Carlson v. Michael Best & Friedrich LLP ( 2021 )

Digitally signed
by Reporter of
Decisions
Reason: I attest to
Illinois Official Reports the accuracy and
integrity of this
document
Appellate Court Date: 2022.04.22
13:09:43 -05'00'
Carlson v. Michael Best & Friedrich LLP, 2021 IL App (1st) 191961Appellate Court WILLIAM CARLSON and WILLIS CAPITAL LLC, Plaintiffs-
Caption Appellants, v. MICHAEL BEST & FRIEDRICH LLP, THOMAS
CRONIN, AARON L. DAVIS, LELAND W. HUTCHINSON JR.,
DANIEL J. KELLEY, and CRONIN & COMPANY LTD.,
Defendants (MICHAEL BEST & FRIEDRICH LLP, Defendant-
Appellee).
District & No. First District, Fourth Division
No. 1-19-1961
Filed July 15, 2021
Rehearing denied August 26, 2021
Decision Under Appeal from the Circuit Court of Cook County, No. 16-L-00383; the
Review Hon. Daniel J. Kubasiak, Judge, presiding.
Judgment Affirmed.
Counsel on Joseph T. Gentleman, of Chicago, for appellants.
Appeal
Michael L. Shakman, Zachary J. Freeman, and William J. Katt, of
Miller Shakman Levine & Feldman LLP, of Chicago, for appellee.
Panel JUSTICE MARTIN delivered the judgment of the court, with opinion.
Presiding Justice Gordon and Justice Reyes concurred in the judgment
and opinion.
OPINION
¶1 I. BACKGROUND
¶2 The following background facts and procedural history are taken from the common law
record, the parties’ briefs, and the related opinions of Carlson v. Fish, 2015 IL App (1st)
140526, and Willis Capital LLC v. Belvedere Trading LLC, 2015 IL App (1st) 132183. 1
¶3 In 2002, William Carlson, the sole owner and member of Willis Capital LLC (Willis)
founded Belvedere Trading, LLC (Belvedere), with an initial investment of $405,000. 2
Belvedere was created to trade S&P 500 equity index options. Thomas Hutchinson and Owen
O’Neill eventually joined Belvedere as partners, with Hutchinson investing $85,000 and
O’Neill investing $160,000. Willis Capital LLC, 2015 IL App (1st) 132183, ¶ 5. “Carlson was
the sole managing member and held about a 62% membership interest; O’Neill held about a
25% interest and Hutchinson held the remaining 13% interest.” Carlson, 2015 IL App (1st)
140526, ¶ 6. However, by 2004, O’Neill and Hutchinson were managing members and owned
an equal 33.3% interest along with Carlson. Id.¶4 In 2005, Carlson took a leave of absence from actively managing Belvedere due to health
reasons. When Carlson returned to the company in 2006, “he had a falling out with O’Neill
and Hutchinson over numerous issues, including profit distribution and management.” Id. ¶ 7.
¶5 In March 2007, Carlson retained attorneys Shawn M. Collins and David J. Fish of the
Collins Law Firm, P.C., to represent him in his dispute with O’Neill and Hutchinson. Fish later
formed the Fish Law Firm while continuing to represent Carlson; the two law firms will
collectively be referred to as “Collins.” Id.
¶6 In May 2007, Collins filed a request for arbitration on Carlson’s behalf with the Chicago
Board of Options Exchange (CBOE), as provided for in Belvedere’s operating agreement. Id.;
Willis Capital LLC, 2015 IL App (1st) 132183, ¶ 6. Collins also filed a complaint for injunctive
relief in the circuit court of Cook County in October 2007, seeking to dissolve Belvedere and
compel it to buy Carlson’s interest in the company for fair value in accordance with section
35-60 of the Limited Liability Company Act (805 ILCS 180/35-60 (West 2006) (repealed by
Pub. Act 99-637 (eff. July 1, 2017))). Willis Capital LLC, 2015 IL App (1st) 132183, ¶ 6;
Carlson, 2015 IL App (1st) 140526, ¶ 7. During this time, Carlson asked O’Neill and
Hutchinson to obtain an appraisal of Belvedere, but they refused. Willis Capital LLC, 2015 IL
App (1st) 132183, ¶ 6. O’Neill and Hutchinson also denied Carlson’s request for access to
Belvedere’s books and records. The circuit court subsequently entered an order compelling
arbitration. Id.1
Carlson also sued the attorneys and law firms who represented him in these two cases. Those
claims are not part of this appeal.
2
For ease of reference, we will refer interchangeably to Willis Capital LLC as both Willis and
Carlson.
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¶7 In February 2008, the parties agreed to mediate their dispute. The parties “agreed that the
mediation would be principals only, would be nonbinding, and would be supervised by
mediator Douglas Gerrard.” Carlson, 2015 IL App (1st) 140526, ¶ 8. Prior to the mediation,
Carlson did not obtain an independent appraisal of his interest in Belvedere, but in an e-mail
to Collins, he estimated that, by the end of 2009, the company could be sold for $100 million.
Id. Unbeknownst to Carlson, prior to the mediation, O’Neill and Hutchinson employed the
accounting firm of Horwich, Coleman, and Levin (HCL) to conduct an appraisal of Belvedere
and determine a market value of Carlson’s one-third interest in the company. Willis Capital
LLC, 2015 IL App (1st) 132183, ¶ 8. HCL developed statistical models to estimate this value
and presented these models to O’Neill and Hutchinson. After receiving the statistical models,
O’Neill and Hutchinson directed HCL not to prepare a written report and to stop further work
on the appraisal. Id. None of this was disclosed to Carlson.
¶8 At the February mediation, Carlson again asked for an appraisal of Belvedere, but O’Neill
and Hutchinson responded that an appraisal was unnecessary because they did not want to sell
their interests in the company. Id. ¶ 9. The mediation resulted in Carlson agreeing to sell his
interest in Belvedere for $17.5 million.
¶9 After the mediation, but before he signed the proposed settlement agreement that would
memorialize the terms of the sale, Carlson met with his accountant, John Flaherty, to discuss
the tax consequences resulting from the settlement agreement. According to Carlson, Flaherty
stated in jest that Carlson did not get enough money out of the settlement because of the large
amount of taxes he would owe as a result of the settlement agreement. Nevertheless, Carlson
ultimately signed the settlement agreement. Carlson and his two former partners signed a term
sheet delineating the terms of the sale, which were memorialized in a settlement agreement
signed by the parties on March 4 and 6, 2008. Carlson, 2015 IL App (1st) 140526, ¶ 8.
