Landers Children Family, LLC v. Rees ( 2024 )

NOTICE 2024 IL App (4th) 230460-UThis Order was filed under
FILED
Supreme Court Rule 23 and is July 2, 2024
NO. 4-23-0460
not precedent except in the Carla Bender
limited circumstances allowed 4th District Appellate
under Rule 23(e)(1).
IN THE APPELLATE COURT Court, IL
OF ILLINOIS
FOURTH DISTRICT
LANDERS CHILDREN FAMILY, LLC, an Illinois ) Appeal from the
Limited Liability Company; WILLIAM LANDERS, ) Circuit Court of
Individually and as Co-Administrator on Behalf of the ) Sangamon County
Estate of Ray Landers; NEXT GENERATION ) No. 20L252
MINISTRIES INTERNATIONAL, INC., an Illinois )
Not-for-Profit Corporation; EQUIPPING THE SAINTS )
MINISTRY; INTERNATIONAL, INC.; JENNIFER )
CHANCE; and BILLIE SUE LANDERS, Not )
Individually but as Trustee of the Landers Family Trust,)
Plaintiffs-Appellants, )
v. )
EDMOND REES; BRANDENBURG-REES & REES, )
an Illinois General Partnership; SONDRA NARMONT )
and WILLIAM J. NICHOLLS, as Co-Executors of the )
Estate of John Narmont; JASON GERMERAAD; and )
SCOTT AND SCOTT, P.C., an Illinois Business ) Honorable
Corporation, ) Gail L. Noll,
Defendants-Appellees. ) Judge Presiding.
______________________________________________________________________________
JUSTICE HARRIS delivered the judgment of the court.
Justices Doherty and Turner concurred in the judgment.
ORDER
¶1 Held: The trial court did not err by granting defendants’ motions to dismiss plaintiffs’
legal malpractice complaint on the basis that it was not timely filed within the
two-year statute of limitations.
¶2 Plaintiffs—Landers Children Family, LLC, an Illinois limited liability company
(LCF); William Landers, individually and as coadministrator of the estate of Ray Landers; Next
Generation Ministries International, Inc., an Illinois not-for-profit corporation (Next Generation);
Equipping the Saints Ministry International, Inc. (Equipping the Saints Ministry); Jennifer Chance;
and Billie Sue Landers, as trustee of the Landers Family Trust (Trust)—appeal the trial court’s
dismissal with prejudice of their legal malpractice complaint against defendants—Edmond Rees;
Brandenburg-Rees & Rees, an Illinois general partnership; Sondra Narmont and William J.
Nicholls, as coexecutors of the Estate of John Narmont; Jason Germeraad; and Scott and Scott,
P.C., an Illinois business corporation. They contend the court erred in finding their legal
malpractice action was untimely filed outside the relevant two-year statute of limitations or
determining that their action was untimely as a matter of law when (1) questions of fact existed as
to the timeliness of their complaint or (2) multiple conclusions could be reached from the
undisputed facts. Alternatively, plaintiffs argue the court erred in failing to find the doctrines of
equitable estoppel and fraudulent concealment barred defendants from raising a statute of
limitations defense. We affirm.
¶3 I. BACKGROUND
¶4 On December 28, 2020, plaintiffs filed their legal malpractice complaint against
defendants. Decedent Ray Landers was originally named as a plaintiff in the complaint; however,
following his death during the underlying proceedings, a representative of his estate was
substituted as a party plaintiff. Similarly, on appeal, this court granted a motion filed by counsel
for defendant Narmont, alleging Narmont died in January 2024 and asking to substitute
representatives of his estate as party defendants. (We note a suggestion of death was also filed with
this court indicating defendant Rees died in May 2023; however, no motion to substitute an
alternate party has been filed relative to his death.) Plaintiffs’ complaint set forth the following
factual allegations.
¶5 Ray was a minister who, with his wife Billie Sue Landers and children, “purchased
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and developed *** properties to advance Ray’s ministries and to support their families.” Ray
formed various business entities, including plaintiffs Next Generation, Equipping the Saints
Ministry, and LCF, a real estate development company. Ray’s four children, including plaintiffs
William and Jennifer, were members of LCF. Jennifer was LCF’s manager from 2004 to 2014,
and Ray was authorized to act as LCF’s agent. To finance its projects, LCF obtained loans from
State Bank of Lincoln (State Bank). From May 2009 to January 2014, State Bank extended five
loans to LCF, which totaled over $2.4 million and were secured by mortgages on real estate owned
by LCF. The terms of the loans were set forth in promissory notes, each of which contained a
provision that authorized any attorney to appear in court without process and confess judgment in
favor of State Bank for any amount due on the note.
¶6 In October 2014, Ray began negotiating with State Bank regarding “additional
financing” for LCF. As part of the negotiations, he “sought the advice and counsel of” attorneys
Rees and Narmont. During negotiations, State Bank proposed a forbearance agreement, under
which existing loans “would not be foreclosed upon” and LCF would provide “additional
collateral.” Ray told Rees and Narmont that he did not want to add additional property as collateral
because he intended such property to be inherited by his children. He also informed them of his
belief that State Bank had not accurately stated the amount of the loans. Rees and Narmont advised
Ray that he could protect properties not encumbered by loans by transferring them into a trust. Ray
agreed to follow their advice, and Narmont prepared a family trust. In December 2014, LCF
transferred property not encumbered by the State Bank loans into the Landers Family Trust, of
which Billie Sue was trustee. Thereafter, Rees and Narmont continued to negotiate with State Bank
on behalf of LCF.
