. July 1, 2018), this appeal has been resolved without oral argument upon the entry of a separate written order.

-2- No. 1-19-1409

them in a partnership, Bedford Med, LLC (Bedford), to build an ambulatory surgical center and

medical office building. They asked him to invest $2 million for a 40% membership, which would

be increased to 49% when the project was finished. Bedford was owned by a holding company,

which was owned by four members of the Bozorgi family. Plaintiff forwarded the materials for

the investment to his counsel, defendants Miller and Vanasco, Genelly & Miller, whom plaintiff

had retained for his business transactions for over 20 years. One document of the materials

included exhibit D, which provided:

“The Company shall distribute (in preference to any other Distribution) up

to [redacted] as and when the Company receives such funds from the Investor upon

the issuance of Membership Interests by the Company to the Investor (whether in

a single issuance or in a series of issuances). Upon each such preferential

Distribution to Magna, Investor’s and Magna’s Capital Contributions shall be

deemed to be adjusted on a dollar for dollar basis and Magna’s and Investor’s

Percentage Interests shall be adjusted accordingly.”

¶6 In his deposition, plaintiff explained that English was not his native language, so he relied

on defendants to adequately review the documents, advise him about the implications of the

documents he would sign, and recommend any amendments so that the agreement reflected his

intentions.

¶7 However, Miller stated in his deposition that ever since his initial representation of plaintiff

in 1986, plaintiff always made his own business decisions and never sought investment advice or

any financial analysis of any proposed or actual investments from defendants. Regarding the

Bedford investment, plaintiff told Miller that he was contributing capital investment funds to

-3- No. 1-19-1409

increase the equity in Bedford, not to purchase shares of stock. Plaintiff said it was a “done deal”

with his great friends and he wanted Miller to review only the issue of what kind of management

control plaintiff would have as a minority owner in Bedford. The nature, scope and extent of

plaintiff’s engagement of defendants was limited to reviewing plaintiff’s management authority.

Plaintiff personally handled all other aspects of the investment on his own. Based on their long

relationship, where plaintiff would negotiate defendant’s invoices to remove charges for services

he deemed unnecessary or not requested, Miller reviewed just the management provisions of the

agreement and found them to be “pretty standard” and thought they “looked fine.” Miller also

looked at the contribution agreement and transfer provisions that would affect plaintiff’s ability to

use his trust.

¶8 In 2011, plaintiff signed the documents and submitted his investment funds. He did not

communicate with Miller concerning the Bedford investment until mid-2013, when plaintiff

mentioned an unchallenged real estate assessment regarding Bedford and that he had not received

its financial and tax information.

¶9 On September 25, 2013, plaintiff and Miller met with the Bozorgis and their attorney to

discuss management and tax issues involving Bedford. At that meeting, plaintiff and Miller were

shocked when the Bozorgis’ counsel disclosed that plaintiff’s investment had been taken out of

Bedford and distributed to the Bozorgi holding company members. Plaintiff and Miller objected,

stating that plaintiff’s investment was a capital contribution, not a purchase and sale, and the

Bozorgis had no authority to distribute that investment. The Bozorgis, however, asserted they had

a clear right under exhibit D to take the money out.

-4- No. 1-19-1409

¶ 10 According to Miller’s deposition, he argued at the meeting that the contract was a

contribution agreement and pointed out contract provisions that prohibited the distribution and

required management approval of anything in exhibit D, which referred to only $1.6 million. The

meeting became very acrimonious. Plaintiff said the Bozorgis were stealing and cheating him and

he never would have agreed to such a deal. Mr. Bozorgi suggested they could sit down and resolve

the problem, but his daughter remained entrenched. The meeting ended shortly thereafter.

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Zweig v. Miller
2020 IL App (1st) 191409 (Appellate Court of Illinois, 2020)

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