¶ 10 The settlement agreement provided in part that it represented “a complete compromise of
the controversy between the parties involving disputed issues of law and fact, and that each
party fully assumes the risk that the facts or law may be other than they believe.” The
agreement also provided that the parties agree “that they are not fiduciaries to each other with
respect to the negotiations, preparation and execution of” the agreement. The agreement went
on to provide that the parties were advised by their respective attorneys and advisors as to the
merits of the agreement and that no party was relying on any promise, representation, or
disclosure of any other party. In addition, the agreement contained a fee-shifting provision that
provided that attorney fees and expenses could be awarded to a prevailing party in “an action
brought by any party to enforce the terms” of the agreement.
¶ 11 Beginning in September 2008, and continuing through November 2008, Carlson
exchanged e-mails with Shawn Collins concerning his belief that O’Neill and Hutchinson had
fraudulently tricked him into selling his interest in Belvedere for less than the company’s true
value. Id. ¶¶ 9-15. Carlson and Shawn Collins discussed the possibility of having the circuit
court set aside the settlement agreement and of Shawn Collins obtaining co-counsel in a
possible fraud action against Carlson’s former partners.
¶ 12 The record reveals that from November 2008 to the early part of December 2008, Carlson
consulted with Chris Parker, a college friend and an attorney at the law firm of Michael Best
& Friedrich, LLP (Michael Best). Carlson asked Parker to review the settlement agreement
and evaluate whether Carlson may have any viable fraud claims against his former partners.
Carlson also began to express dissatisfaction with the legal representation provided by Collins.
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¶ 13 On November 19, 2008, Carlson met with attorneys from the law firm of Drinker, Biddle
& Reath, LLP (Drinker), to review the settlement agreement. According to Carlson, attorneys
at Drinker raised questions about whether the legal services Collins rendered to him in
connection with the settlement agreement had been substandard. Id. ¶ 16. Carlson claimed this
was the first time he became aware of a possible legal malpractice claim against Collins. Id.
¶ 14 Carlson officially engaged Michael Best from August 18, 2010, through September 16,
2010, for consultation regarding a potential legal malpractice action against Collins. During
this time, Parker advised Carlson that a legal malpractice action against Collins “may be tough
in the face of the statute of limitations.” Parker told Carlson that the applicable statute of
limitations for a legal malpractice claim was two years from the date he should have learned
of the malpractice.
¶ 15 On November 11, 2010, Carlson engaged the law firm of Cronin & Co., Ltd (Cronin).
Carlson and counsel from Cronin eventually contacted HCL, the accounting firm which,
unbeknownst to Carlson, had conducted the pre-settlement appraisal of Belvedere at the
direction of O’Neill and Hutchinson. Willis Capital LLC, 2015 IL App (1st) 132183, ¶ 12.
¶ 16 Cronin filed a legal malpractice complaint against Collins on November 18, 2010. In the
complaint, Carlson alleged that Collins failed to obtain an appraisal of Belvedere and
“ ‘thereby permitted their clients to settle without any appropriate advice and counsel as to
what was being surrendered.’ ” Id. Cronin subsequently filed an amended legal malpractice
complaint against Collins on February 23, 2011. In March 2011, Collins moved to dismiss the
amended complaint on statute of limitations grounds.
¶ 17 On May 17, 2011, Cronin filed a request for arbitration on Carlson’s behalf with the CBOE
against Belvedere, O’Neill, and Hutchinson. Id. Carlson alleged that O’Neill and Hutchinson
were fiduciaries of Willis and had committed fraud by withholding information regarding
Belvedere’s value. O’Neill and Hutchinson filed a motion with the CBOE to dismiss the
arbitration.
¶ 18 Carlson and Collins subsequently entered into a tolling agreement on July 13, 2011, under
which Carlson voluntarily dismissed his amended legal malpractice complaint against Collins,
without prejudice. The tolling agreement provided in part that if the arbitration action “is
resolved on or after April 13, 2012, [Carlson] shall have a period of 90 days after resolution of
the arbitration to refile this action. If the arbitration is resolved before April 13, 2012, the one-
year refilling provision in 735 ILCS 5/2-1009 shall remain intact.” The tolling agreement
further provided in part that it “shall not act to revive any cause(s) of action already barred by
the statute of limitations when the legal malpractice complaint was filed on November 18,
2010.”
¶ 19 The CBOE arbitration panel granted O’Neill and Hutchinson’s motion to dismiss the
arbitration with prejudice on March 5, 2012. Id. On March 26, 2012, in the circuit court, Cronin
filed a section 2-1401 petition (735 ILCS 5/2-1401 (West 2012)), and an amended petition on
December 20, 2012, against Belvedere and Carlson’s former partners, seeking to “ ‘reopen’ ”
the settlement agreement. Willis Capital LLC, 2015 IL App (1st) 132183, ¶¶ 1, 13. O’Neill and
Hutchinson filed a motion to dismiss the amended petition pursuant to section 2-619.1 of Code
of Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2012)). They argued that the amended
petition should be dismissed because it was barred by the following: (1) the CBOE arbitration
panel’s order of March 5, 2012, dismissing the arbitration; (2) the two-year statute of
limitations applicable to section 2-1401 petitions; (3) the release contained in the settlement
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agreement; and (4) Illinois Supreme Court Rule 201(b)(3) (eff. July 1, 2014), which protects
the identity of consultants, their opinions, and work product from discovery, except under
“exceptional circumstances under which it is impracticable for the party seeking discovery to
obtain facts or opinions on the same subject matter by other means.” Willis Capital LLC, 2015
IL App (1st) 132183, ¶ 14.
¶ 20 On June 7, 2013, the circuit court dismissed Carlson’s amended section 2-1401 petition
with prejudice. Id. ¶ 15. The circuit court determined that the amended petition to reopen the
settlement agreement failed to state a claim for rescission of the agreement because the
amended petition did not allege sufficient facts showing that Carlson intended to return the
$17.5 million he received in the settlement. Id. The court further determined that the amended
petition failed to state a claim for fraudulent concealment due to the nonreliance clause in the
settlement agreement and that the mutual release clause contained in the agreement barred the
claims of fraud and breach of fiduciary duty. Id. The court also found that Carlson failed to
exercise due diligence in the 2007 litigation because he did not try to obtain an appraisal of
Belvedere prior to settling. The court further found that the amended petition to reopen the
settlement agreement was barred by the doctrine of res judicata and that Rule 201(b)(3)
protected HCL’s appraisal from disclosure as consultant work product. Id. On January 6, 2014,
the circuit court awarded $172,391.75 in attorney fees and costs to Belvedere, O’Neill, and
Hutchinson. Id. ¶ 16. Carlson appealed (Willis Capital LLC, 2015 IL App (1st) 132183).