¶7 Ultimately, however, State Bank initiated legal proceedings against LCF and other
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plaintiffs. In April 2015, in Sangamon County case No. 15-L-100, State Bank obtained confessions
of judgment based on the five loans it extended to LCF in amounts totaling over $3.2 million and
representing unpaid principal, interest, charges and late fees, and attorney fees. According to
plaintiffs, neither Ray nor LCF were given notice of the proceedings for confessions of judgment.
¶8 Also in April 2015, in Sangamon County case No. 15-CH-192, State Bank brought
an action against LCF, Ray, “and other associated entities” to foreclose on the properties that
secured the promissory notes for the loans. Plaintiffs alleged that when Ray received notice of the
litigation, he forwarded it to Rees and Narmont. Finally, in August 2015, in Sangamon County
case No. 15-CH-316, State Bank brought a third action against LCF and the Trust, alleging the
fraudulent transfer of assets in connection with LCF’s transfer of property into the Trust.
¶9 Plaintiffs alleged that prior to State Bank initiating legal proceedings, Rees caused
his law firm, defendant Brandenburg-Rees & Rees, to file suit against Ray, LCF, Equipping the
Saints Ministry, Next Generation, William, and Jennifer, alleging Rees and his law firm were
entitled to $71,786 in unpaid legal fees. After State Bank’s causes of action were filed, Rees agreed
to represent plaintiffs in both the foreclosure and fraudulent transfer cases, while “Narmont also
agreed that he would continue to assist *** plaintiffs when needed.” According to plaintiffs, Rees
conditioned his representation on Ray consenting to a judgment in the full amount of Rees’s
alleged unpaid attorney fees. Ray agreed, consenting to a judgment of $71,786 on behalf of LCF
and the Trust. Following Ray’s agreement, Rees told Ray he would file an appearance on behalf
of plaintiffs in both the foreclosure and fraudulent transfer cases. Ray contacted Rees “from time
to time *** to see how the cases were going,” and “Rees would assure Ray the cases were
proceeding satisfactorily.” Plaintiffs maintained that when Narmont was asked about the cases, he
repeatedly stated, “[N]ot to worry, ‘We’ll get ‘er done.’ ”
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¶ 10 Plaintiffs maintained, however, that contrary to Rees’s and Narmont’s assurances,
the foreclosure and fraudulent transfer cases “were not going well,” and Rees had not “responded
or answered the complaints or appeared in court.” On September 25, 2015, State Bank obtained a
default judgment of foreclosure on all counts in the foreclosure case. At the time, Rees had not
entered his appearance in the case. The foreclosure judgment provided for a redemption period
ending on February 5, 2016, in connection with one of the properties at issue that was comprised
of farmland, and otherwise stated the trial court’s judgment was final and appealable and that a
sheriff’s sale would occur on a date set by State Bank. On October 8, 2015, State Bank filed notices
of sale, indicating a sheriff’s sale would occur on November 17, 2015.
¶ 11 Plaintiffs alleged that neither Rees nor Narmont took any action on their behalf
after the judgment of foreclosure was entered. They also asserted that neither attorney informed
them that the farmland property could be redeemed until February 2016 or “that someone could
appear at the sheriff’s sale on plaintiff[s’] behalf to bid on the property.” On November 6, 2015,
Rees appeared in court and obtained his judgment for unpaid attorney fees against LCF and the
Trust. The same day, Rees wrote a letter to State Bank’s attorney and requested a postponement
of the November 17, 2015, foreclosure sale. He also mailed an answer to State Bank’s complaint
in the fraudulent transfer case, denying State Bank’s allegations.
¶ 12 Plaintiffs alleged that between November 6 and 17, 2015, Rees did not file his
appearance in the foreclosure case or any motions seeking to set aside the default judgment or to
continue the sheriff’s sale. They further asserted that Rees was “out of town” on November 17,
2015, and the sheriff’s sale went forward with State Bank as the sole bidder on the four properties
that were for sale. Plaintiffs alleged the fair market value of the properties exceeded $2 million
and that the amount State Bank bid for the four properties totaled only $1.25 million. On November
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20, 2015, State Bank filed a motion to confirm the sale of the four properties and mailed notice of
its motion to LCF at Ray’s home address. On December 7, 2015, Rees filed a motion to withdraw
as counsel in the foreclosure case “despite never having filed an appearance in the matter” and
“did not send notice of his motion to Ray.” On December 18, 2015, Rees appeared at a hearing on
State Bank’s motion to confirm the sale and the motion was granted over his objection. On
December 18, 2015, Rees filed another motion to withdraw as counsel “but failed to notice the
motion for hearing.”
¶ 13 On February 5, 2016, the redemption period for the farmland property expired. On
February 9, 2016, a sheriff’s sale was held, and State Bank obtained the property with a bid of
$783,000. Plaintiffs maintained that amount was “unconscionably low,” as an appraisal showed
the property was worth $1.9 million. The sale was confirmed following a hearing on February 26,
2016. Rees did not appear at the hearing on plaintiffs’ behalf, nor did either Rees or Narmont raise
an objection to the confirmation of the sale.
¶ 14 Plaintiffs alleged Rees continued to represent LCF in the fraudulent transfer case
and, on March 26, 2016, appeared in court on its behalf. They asserted, however, that he failed to
appear at later court dates and LCF was sanctioned for failing to comply with State Bank’s
discovery requests. Plaintiffs alleged they were unaware “of the discovery requests until after
responses were due.” Rees filed a motion to withdraw as counsel in the fraudulent transfer case
and, on November 7, 2016, a hearing was held on his motion. The trial court allowed Rees to
withdraw over Ray’s written objection. In his written objection, attached as an exhibit to plaintiffs’
legal malpractice complaint, Ray denied a claim by Rees that it was impossible for him to
communicate with his clients, asserting, instead, that it was Rees who had “stopped
communications.”
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¶ 15 After Rees’s withdrawal in the fraudulent transfer case, Ray “hired successor
counsel in [the fraudulent transfer case] in an attempt to mitigate the damages caused by Rees and
Narmont.” (Although the complaint fails to name the “successor counsel,” the record otherwise
identifies that individual as attorney La Vetta Williams.) New counsel’s mitigation efforts included
filing a motion to vacate the sanctions that had been entered against LCF. According to plaintiffs,
LCF eventually settled in the fraudulent transfer case by paying $1.5 million to State Bank “and
entering into a full release to dismiss [the case] in May 2019.”
¶ 16 With respect to their legal malpractice claims against defendant attorney
Germeraad and his law firm, defendant Scott and Scott, P.C., plaintiffs alleged the following
additional facts. In November 2015, Ray met with Germeraad at his law firm, informing him about
the ongoing litigation with State Bank and the advice he received from Rees and Narmont.
Germeraad agreed to represent plaintiffs “in the foreclosure and collection actions and in
protecting their assets.” However, Germeraad did not enter an appearance in any of the pending
cases. Instead, he initiated a fourth action, Sangamon Count case No. 16-CH-55, “wherein
Germeraad allegedly represented Chicago Title and Trust Company against Ray and various other
Plaintiffs.” The action Germeraad filed was consolidated with the fraudulent transfer case. In
November 2017, Germeraad withdrew as counsel for Chicago Title and Trust Company.
¶ 17 Plaintiffs further alleged that in March 2020, Ray met with “potential counsel
because he believed that [State] Bank may have defrauded LCF.” According to plaintiffs, it was
at that meeting that they first learned attorneys Rees and Narmont may have committed
malpractice, and they retained an attorney to investigate the matter.
¶ 18 Plaintiffs asserted attorneys Rees, Narmont, and Germeraad, and the defendant law
firms owed them a duty of care to handle their legal matters with reasonable care and skill. They
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alleged the attorneys and law firms breached that duty in several respects, including (1) failing to
ascertain their clients’ objectives, (2) failing to fully investigate the facts and law, (3) failing to
advise plaintiffs about alternatives available to them in their litigation with State Bank, (4) failing
to develop a strategy to achieve plaintiffs’ objectives, (5) failing to keep plaintiffs sufficiently or
reasonably informed about the facts, law, and status of the pending litigation, (6) failing to act with
diligence, (7) failing to file an appearance on behalf of plaintiffs in the pending ligation or appear
in court for hearings, (8) placing the interests of defendants ahead of plaintiffs, (9) allowing
personal relationships to interfere with their representation of plaintiffs, (10) lying to plaintiffs,
(11) advising plaintiffs with respect to the transfer of property into a trust and preparing a trust
contrary to plaintiffs’ interests, (12) inducing plaintiffs to forgo objections to Rees’s lawsuit for
attorney fees, and (13) providing inaccurate legal advice. With respect to Germeraad and his law
firm, plaintiffs additionally complained that Germeraad (1) failed to tell plaintiffs that the legal
representation of Rees and Narmont “was rife with negligent conduct and failures to act and that
*** plaintiffs likely had a legal malpractice claim against both attorneys” and (2) filed litigation
on their behalf “which had virtually no chance of a favorable result *** and charged them $20,000
for the worthless suit.”
¶ 19 All defendants filed motions to dismiss plaintiffs’ complaint pursuant to section
2-619(a)(5) of the Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(5) (West 2020)), arguing
it was untimely filed. They maintained that section 13-214.3(b) of the Code (id. § 13-214.3(b))
required a legal malpractice action to “be commenced within [two] years from the time the person
bringing the action knew or reasonably should have known of the injury for which damages are
sought.” Defendants argued that, at the latest, the two-year limitations period began to run on
December 20, 2018, when the trial court entered summary judgment in State Bank’s favor in the
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fraudulent transfer case.
¶ 20 In connection with their motions to dismiss, defendants attached exhibits consisting
of (1) the trial court’s December 20, 2018, summary judgment order in the fraudulent transfer case
and (2) an unopposed motion to vacate judgment orders and dismiss the fraudulent transfer case.