¶ 21 While the Willis Capital LLC appeal was pending, Cronin refiled the legal malpractice
complaint against Collins on July 5, 2013. The complaint alleged that Collins breached its
professional duties to Carlson by (1) failing to obtain an independent appraisal of Belvedere’s
value prior to the mediation, (2) permitting him to attend the meditation without an attorney,
(3) advising him to sign the mediated settlement agreement without any changes, and
(4) failing to protect him from the fraudulent conduct of his former partners. Carlson, 2015 IL
App (1st) 140526, ¶ 17.
¶ 22 On August 28, 2013, Collins filed a motion to dismiss the legal malpractice complaint
pursuant to section 2-619(a)(5) of the Code (735 ILCS 5/2-619(a)(5) (West 2012)). Collins
asserted that Carlson’s complaint was time-barred by the two-year statute of limitations
governing claims for legal malpractice (id. § 13-214.3(b)). Carlson, 2015 IL App (1st) 140526,
¶ 18.
¶ 23 Following a hearing on January 15, 2014, the circuit court granted Collins’s motion to
dismiss the legal malpractice complaint with prejudice. The circuit court determined that the
cause of action accrued at the time Carlson knew he had been injured, which the court found
was no later than September 2008. The court found that by November 12 or 13 of 2008, Carlson
had identified his former partners as the wrongful cause of his injury, which put him on inquiry
notice that a cause of action had accrued. The court concluded that because Carlson’s initial
legal malpractice complaint was filed on November 18, 2010, more than two years after his
cause of action accrued, the complaint was time-barred by the two-year statute of limitations
set forth in section 13-214.3(b) of the Code. Carlson appealed (Carlson, 2015 IL App (1st)
140526).
¶ 24 On February 27, 2014, Carlson entered into a second engagement with Michael Best.
Carlson engaged Michael Best to act as a consultant in connection with pending litigation, i.e.,
the Willis Capital LLC appeal and the Carlson appeal.
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¶ 25 On appeal in Willis Capital LLC, this court affirmed in part and reversed in part. Willis
Capital LLC, 2015 IL App (1st) 132183, ¶¶ 26-27. We affirmed the circuit court’s judgment
with respect to its decision to dismiss Carlson’s amended section 2-1401 petition to reopen the
settlement agreement without holding an evidentiary hearing. We determined that even if
O’Neill and Hutchinson owed Carlson a fiduciary duty and fraudulently concealed the results
of the appraisal from him, this did not relieve Carlson of his duty to exercise due diligence in
discovering the appraisal value of his interest in Belvedere prior to the settlement. Id. ¶¶ 20-
23. However, we reversed the circuit court’s judgment with respect to the award of attorney
fees and costs. We pointed out that fee-shifting provisions are strictly construed and
determined that the contractual language of the fee-shifting provision contained in the
settlement agreement was intended to award attorney fees and costs to prevailing parties who
sought to enforce the terms of the agreement, as opposed to parties, such as O’Neill and
Hutchinson, who sought to defend the terms of the agreement in response to a section 2-1401
petition to invalidate the agreement. Id. ¶¶ 24-25.
¶ 26 On appeal in Carlson, this court affirmed the circuit court’s decision granting Collins’s
section 2-619(a)(5) motion to dismiss Carlson’s legal malpractice complaint as time-barred by
the two-year statute of limitations set forth in section 13-214.3(b) of the Code. Carlson, 2015
IL App (1st) 140526, ¶¶ 23, 48-49. We found that e-mail correspondence between Carlson and
Collins, which began in September 2008 and continued through November 2008, along with
certain judicial admissions made by Carlson, showed that he was aware he had been wrongfully
injured by his former partners no later than November 13, 2008, and probably as early as
September 2008. Id. ¶¶ 28-33.
¶ 27 Carlson’s second engagement with Michael Best, which began on February 27, 2014,
subsequently ended in May 2015, when he decided not to file a petition for leave to appeal the
appellate court decision in Carlson to the Illinois Supreme Court.
¶ 28 On January 13, 2016, Carlson filed the legal malpractice complaint at issue here in the
circuit court of Cook County against Michael Best, Cronin, and several of the law firms’
respective attorneys. 3 An amended complaint was filed on August 31, 2016. In count I of the
amended complaint, which is the only count directed at Michael Best, Carlson alleged that
Michael Best breached the standard of care applicable to attorneys representing clients in legal
malpractice matters by failing to advise him of the following: (1) when the statute of limitations
would expire on his malpractice claims against Collins, (2) that he had a malpractice claim
against Drinker, and (3) that he had a malpractice claim against Michael Best. Carlson alleged
that, but for Michael Best’s negligent advice, he would have filed timely legal malpractice
claims against both Collins and Drinker.
¶ 29 Michael Best filed a motion for summary judgment on July 20, 2018. In the motion,
Michael Best asserted that the following undisputed facts required judgment in its favor as a
matter of law: (1) “Carlson cannot prove that Michael Best caused him any damages because
his claims against the Collins Law Firm were time-barred when he first engaged Michael Best
in August 2010,” (2) “Carlson cannot sue Michael Best for the loss of his malpractice claim
against the Drinker Law Firm because those claims were viable when he engaged successor
counsel, the Cronin Law Firm, in November 2010,” and (3) “Carlson cannot sue Michael Best
3
This appeal only concerns Michael Best and its attorneys.
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for failing to inform him of a claim against it. There is no duty for a law firm to inform a client
that he has a claim against it.”
¶ 30 Michael Best also filed a motion to stay further discovery pending a ruling on the motion
for summary judgment. Carlson, in turn, filed a motion requesting the court to allow him to
conduct further discovery before responding to the motion for summary judgment. The circuit
court subsequently granted Michael Best’s motion for the stay and denied Carlson’s motion to
conduct further discovery.
¶ 31 On October 30, 2018, Carlson filed a motion for leave to file a second amended complaint
instanter, which the circuit court denied. On that same date, Carlson filed his response to
Michael Best’s motion for summary judgment along with a renewed motion for leave to file a
second amended complaint.