The summary judgment order showed that at the time the order was entered, LCF and the Trust
were represented by attorney Williams. In its order, the court found no genuine issue of material
fact existed with respect to State Bank’s claims that (1) LCF’s transfer of property to the Trust
“was made with actual intent to hinder, delay and defraud” State Bank as a creditor of LCF and
(2) the transfer was made for less than adequate consideration and rendered LCF insolvent. The
court declared the December 2014 transfer of property from LCF to the Trust “void and of no legal
effect.” It also authorized State Bank to foreclose judgment liens against the property at issue, and
enjoined LCF and the Trust from encumbering or otherwise transferring the property.
¶ 21 The unopposed motion to vacate judgment orders and to dismiss was filed in the
fraudulent transfer case on May 14, 2019. The motion stated that the same day the trial court
entered its summary judgment order (December 20, 2018), the parties had entered into a settlement
agreement, which provided for LCF and the Trust to make a settlement payment to State Bank.
The agreement further provided that upon receipt of the settlement payment, State Bank agreed to
file a motion to vacate the summary judgment order and dismiss the litigation with prejudice.
According to the motion, the settlement payment was received by State Bank on May 10, 2019,
and, thus, it was requesting an order vacating the December 20, 2018, summary judgment order
and dismissing the fraudulent transfer case with prejudice.
¶ 22 Defendants maintained the summary judgment order and motion to vacate
established that plaintiffs knew on December 20, 2018, that they had suffered an injury. In
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particular, they were aware that LCF’s transfer of property to the Trust had been declared
fraudulent and void and that the fraudulent transfer case was concluding unfavorably for them.
Defendants asserted plaintiffs’ legal malpractice complaint, filed more than two years later on
December 28, 2020, was untimely and barred by the limitations period set forth in section
13-214.3(b) of the Code.
¶ 23 In responding to defendants’ motions to dismiss, plaintiffs maintained their
complaint was timely because it was filed within two years of when (1) the fraudulent transfer case
concluded in May 2019 or (2) they learned in May 2020, during Ray’s investigation of whether
action could be taken against State Bank, that “defendants had been negligent in their legal
representation.” Plaintiffs alleged that, until May 2020, they were under the reasonable belief that
only State Bank “was the culprit in the adverse litigation results.” Plaintiffs further asserted that
when the statute of limitations began to run was a question of fact, which precluded the trial court
from summarily dismissing their complaint.
¶ 24 Alternatively, plaintiffs argued the trial court should bar defendants from raising a
statute of limitations defense under the doctrines of equitable estoppel and fraudulent concealment.
They asserted any delay with respect to the filing of their legal malpractice complaint was due to
being misled by defendants. In particular, plaintiffs argued a long-term relationship existed
between them and defendants, defendants provided constant false assurances that progress was
being made in the litigation with State Bank, defendants failed to disclose material facts to them,
and defendants misrepresented that State Bank “was at fault” for the damages they suffered.
¶ 25 In support of their claims, plaintiffs submitted Ray’s 21-page affidavit, which
contained many of the same facts as alleged in their complaint. Ray additionally maintained that
because of his family’s 35-to-40-year relationship with attorneys Rees and Narmont, he trusted
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them and relied on them to protect plaintiffs’ interests. Ray asserted he did not make a “greater
inquiry” into the adverse results of the litigation with State Bank, i.e., State Bank obtaining
confessions of judgment and foreclosing on LCF’s properties, because he knew “LCF was
delinquent on some of the loans” and thought State Bank “had the right to do what it did.” He
maintained all defendant attorneys failed to advise him about defenses to State Bank’s actions and
that Germeraad never informed him that Rees and Narmont had been negligent. Ray asserted that
he received assurances from all three attorneys that an agreement could be reached with State Bank
such that the foreclosed properties would remain with his family. He averred that he did not realize
until March 2020 “that it was not only [State Bank] who had wronged [him and his] family, but
that [his] attorneys were professional[ly] negligent.”
¶ 26 In March 2022, the trial court conducted a hearing on defendants’ motions to
dismiss and took the matter under advisement. In October 2022, the court made a docket entry,
granting defendants’ motions and stating as follows:
“All defendants have filed requests pursuant to [section] 2-619 [of the Code], to
dismiss Plaintiffs’ claims as untimely. There is a two-year statute of limitations and
the discovery rule applies. It is clear from the record, viewed in the light most
favorable to Plaintiffs, that Plaintiffs knew or reasonably should have known of
their injury and that it was wrongfully caused on or before [December 20, 2018].
The complaint, filed [December 28, 2020], was filed outside the statute of
limitations.”
In December 2022, the court’s written order, dismissing plaintiffs’ complaint with prejudice, was
filed.
¶ 27 In January 2023, plaintiffs filed a motion to reconsider the trial court’s grant of
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defendants’ motions to dismiss, arguing the court erred because a question of fact existed “as to
whether a reasonable person would have known their harm was caused by attorney negligence
within two years of the filing of the *** complaint.” In April 2023, the court denied plaintiffs’
motion, stating as follows:
“Plaintiffs contend that a reasonable finder of fact could conclude that the statute
of limitations did not begin to run until March 2020 when a fifth attorney apprised
Plaintiffs of the alleged malpractice. According to Plaintiffs, until this time,
Plaintiffs as lay persons had no reasonable basis to believe anyone other than [State]
Bank had treated them unfairly. This argument ignores two undisputed facts (1) that
the Court, in its [summary judgment] order entered in the Fraudulent Transfer Case
[o]n December 20, 2018, ruled in favor of [State] Bank and (2) that same day,
Plaintiffs entered into a monetary settlement agreement with [State] Bank, relating
to the [summary judgment] order. Therefore, by December 20, 2018, Plaintiffs were
aware that the Fraudulent Transfer Case would be resolved either by Plaintiffs
making the monetary settlement payment or by foreclosure of the properties. As of
that date, Plaintiffs possessed sufficient information concerning their injury and its
cause to put a reasonable person on inquiry to determine if actionable conduct
existed, which triggered the statute of limitations.”
¶ 28 This appeal followed.
¶ 29 II. ANALYSIS
¶ 30 On appeal, plaintiffs challenge the trial court’s dismissal of their complaint on
statute of limitations grounds, arguing the court erred in finding that the two-year statute of
limitations began to run on December 20, 2018. Plaintiffs contend their complaint and Ray’s
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unrebutted affidavit establish that (1) their legal malpractice action was timely because it was filed
within two years of the May 2019 dismissal of the fraudulent transfer case or (2) the question of
when the statute of limitations began to run could not be determined as a matter of law because
questions of fact existed with respect to that issue or because multiple conclusions could be drawn
from the undisputed facts. Alternatively, plaintiffs argue that the court erred in failing to find that
the doctrines of equitable estoppel and fraudulent concealment prevented defendants from raising
a statute of limitations defense.
¶ 31 A. Standard of Review
¶ 32 “The purpose of a section 2-619 motion to dismiss is to dispose of issues of law
and easily proved issues of fact at the outset of litigation.” (Internal quotation marks omitted.)
Strauss v. City of Chicago, 2022 IL 127149, ¶ 54, 215 N.E.3d 87. Section 2-619(a)(5) of the Code
provides for the involuntary dismissal of an action when it “was not commenced within the time
limited by law.” 735 ILCS 5/2-619(a)(5) (West 2020).
¶ 33 “When deciding a motion based on section 2-619 of the Code, a court accepts all
well-pleaded facts in the complaint as true and will grant the motion when it appears that no set of
facts can be proved that would allow the plaintiff to recover.” Lawler v. University of Chicago
Medical Center, 2017 IL 120745, ¶ 11, 104 N.E.3d 1090. Pleadings and supporting documents
should be construed “in the light most favorable to the nonmoving party.” Dawkins v. Fitness
International, LLC, 2022 IL 127561, ¶ 24, 210 N.E.3d 1184. An order granting a section 2-619
motion to dismiss is subject to de novo review. Lawler, 2017 IL 120745, ¶ 11.
¶ 34 B. Statute of Limitations and the Discovery Rule
¶ 35 The statute of limitations for legal malpractice claims is set forth in section
13-214.3(b) of the Code, which provides as follows:
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“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 ***
must be commenced within [two] 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 2020).
The plain language of section 13-214.3(b) “incorporates the ‘discovery rule,’ which serves to toll
the limitations period to the time when the plaintiff knows or reasonably should know of his or her
injury.” Snyder v. Heidelberger, 2011 IL 111052, ¶ 10, 953 N.E.2d 415.
¶ 36 “Under the discovery rule a limitations period begins to run only when the plaintiff
knows or reasonably should know of his injury and also knows or reasonably should know that it
was wrongfully caused.” (Internal quotation marks omitted.) Morris v. Margulis, 197 Ill. 2d 28,
35-36, 754 N.E.2d 314, 318 (2001). “Significantly, actual knowledge of the alleged malpractice is
not a necessary condition to trigger the running of the statute of limitations.” Carlson v. Fish, 2015
IL App (1st) 140526, ¶ 23, 31 N.E.3d 404. Also, having knowledge that an injury was wrongfully
caused does not mean having knowledge of a specific defendant’s negligent conduct or the
existence of a cause of action. Katz v. Hartz, 2021 IL App (1st) 200331, ¶ 27, 195 N.E.3d 730.
¶ 37 Rather, “[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,
2015 IL App (1st) 140526, ¶ 23. When an injured party possesses the requisite information, the
burden is on that “party to inquire further as to the existence of a cause of action.” Scheinblum v.
Schain Banks Kenny & Schwartz, Ltd., 2021 IL App (1st) 200798, ¶ 25, 200 N.E.3d 818.
¶ 38 Further, “[t]he ‘injury’ in a legal malpractice claim is not a personal injury or the
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attorney’s negligent act.” Suburban Real Estate Services, Inc. v. Carlson, 2022 IL 126935, ¶ 17,
193 N.E.3d 1187. “Rather, it is a pecuniary injury to an intangible property interest caused by the
lawyer’s negligent act or omission.” (Internal quotation marks omitted.) Id. “Thus, in a legal
malpractice action, a client is not considered ‘injured’ unless and until he has suffered a loss for
which monetary damages may be sought.” Id. “If the damages are as yet ‘speculative,’ then the
cause of action has not yet accrued, and the malpractice suit is premature.” Zweig v. Miller, 2020
IL App (1st) 191409, ¶ 30, 182 N.E.3d 159. However, “[d]amages are speculative only if their
existence is uncertain, not if the amount is uncertain or yet to be fully determined.” Id.¶ 39 “Normally, the discovery date will be a question of fact.” Morris, 197 Ill. 2d at 36.