¶ 32 On December 14, 2018, the circuit court entered an opinion and order partially granting
and partially denying Michael Best’s motion for summary judgment. The circuit court granted
summary judgment in favor of Michael Best, finding that there was no triable issue of fact as
to whether Michael Best failed to advise Carlson as to any legal malpractice claims he may
have had against Michael Best. However, the court determined that there were certain issues
of fact which could not be resolved on summary judgment, namely: (1) whether Carlson’s legal
malpractice claims against Collins were already untimely at the time he first retained Michael
Best on August 18, 2010, (2) whether Michael Best failed to timely advise Carlson that he may
have a legal malpractice claim against Drinker, and (3) whether Carlson was aware of Collins’s
legal malpractice before the February 2008 settlement. In addition, the circuit court again
denied Carlson leave to file a second amended complaint. The circuit court determined that the
claims in the proposed second amended complaint concerned claims of legal malpractice
against Michael Best that allegedly occurred in 2008, which extended beyond the six-year
statute of repose for legal malpractice claims.
¶ 33 Michael Best filed a motion to reconsider the partial denial of its motion for summary
judgment. On May 3, 2019, the circuit court reconsidered the matter and entered summary
judgment on Carlson’s remaining claims in favor of Michael Best. The circuit court analyzed
section 13-214.3 of the Code, which contains a two-year statute of limitations and six-year
statute of repose for malpractice actions against attorneys (735 ILCS 5/13-214.3(b), (c) (West
2014)), and determined that conversations between Carlson and his accountant John Flaherty
in June 2008 indicated that, by the time Carlson first retained Michael Best on August 18,
2010, he was already on inquiry notice of the facts underlying his legal malpractice claims
against Collins and therefore those claims expired before Carlson engaged Michael Best. The
circuit court further determined that Michael Best did not cause Carlson to lose any legal
malpractice claims against Drinker because those claims were still viable after Michael Best’s
representation of Carlson ended and after he engaged new counsel.
¶ 34 On May 7, 2019, the circuit court entered an order pursuant to Illinois Supreme Court Rule
304(a) (eff. Mar. 8, 2016), finding that there was no just reason to delay enforcement or appeal
from its orders of December 13, 2018, and May 3, 2019.
¶ 35 On June 4, 2019, Carlson filed a motion to reconsider the orders granting summary
judgment in favor of Michael Best. In the motion, Carlson asserted for the first time that
statements attributable to him suggesting that his accountant Flaherty told him that he had a
“real problem” with the settlement agreement because Carlson had “left $12 million on the
table” was either inaccurate or constituted inadmissible hearsay. Carlson subsequently filed an
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amended motion to reconsider based on purported newly discovered evidence that he allegedly
demonstrated that his conversations with his accountant, Flaherty, occurred prior to the
settlement agreement and that Flaherty denied telling him that he had a “real problem” with
the settlement agreement or that he “left $12 million on the table.”
¶ 36 On August 29, 2019, the circuit court entered an order denying Carlson’s motion to
reconsider and his amended motion to reconsider and allowed him 30 days from entry of the
order to file an appeal. Carlson filed a notice of appeal on September 25, 2019.
¶ 37 We have jurisdiction to hear this appeal pursuant to Rule 304(a), which provides that “an
appeal may be taken from a final judgment as to one or more but fewer than all of the parties
*** if the trial court has made an express written finding that there is no just reason for delaying
either enforcement or appeal or both.” Id. We will provide additional facts in the analysis
section where necessary to address specific issues raised on appeal.
¶ 38 II. ANALYSIS
¶ 39 A. Summary Judgment
¶ 40 Carlson appeals the circuit court’s order granting summary judgment in favor of defendant
Michael Best. “The purpose of summary judgment is to determine whether a genuine issue of
material fact exists that would require a trial.” Hodges v. St. Clair County, 263 Ill. App. 3d
490, 492 (1994). Summary judgment is appropriate where “the pleadings, depositions, and
admissions on file, together with the affidavits, if any, show that there is no genuine issue as
to any material fact and that the moving party is entitled to a judgment as a matter of law.” 735
ILC 5/2-1005(c) (West 2012). “In determining whether a genuine issue as to any material fact
exists, a court must construe the pleadings, depositions, admissions, and affidavits strictly
against the movant and liberally in favor of the opponent.” Gilbert v. Sycamore Municipal
Hospital, 156 Ill. 2d 511, 518 (1993). “A triable issue precluding summary judgment exists
where the material facts are disputed, or where, the material facts being undisputed, reasonable
persons might draw different inferences from the undisputed facts.” Adams v. Northern Illinois
Gas Co., 211 Ill. 2d 32, 43 (2004). Our review of a summary judgment order is de novo. Id.¶ 41 Carlson advances a number of arguments in support of his overall contention that the circuit
court erred in granting summary judgment in favor of Michael Best. We address each in turn.
¶ 42 1. Leave to File Second Amended Complaint
¶ 43 Carlson first argues that the circuit court erred in denying his motion for leave to file a
second amended complaint, arguing that the proposed second amended complaint added
additional facts and expanded upon the theories of liability. Michael Best responds that the
circuit court did not abuse its discretion because (1) the amendments in Carlson’s proposed
second amended complaint concern allegations of legal malpractice against Michael Best
occurring in 2008, which are time-barred under the statute of repose governing claims of
attorney malpractice and (2) Carlson fails to satisfy the four factors that courts consider in
determining whether leave to amend pleadings should be granted as set forth in Loyola
Academy v. S&S Roof Maintenance, Inc., 146 Ill. 2d 263, 273 (1992).
¶ 44 A circuit court has broad discretion in deciding whether to grant leave to amend a pleading
prior to entry of a final judgment, and its decision will not be disturbed absent an abuse of that
discretion. Abramson v. Marderosian, 2018 IL App (1st) 180081, ¶ 30. A circuit court abuses
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its discretion in denying leave to amend a pleading if granting leave to amend would further
the ends of justice. Insurance Benefit Group, Inc. v. Guarantee Trust Life Insurance Co., 2017
IL App (1st) 162808, ¶ 50.
¶ 45 In this case, the circuit court denied Carlson’s motion for leave to file a second amended
complaint based upon its finding that the proposed amendments concerned allegations of legal
malpractice against Michael Best occurring in 2008, which the court determined were time-
barred under the statute of repose governing claims of attorney malpractice.