However, “ ‘[w]here it is apparent from the undisputed facts *** that only one conclusion can be
drawn, the question becomes one for the court.’ ” Id. (quoting Witherell v. Weimer, 85 Ill. 2d 146,
156, 421 N.E.2d 869, 874 (1981)).
¶ 40 Here, we find the pertinent facts are undisputed and lead to only a single
conclusion—that no later than December 20, 2018, plaintiffs knew or reasonably should have
known that they were injured, and their injury was wrongfully caused. In their complaint, plaintiffs
alleged defendants were negligent in representing them in connection with their dealings with State
Bank and the resulting litigation. However, by December 20, 2018, all such litigation had
effectively concluded with (1) the entry of summary judgment in State Bank’s favor in the
fraudulent transfer case and (2) the settlement agreement with State Bank. Prior to that date, State
Bank had obtained confessions of judgment against LCF relative to the five loans it had extended.
It also obtained judgments of foreclosure with respect to the properties that were used as security
for the loans.
¶ 41 The trial court’s summary judgment order in the fraudulent transfer case explicitly
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found no genuine issue of material fact existed with respect to State Bank’s claim that LCF’s
transfer of property to the Trust “was made with actual intent to hinder, delay and defraud” State
Bank as a creditor of LCF. It declared the December 2014 transfer of property from LCF to the
Trust “void and of no legal effect.” The court’s order also authorized State Bank to foreclose
judgment liens against the transferred property. The settlement agreement between LCF, the Trust,
and State Bank—entered into the same day as the summary judgment order—provided for LCF
and the Trust to make a settlement payment to State Bank. Upon receipt of the settlement payment,
State Bank agreed to file a motion to vacate the summary judgment order and dismiss the litigation
with prejudice.
¶ 42 Accordingly, as the trial court found below, by December 20, 2018, plaintiffs were
aware that LCF’s transfer of property to the Trust, actions allegedly taken on the advice and with
the assistance of attorneys Rees and Narmont, were deemed fraudulent. They also knew that
resolution of the fraudulent transfer case required either (1) a settlement payment to State Bank
pursuant to the settlement agreement or (2) foreclosure of the properties that were the subject of
the fraudulent transfer litigation. Based on these circumstances, plaintiffs had sufficient
information on December 20, 2018, of both an injury and its cause to require further investigation
into whether there was actionable conduct. As a result, their complaint filed more than two years
later on December 28, 2020, did not fall within the limitations period prescribed by section
13-214.3(b).
¶ 43 Plaintiffs argue, however, that their legal malpractice complaint was timely because
it was filed within two years of May 2019, when the trial court dismissed the fraudulent transfer
case pursuant to State Bank’s unopposed motion to vacate. They contend May 2019 was when the
fraudulent transfer case concluded, not December 20, 2018, and cite case authority for the
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proposition that “ ‘a cause of action for legal malpractice will rarely accrue prior to the entry of an
adverse judgment, settlement, or dismissal of the underlying action in which plaintiff has become
entangled due to the purportedly negligent advice of his attorney.’ ” Warnock v. Karm Winand &
Patterson, 376 Ill. App. 3d 364, 369, 876 N.E.2d 8, 13 (2007) (quoting Lucey v. Law Offices of
Pretzel & Stouffer, Chartered, 301 Ill. App. 3d 349, 356, 703 N.E.2d 473, 479 (1998)). They also
argue that the summary judgment order could not have put them on notice of an injury or its cause
because it later became “a nullity” after it was vacated following State Bank’s unopposed motion
to vacate.
¶ 44 Clearly, however, it was on December 20, 2018, that plaintiffs received an adverse
judgment in the fraudulent transfer case and entered into the settlement agreement. State Bank’s
later filing in May 2019 of the unopposed motion to vacate was a function of the settlement
agreement and did not alter the fact that the litigation was resolved in State Bank’s favor. It was
on December 20, 2018, when both the summary judgment order and the settlement agreement were
entered, that plaintiffs had sufficient information regarding their injury and its cause to require
them to investigate further.
¶ 45 Additionally, we find no support in the record for plaintiffs’ suggestion on appeal
that they may have been unaware of what occurred in the fraudulent transfer case on December
20, 2018. The record shows that, at that time, LCF and the Trust were represented in the fraudulent
transfer case by attorney Williams, who is not a defendant in the present litigation. Moreover,
plaintiffs’ complaint contains no allegation that Williams failed to communicate any information
to plaintiffs, or that plaintiffs were unaware of how the fraudulent transfer case was being resolved.
Ray similarly made no such claims in his affidavit and, in fact, acknowledged discussing the
settlement agreement with Williams.