¶ 46 a. Statute of Repose
¶ 47 Section 13-214.3 of the Code (735 ILCS 5/13-214.3(b), (c) (West 2014)) “sets forth two
independent timing requirements for legal malpractice actions: the two-year statute of
limitations in subsection (b) and the six-year statute of repose in subsection (c).” Sorenson v.
Law Offices of Theodore Poehlmann, 327 Ill. App. 3d 706, 708 (2002). Subsection (c) of the
statute provides that 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 may not
be commenced more than six years after the date on which the act or omission occurred. 735
ILCS 5/13-214.3(c) (West 2014).
¶ 48 “This court’s primary goal in construing a statute is to ascertain and give effect to the intent
of the legislature.” Evanston Insurance Co. v. Riseborough, 2014 IL 114271, ¶ 15. The most
reliable indicator of that intent is the statutory language itself, which must be given its plain
and ordinary meaning. Id. If the statutory language is clear and unambiguous, we will apply it
as written, without resorting to extrinsic aids of statutory construction, and will not depart from
the plain meaning of the statute by reading into it exceptions, limitations, or conditions that
conflict with the express intent. State Bank of Cherry v. CGB Enterprises, Inc., 2013 IL
113836, ¶ 56.
¶ 49 “In contrast to a statute of limitations, which determines the time within which a lawsuit
may be commenced after a cause of action has accrued, a statute of repose extinguishes the
action after a defined period of time, regardless of when the action accrued.” Evanston
Insurance, 2014 IL 114271, ¶ 16. The purpose of repose statutes is “to terminate the possibility
of liability after a defined period of time, regardless of a potential plaintiff’s lack of knowledge
of his or her cause of action.” Ferguson v. McKenzie, 202 Ill. 2d 304, 311 (2001); see also
Sorenson, 327 Ill. App. 3d at 708 (statute of repose is designed to place an outer limit on the
time for commencing an action). Statutes of repose “ ‘effect a legislative judgment that a
defendant should be free from liability after the legislatively determined period of time.’ ”
California Public Employees’ Retirement System v. ANZ Securities, Inc., 582 U.S. ___, ___,
137 S. Ct. 2042, 2049 (2017) (quoting CTS Corp. v. Waldburger, 573 U.S. 1, 8 (2014)).
¶ 50 When the repose period expires, the cause of action is extinguished and the plaintiff’s right
to bring the action is terminated. Evanston Insurance, 2014 IL 114271, ¶ 16. “[S]tatutes of
repose begin to run on the date of the last culpable act or omission of the defendant.” (Internal
quotation marks omitted.) California Public Employees’ Retirement System, 582 U.S. at ___,
137 S. Ct. at 2049; see also Snyder v. Heidelberger, 2011 IL 111052, ¶ 18 (“period of repose
in a legal malpractice case begins to run on the last date on which the attorney performs the
work involved in the alleged negligence”); Sorenson, 327 Ill. App. 3d at 710 (“statute of repose
runs from the time of the acts or omissions alleged to have caused injury”).
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¶ 51 In this case, the last culpable act or omission that gave rise to Carlson’s amendments to his
proposed second amended complaint was Michael Best’s alleged failure to advise Carlson in
November 2008 about the statute of limitations for his potential claims against Collins. Thus,
the six-year statute of repose started running in November 2008 and ended November 2014.
Carlson filed his first complaint against Michael Best on January 13, 2016, and filed his initial
motion for leave to file his second amended complaint on October 30, 2018. Therefore, the
amendments to Carlson’s proposed second amended complaint involved acts or omissions
occurring well outside the six-year period of repose in section 13-214.3(c) of the Code.
¶ 52 Carlson argues that even if his 2008 claims against Michael Best were filed outside of the
six-year statute of repose, the repose period should be tolled because—after the period of
repose expired—Michael Best continued to represent him and engaged in a continuing course
of negligent conduct. At the outset, we note that as Michael Best observes, Carlson waived this
argument by failing to raise it in the circuit court. See, e.g., Wagner v. City of Chicago, 166 Ill.
2d 144, 147 (1995) (“as a general rule, any issue not raised at the trial court level is waived”).
However, we also note that the waiver rule is a limitation on the parties, not on the court.
Herzog v. Lexington Township, 167 Ill. 2d 288, 300 (1995). Accordingly, we exercise our
discretion to consider this fully briefed argument on its merits. People v. Begay, 2018 IL App
(1st) 150446, ¶ 55.
¶ 53 Illinois courts have consistently held that the statute of repose is not tolled by the
continuation of the attorney-client relationship. Mauer v. Rubin, 401 Ill. App. 3d 630, 640
(2010); Hester v. Diaz, 346 Ill. App. 3d 550, 554 (2004); Sorenson, 327 Ill. App. 3d at 710;
Serafin v. Seith, 284 Ill. App. 3d 577, 585-87 (1996); Witt v. Jones & Jones Law Offices, P.C.,
269 Ill. App. 3d 540, 544 (1995). Under the continuous course of treatment doctrine, the
plaintiff must show “(1) that there was a continuous and unbroken course of negligent
treatment, and (2) that the treatment was so related as to constitute one continuing wrong.”
(Emphasis in original.) Cunningham v. Huffman, 154 Ill. 2d 398, 406 (1993).
¶ 54 Thus, even assuming that the statute of repose for legal malpractice actions allowed for a
theory of continuous course of negligent representation, it would not apply under the facts in
this case because it is undisputed that Michael Best did not continuously represent Carlson but
rather represented him for one month in 2010 and again in 2014. By the time Carlson consulted
with Michael Best in 2010 and 2014, his claims against Collins were already time-barred by
the two-year statute of limitations set forth in section 13-214.3(b) of the Code. See Carlson,
2015 IL App (1st) 140526, ¶¶ 23, 48-49. Therefore, even assuming Michael Best failed to
advise Carlson about the statute of limitations for his potential claims against Collins in 2008,
Michael Best’s alleged omissions, which occurred in 2010 or 2014, were not a continuation of
the 2008 omission.
¶ 55 Carlson contends that the doctrine of equitable estoppel bars Michael Best from asserting
that any claims arising out of the alleged 2008 representation are time-barred by the six-year
statute of repose because any delay in bringing these claims was caused by Michael Best’s
breach of the standard of care and fiduciary duty. We disagree.
¶ 56 “Equitable estoppel is a theory that precludes a litigant from denying prior assertions in
cases where it would be unjust to permit the litigant to disavow express and implied statements
upon which another party has relied and that have caused him to forego filing his suit.” Serafin,
284 Ill. App. 3d at 588. “The common-law doctrine of equitable estoppel, as applied in the
context of the statute of repose, parallels the fraudulent concealment statute.” Mauer, 401 Ill.
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App. 3d at 648. To establish that either applies, 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.” Wolf v. Bueser, 279 Ill. App. 3d 217, 228 (1996). “[T]he doctrine
of equitable estoppel will not apply to a case if defendant’s conduct terminated within ample
time to allow the plaintiff to still avail himself of any legal rights he may have had.” Serafin,
284 Ill. App. 3d at 589; Barratt v. Goldberg, 296 Ill. App. 3d 252, 259 (1998) (same).
¶ 57 If Carlson had engaged Michael Best in 2008, and at that time Michael Best failed to advise
him of the two-year statute of limitations applicable to his potential claims against Collins,
under the six-year statute of repose, his cause of action would extinguish sometime in 2014.
Carlson first officially engaged Michael Best from August 18, 2010, through September 16,
2010, for consultation regarding a potential legal malpractice action against Collins. Parker
advised Carlson that a legal malpractice action against Collins “may be tough in the face of the
statute of limitations.” Parker told Carlson that the applicable statute of limitations for a legal
malpractice claim was two years from the date he should have learned of the malpractice.
When Parker advised Carlson in 2010 that his claims against Collins were subject to the two-
year statute of limitations, four years remained under the statute of repose. Therefore, equitable
estoppel would not apply to bar application of the statute of repose. In other words, when
Carlson engaged Michael Best in 2010, he “had ample time to avail himself of any legal rights
he may have had.” Serafin, 284 Ill. App. 3d at 589.
¶ 58 Carlson next contends that Michael Best had a duty in 2014 to advise him that he had
claims against Michael Best arising out of the law firm’s alleged representation of him in 2008.
We disagree with this contention for two reasons. First, as the above analysis shows, Carlson
never had a viable malpractice claim against Michael Best based on the alleged 2008
representation, and therefore, there was nothing for Michael Best to disclose to Carlson in
2014. Second, “[t]his court has rejected the notion that a lawyer has an affirmative obligation
to advise a client of the grounds to sue him for legal malpractice.” Lamet v. Levin, 2015 IL
App (1st) 143105, ¶ 32; see also Fitch v. McDermott, Will & Emery, LLP, 401 Ill. App. 3d
1006, 1025 (2010) (finding “no case that would require an attorney to affirmatively advise his
client of his negligence and the statute of limitations for suing him”).
¶ 59 Carlson maintains that this court should disregard the above precedent under the facts in
this case, arguing that at the time he engaged Michael Best in 2014, “Best was specifically
asked to review their prior work and they accepted that engagement.” Carlson asserts that a
question of fact exists as to the scope of Michael Best’s duty. This argument is contrary to the
express language in the parties’ engagement letter of February 2014. The engagement letter
limited the scope of Michael Best’s engagement to advising Carlson on “pending litigation,”
the pending Carlson appeal, and the section 2-1401 petition to vacate in the Willis Capital LLC
appeal.
¶ 60 Michael Best also contends that we should affirm the circuit court’s ruling because Carlson
fails to satisfy the four factors as set forth in Loyola, 146 Ill. 2d at 273.
¶ 61 b. Application of the Loyola Factors
¶ 62 Our supreme court has identified four factors reviewing courts should consider in
determining whether a circuit court abused its discretion in denying leave to amend a pleading:
“(1) whether the proposed amendment would cure the defective pleading; (2) whether other
parties would sustain prejudice or surprise by virtue of the proposed amendment; (3) whether
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the proposed amendment is timely; and (4) whether previous opportunities to amend the
pleading could be identified.” Id. “The party seeking leave to amend bears the burden of
demonstrating that all four factors favor the relief requested.” United Conveyor Corp. v.
Allstate Insurance Co., 2017 IL App (1st) 162314, ¶ 36. However, if that party fails to establish
the first factor, showing that the proposed amendment would cure the defective pleading, then
the court need not proceed to consider the remaining three factors. Hayes Mechanical, Inc. v.
First Industrial, L.P., 351 Ill. App. 3d 1, 7 (2004).
¶ 63 We confine our analysis to the first Loyola factor because it is dispositive. We find that the
proposed amendments to Carlson’s second amended complaint—which sought to add a new
allegation that Michael Best first represented Carlson in 2008, rather than in 2010, as Carlson
alleged in his original and first amended complaints—cannot cure the pleading defects. At his
discovery deposition, Carlson testified that he “[d]id not engage Michael Best in 2008.” We
agree with Michael Best’s contention that Carlson’s deposition testimony constituted a judicial
admission that could not be contradicted by contrary evidence.
¶ 64 “A judicial admission is a deliberate, clear, unequivocal statement of a party about a
concrete fact within that party’s peculiar knowledge.” (Internal quotation marks omitted.)
Caponi v. Larry’s 66, 236 Ill. App. 3d 660, 671 (1992). “It must concern a concrete fact and
not be merely a matter of inference, opinion, estimate, or uncertain memory [citation], and
such admission of fact carries with it an admission of other facts necessarily implied from it
[citation].” Id. “A judicial admission may not be contradicted and is binding upon the party
making such admission.” Id. “Testimony at a discovery deposition may constitute a judicial
admission.” In re Estate of Rennick, 181 Ill. 2d 395, 407 (1998).
¶ 65 While discovery deposition testimony is normally treated as evidentiary admissions subject
to explanation and contradiction, discovery deposition testimony will be treated as a judicial
admission if it is “so deliberate, detailed and unequivocal, as to matters within the party’s
personal knowledge.” Chmielewski v. Kahlfeldt, 237 Ill. App. 3d 129, 133 (1992). “The judicial
policy behind this rule, which is well accepted in summary judgment cases, is that once a party
has given sworn testimony, he should not be allowed to change his testimony to avoid the
consequences of his prior testimony.” Id. The determination of whether a party’s statement is
sufficiently unequivocal to be considered a judicial admission is a question of law when
considering a motion for summary judgment. Id. at 134; Caponi, 236 Ill. App. 3d at 671.