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¶ 46 Plaintiffs also argue on appeal that the record supports a finding that they did not
have sufficient information about their injury or its cause until March 2020, when Ray was
informed by another attorney that defendants had potentially been negligent. They contend that as
laypersons, they were “presumptively uninformed as to what constitutes malpractice.” Certainly,
the allegations of the complaint and Ray’s affidavit support a finding that plaintiffs had actual
knowledge of defendants’ alleged malpractice in March 2020 after consulting with a new attorney.
However, as noted above, “actual knowledge of the alleged malpractice is not a necessary
condition to trigger the running of the statute of limitations.” Carlson, 2015 IL App (1st) 140526,
¶ 23. Additionally, knowledge that an injury was wrongfully caused does not mean knowledge of
a specific defendant’s negligent conduct or the existence of a cause of action. Katz, 2021 IL App
(1st) 200331, ¶ 27.
¶ 47 In this instance, the record reflects plaintiffs had concerns about attorneys Rees and
Narmont well before the fraudulent transfer case concluded. Ray’s affidavit shows that although
Rees and Narmont were purportedly representing plaintiffs’ interests in the foreclosure action with
State Bank, Ray did not learn that the properties at issue in the case were sold until weeks after the
sale dates. Significantly, his knowledge of the sales came from outside sources rather than from
defendant attorneys. Ray represented he was “very concerned,” spoke with all three defendant
attorneys, and was assured that “negotiations with [State] Bank were still progressing” and an
agreement with the bank “would be worked out” so that the sold properties could remain with
Ray’s family. However, the allegations in plaintiffs’ complaint indicate that by late 2016, Rees
was allowed to withdraw from the fraudulent transfer case and Ray hired attorney Williams “in an
attempt to mitigate the damages caused by Rees and Narmont.” Plaintiffs’ allegation suggests their
awareness in 2016 that they suffered harm because of Rees’s and Narmont’s actions. Additionally,
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as discussed, on December 20, 2018, the fraudulent transfer case was resolved in State Bank’s
favor based upon a finding that the transfer of property from LCF to the Trust, action plaintiffs
allegedly took on the advice of Rees and Narmont, was fraudulent. Additionally, the trial court’s
summary judgment order authorized State Bank to foreclose judgment liens against additional
properties owned by plaintiffs. Accordingly, while plaintiffs may not have had actual notice of the
alleged malpractice until March 2020, ample evidence supported the court’s finding below that by
at least December 20, 2018, they possessed sufficient information about both an injury they
sustained and its cause to reasonably require them to inquire further into whether actionable
conduct was involved.
¶ 48 Under the circumstances presented, we find no error in the trial court determining,
as a matter of law, that the statute of limitations began to run on December 20, 2018. Plaintiffs’
legal malpractice complaint, filed over two years later on December 28, 2020, was untimely and,
thus, properly subject to dismissal on statute of limitations grounds.
¶ 49 C. Equitable Estoppel and Fraudulent Concealment
¶ 50 On appeal, plaintiffs also contend that under theories of equitable estoppel and
fraudulent concealment, defendants should have been barred from asserting a statute of limitations
defense. Specifically, they contend any delay in their discovery of defendants’ wrongful conduct
was due to “the lack of material advice” given to them by defendants. Plaintiffs complain that
because they “were not told about remedies and defense[s] to the actions of [State] Bank, were
told settlement with [State] Bank was the only viable option, and not told about the negligent
conduct of the other attorneys, [they] lacked sufficient information not only to resolve their
disputes with [State] Bank but to realize *** defendant attorneys also cause[d] them wrongful
injury.”
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¶ 51 For either the doctrine of equitable estoppel or fraudulent concealment to apply, “a
party must generally show that the defendant said or did something to lull or induce plaintiff to
delay the filing of his claim until after the limitations period has run.” (Internal quotation marks
omitted.) Carlson v. Michael Best & Friedrich LLP, 2021 IL App (1st) 191961, ¶ 56, 186 N.E.3d
478. To establish estoppel, the party claiming estoppel must demonstrate the following:
“ ‘(1) the other person misrepresented or concealed material facts; (2) the other
person knew at the time he or she made the representations that they were untrue;
(3) the party claiming estoppel did not know that the representations were untrue
when they were made and when that party decided to act, or not, upon the
representations; (4) the other person intended or reasonably expected that the party
claiming estoppel would determine whether to act, or not, based upon the
representations; (5) the party claiming estoppel reasonably relied upon the
representations in good faith to his or her detriment; and (6) the party claiming
estoppel would be prejudiced by his or her reliance on the representations if the
other person is permitted to deny the truth thereof.’ ” Orlak v. Loyola University
Health System, 228 Ill. 2d 1, 21-22, 885 N.E.2d 999, 1011 (2007) (quoting DeLuna
v. Burciaga, 223 Ill.2d 49, 82-83, 857 N.E.2d 229, 249 (2006)).
“It is not necessary that the defendant intentionally mislead or deceive the plaintiff.” Id. at 22. “All
that is required is that the plaintiff reasonably relied on the defendant’s conduct or representations
in delaying suit.” Id.