¶ 66 In this case, with his counsel by his side, and with knowledge that his testimony was being
transcribed and video recorded, Carlson gave deposition testimony under oath, that he “[d]id
not engage Michael Best in 2008.” There was no equivocation in Carlson’s testimony, and his
testimony pertained to a matter within his personal knowledge—whether he engaged Michael
Best in 2008. Therefore, Carlson’s deposition testimony constituted a judicial admission
because it was a deliberate, clear, unequivocal statement about a concrete fact within his
peculiar knowledge. See, e.g., Caponi, 236 Ill. App. 3d at 671.
¶ 67 Carlson raises a number of arguments in support of his contention that his deposition
testimony did not constitute a judicial admission. For the reasons which follow, we find that
none of these arguments are persuasive.
¶ 68 Carlson argues that his deposition testimony that he “[d]id not engage Michael Best in
2008” is not a judicial admission because he was thinking “out loud” when he answered the
deposition question about whether he engaged Michael Best in 2008. We disagree. When
deposition testimony is deliberate, clear, and unequivocal about a concrete fact within the
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party’s personal knowledge, this testimony cannot be rendered equivocal by merely asserting
that it was the result of “thinking out loud.” See, e.g., Hansen v. Ruby Construction Co., 155
Ill. App. 3d 475, 481 (1987) (finding deposition testimony “was quite unequivocal”).
¶ 69 We also reject Carlson’s contention that he is not bound by his deposition answer because
it constituted a legal conclusion. Carlson argues that even if his deposition answer is construed
as an unequivocal statement that he did not “engage” Michael Best, the statement still does not
constitute a judicial admission because judicial admissions only apply to facts and not legal
conclusions and the word “engage” involves a legal conclusion about whether a contract or
legally binding relationship existed. A legal conclusion is a “statement that expresses a legal
duty or result but omits the facts creating or supporting the duty or result.” Black’s Law
Dictionary (11th ed. 2019). Carlson’s deposition answer does not constitute a legal conclusion,
rather it concerns an ultimate issue of fact within his personal knowledge: whether he engaged
Michael Best in 2008.
¶ 70 Carlson next argues that even if he made an unequivocal statement that he believed he did
not engage Michael Best in 2008, this statement was not dispositive because the subjective
intent of a client about whether an attorney was “engaged” is not dispositive as to whether an
attorney-client relationship was created. In the instant matter, Michael Best denied there was
any attorney-client relationship in 2008, and Carlson, by his own deposition testimony, claimed
not to have engaged Michael Best in 2008.
¶ 71 Illinois precedent establishes that mutual subjective intent between a potential client and
attorney is required to create an attorney-client relationship. See, e.g., Pranno Donkle v. Lind,
2018 IL App (1st) 171915, ¶ 33 (attorney-client relationship is a voluntary, contractual
relationship that requires the consent of both the attorney and client); Rubin & Norris, LLC v.
Panzarella, 2016 IL App (1st) 141315, ¶ 37 (attorney-client relationship cannot be created by
attorney alone and generally the duty falls upon a potential client to initiate contact with the
attorney). If the attorney-client relationship is one established by the intent of the parties under
ordinary principles of contract law, which appears to be the present state of the law in Illinois,
then no attorney-client relationship was ever formed between Michael Best and Carlson in
2008, as there was no meeting of the minds. As a result, we find that the proposed amendments
to Carlson’s second amended complaint do not cure the defects in his prior pleadings.
¶ 72 Accordingly, we find that in light of the applicable period of repose and Carlson’s failure
to establish the first Loyola factor, the circuit court did not abuse its discretion in denying
Carlson’s motion for leave to file a second amended legal malpractice complaint.
¶ 73 2. Denial of Discovery Motion
¶ 74 Carlson next contends that the circuit court abused its discretion when it denied his motion
to conduct further discovery before responding to Michael Best’s motion for summary
judgment. Carlson asserts that since Michael Best filed its motion for summary judgment “at
the very end of party depositions,” he needed additional time to depose attorneys Shawn
Collins, Patrick Collins, and Fish. Carlson contends that the depositions of these individuals
were crucial because they represented him and they had numerous conversations with him that
were relevant to the statute of limitations.
¶ 75 A circuit court is afforded considerable discretion in ruling on matters pertaining to
discovery, and we will not disturb such a ruling absent an abuse of that discretion. Kensington’s
Wine Auctioneers & Brokers, Inc. v. John Hart Fine Wine, Ltd., 392 Ill. App. 3d 1, 11 (2009).
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A circuit court abuses its discretion where its ruling is arbitrary, fanciful, or unreasonable or
where no reasonable person would adopt the court’s view. Evitts v. DaimlerChrysler Motors
Corp., 359 Ill. App. 3d 504, 513 (2005).
¶ 76 Illinois Supreme Court Rule 191(b) (eff. Jan. 4, 2013) specifies the procedure a party
should follow when he or she believes that additional discovery is necessary to adequately
respond to a motion for summary judgment. Brummel v. Grossman, 2018 IL App (1st) 170516,
¶ 91. Rule 191(b) requires in relevant part that the party seeking additional discovery provide
an affidavit attesting that:
“[M]aterial facts which ought to appear in the affidavit are known only to persons
whose affidavits affiant is unable to procure by reason of hostility or otherwise, naming
the persons and showing why their affidavits cannot be procured and what affiant
believes they would testify to if sworn, with reasons for his belief ***.” Ill. S. Ct. R.
191(b) (eff. Jan. 4, 2013).
¶ 77 Carlson did not support his discovery motion with a Rule 191(b) affidavit, nor did he make
any other efforts to comply with the requirements of the rule. “Failure to comply with Rule
191(b) defeats an objection on appeal that insufficient time for discovery was allowed.”
Giannoble v. P&M Heating & Air Conditioning, Inc., 233 Ill. App. 3d 1051, 1064 (1992).
Moreover, even if Carlson had sought to comply with Rule 191(b), he could not have done so.
Carlson maintains that he needed to take the requested depositions to discover facts about his
own conversations. However, statements that third parties made to Carlson are not “known
only to” the third parties as required by the rule. Therefore, we find no abuse of discretion in
the circuit court’s decision to deny Carlson’s motion to conduct additional discovery before
responding to Michael Best’s motion for summary judgment.
¶ 78 3. Carlson’s Claims Against Collins
¶ 79 Carlson next contends that Michael Best caused him to lose his legal malpractice claims
against Collins because it failed to advise him in August 2010 about the statute of limitations
applicable to those claims. Michael Best responds that it did not cause Carlson to lose his legal
malpractice claims against Collins because those claims were already time-barred by the
applicable statute of limitations triggered by inquiry notice, prior to Carlson engaging Michael
Best in August 2010.