¶ 52 “To claim the benefit of equitable estoppel, a plaintiff must have had no knowledge
or means of knowing the true facts within the applicable limitations period.” Doe v. Hastert, 2019
IL App (2d) 180250, ¶ 40, 133 N.E.3d 1249. Additionally, “it is well-established that the basis of
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a legal malpractice action also cannot constitute the grounds for equitable estoppel; there must be
some misrepresentation by the defendant that the plaintiff relied on to his or her detriment to
prevent the filing of a legal malpractice action.” Brummel v. Grossman, 2018 IL App (1st) 162540,
¶ 38, 103 N.E.3d 398.
¶ 53 “Under the fraudulent concealment doctrine, the statute of limitations will be tolled
if a plaintiff pleads and proves that fraud prevented discovery of a cause of action.” Id. ¶ 37. With
respect to the fraudulent concealment of an action, section 13-215 of the Code states as follows:
“If a person liable to an action fraudulently conceals the cause of such action from
the knowledge of the person entitled thereto, the action may be commenced at any
time within [five] years after the person entitled to bring the same discovers that he
or she has such cause of action, and not afterwards.” 735 ILCS 5/13-215 (West
2020).
¶ 54 “A plaintiff seeking to avail itself of this provision to toll the statute of limitations
must show that the defendant engaged in affirmative acts or representations designed to prevent
discovery of the cause of action or to induce the plaintiff into delaying the filing of its claim.” J.S.
Reimer, Inc. v. Village of Orland Hills, 2013 IL App (1st) 120106, ¶ 51, 990 N.E.2d 831. Silence
may also amount to fraudulent concealment when “a fiduciary, trust, or other confidential
relationship exists between the plaintiff and the defendant.” Doe No. 2 v. Boy Scouts of America,
2016 IL App (1st) 152406, ¶ 82, 66 N.E. 2d 433. In particular, “a fiduciary who is silent, and thus
fails to fulfill his duty to disclose material facts concerning the existence of a cause of action, has
fraudulently concealed that action, even without affirmative acts or representations.” (Emphasis
omitted.) DeLuna, 223 Ill. 2d at 77.
¶ 55 Here, in arguing that equitable estoppel and the fraudulent concealment statute
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should apply, plaintiffs rely on the same factual circumstances that form the basis of their legal
malpractice claims. In particular, they complain that defendants failed to tell them about remedies
and defenses to the litigation involving State Bank, represented that settlement with State Bank
was the only viable option, and did not tell them about the negligent conduct of the other attorneys.
However, plaintiffs were injured on December 20, 2018, when an adverse judgment was entered
against them in the fraudulent transfer case, and they settled with State Bank. Plaintiffs do not
identify anything that prohibited their discovery of such circumstances, nor do they otherwise
identify any misrepresentation by defendants that prevented them from filing their malpractice
action within two years after that discovery date. Neither equitable estoppel nor section 13-215 of
the Code apply under such circumstances.
¶ 56 Moreover, equitable estoppel also does not apply where “the ‘lulling’ period
induced by a defendant ends with ample time remaining before the expiration of the statute of
limitations.” Moore v. A.H. Robins Co., Inc., 167 Ill. App. 3d 19, 25, 520 N.E.2d 1007, 1011-12
(1988). Similarly, section 13-215 of the Code does not apply “where the claimant discovers the
fraudulent concealment, or should have discovered it through ordinary diligence, and a reasonable
time remains within the remaining limitations period.” (Internal quotation marks omitted.) J.S.
Reimer, 2013 IL App (1st) 120106, ¶ 51.
¶ 57 In this instance, plaintiffs assert that in March 2020, when consulting with an
attorney, they obtained actual knowledge of their cause of action resulting from defendants’
alleged negligence and effectively discovered the fraudulent concealment of their legal malpractice
claims. At that point, approximately nine months remained of the two-year limitations period
which began on December 20, 2018. We find nine months provided plaintiffs with ample time
within which to file their legal malpractice complaint, and, on appeal, plaintiffs do not suggest
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otherwise. Under such circumstances, plaintiffs may not rely on either equitable estoppel or section
13-215 of the Code. See County Line Nurseries & Landscaping, Inc. v. Kenney, 2020 IL App (1st)
200615, ¶ 28, 179 N.E.3d 930 (finding the fraudulent concealment statute did not apply where,
despite an attorney’s alleged concealments, the plaintiffs gained sufficient knowledge of an injury
caused by the attorney’s malpractice and had ample time to file a complaint within the two-year
limitations period); Smith v. Cook County Hospital, 164 Ill. App. 3d 857, 864, 518 N.E.2d 336,
341 (1987) (“Six months was a reasonable time within which [the plaintiff] could have filed his
complaint after the alleged fraud was discovered.”).
¶ 58 Here, as stated, the trial court committed no error in finding plaintiffs’ legal
malpractice complaint was untimely filed. We also find the court committed no error in failing to
apply the doctrines of equitable estoppel or fraudulent concealment to bar defendants’ statute of
limitations defense. Finally, for all the reasons expressed, the court did not err in denying plaintiffs’
motion to reconsider its dismissal of their complaint.
¶ 59 III. CONCLUSION
¶ 60 For the reasons stated, we affirm the trial court’s judgment.
¶ 61 Affirmed.
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