¶ 80 Section 13-214.3(b) of the Code provides that an action for legal malpractice must be filed
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 2012). The
question as to when a plaintiff knew or reasonably should have known of his legal injury, so
as to trigger the applicable limitations period, is ordinarily a question of fact; however, it may
be determined as a matter of law where the undisputed facts allow for only one conclusion.
Butler v. Mayer, Brown & Platt, 301 Ill. App. 3d 919, 922 (1998).
¶ 81 The two-year statute of limitations applicable to legal malpractice actions incorporates the
“discovery rule,” which delays the commencement of the statutory period until the injured
party knows or reasonably should know facts that would cause him or her to believe that their
injury was wrongfully caused. Brummel v. Grossman, 2018 IL App (1st) 162540, ¶ 26.
Discovery for purposes of the statute of limitations may rest upon so-called inquiry notice,
where “[o]nce a party knows, or reasonably should know, both of his injury and that the injury
was wrongfully caused, the injured person has the burden to inquire further as to the existence
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of a cause of action.” Id.; see also Pruitt v. Schultz, 235 Ill. App. 3d 934, 936-37 (1992)
(discussing inquiry notice). “There is no requirement that a plaintiff must discover the full
extent of his or her injuries before the statute of limitations begins to run.” Hoffman v.
Orthopedic Systems, Inc., 327 Ill. App. 3d 1004, 1010 (2002). “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 (quoting Hoffman,
327 Ill. App. 3d at 1011). “At that point, the burden is upon plaintiff to inquire further as to the
existence of a cause of action.” Hoffman, 327 Ill. App. 3d at 1011.
¶ 82 A review of the record in this case shows that Carlson was on inquiry notice of his legal
malpractice claims against Collins no later than June 2008. In June 2008, Carlson’s accountant
Flaherty told him that he “potentially [had] a real problem” regarding the proposed settlement
agreement. At his deposition, Carlson verified an e-mail he sent to Collins regarding his
conversation with Flaherty concerning the proposed settlement agreement, where the
accountant told Carlson among other things: “I don’t know what happened here *** but you
left 12 million on the table. You should be able to go back and get it.” Contrary to Carlson’s
suggestion, we do not believe that a reasonable person would consider the statement that he
left $12 million on the negotiating table to have been made “in jest.” Thus, Carlson was on
inquiry notice of his potential legal malpractice claims against Collins no later than June 2008,
more than two years before he engaged Michael Best in August 2010.
¶ 83 Carlson argues that his conversation with Flaherty did not trigger the statute of limitations
because, even if it put him on notice that the settlement was insufficient, he did not know that
the insufficiency may have had a wrongful cause. Contrary to this assertion, “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. There is no requirement that a plaintiff
must discover the full extent of his or her injuries before the statute of limitations begins to
run. Golla v. General Motors Corp., 167 Ill. 2d 353, 367 (1995). Here, once Carlson’s
accountant informed him that he left $12 million on the negotiating table and that he should
go back and get it, Carlson knew or should have known, that Collins, as his attorney, should
have made certain he was adequately protected. At that point, Carlson had “ ‘sufficient
information concerning [an] injury and its cause to put a reasonable person on inquiry to
determine whether actionable conduct is involved.’ ” Hoffman, 327 Ill. App. 3d at 1011(quoting Knox College v. Celotex Corp., 88 Ill. 2d 407, 416 (1981)).
¶ 84 Carlson alternatively argues that as a result of this court’s decision in Carlson, 2015 IL
App (1st) 140526, we are precluded by the law of the case doctrine and collateral estoppel
from finding that the statute of limitations started running prior to November 12 or 13, 2008.
Neither doctrine applies in this case.
¶ 85 The law of the case doctrine bars relitigation of an issue already decided by a reviewing
court in a prior appeal. Preferred Personnel Services, Inc. v. Meltzer, Purtill & Stelle, LLC,
387 Ill. App. 3d 933, 947 (2009). The doctrine does not apply in a subsequent stage of the
litigation when the legal issues, underlying facts, or parties are different. Id.; see also Gauger
v. Hendle, 2011 IL App (2d) 100316, ¶ 107 (law of the case doctrine does not apply when the
legal issues, standards of proof, and parties are different). Collateral estoppel, also referred to
as issue preclusion, bars a party from relitigating an issue if the issue decided in the prior
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litigation is identical to one presented in the current case. Pine Top Receivables of Illinois, LLC
v. Transfercom, Ltd., 2017 IL App (1st) 161781, ¶ 8.
¶ 86 Thus, both the law of the case doctrine and collateral estoppel require that the court be
presented with an issue identical to the one decided in the prior litigation. Neither doctrine
applies here because this court’s prior decision in Carlson, 2015 IL App (1st) 140526, involved
different parties and different issues. The core issue in Carlson was whether there was any
evidence indicating that Carlson knew or should have known or discovered that his former
partners had wrongfully caused him injury thereby triggering the two-year statute of limitations
for legal malpractice claims. Id. ¶ 3.
¶ 87 4. Carlson’s Claims Against Drinker
¶ 88 Carlson argues that even if his legal malpractice claims against Collins were time-barred
by the time he engaged Michael Best in August 2010, Drinker caused that loss, and Michael
Best, in turn, caused him to lose his legal malpractice claims against Drinker. Carlson contends
that Drinker committed legal malpractice in November 2008 by failing to advise him that his
legal malpractice claims against Collins were subject to the two-year statute of limitations and
six-year statute of repose applicable to attorney malpractice actions. Carlson filed a certificate
pursuant to section 1-109 of the Code (735 ILCS 5/1-109 (West 2010)), attesting that when he
met with attorneys at Drinker in November 2008, they “did not identify any legal malpractice
claim that [he] had against Collins or Fish nor did [they] discuss the statute of limitations or
statute of repose related to legal malpractice claims.” Carlson argues that if the statute of
limitations expired on any legal malpractice claims he had against Collins before August 2010,
then Michael Best violated the applicable standard of care by failing to advise him that he had
legal malpractice claims against Drinker based on that law firm’s failure to advise him that his
claims against Collins were subject to the two-year statute of limitations and six-year statute
of repose governing attorney malpractice actions.
¶ 89 Michael Best argues in response that it did not cause Carlson to lose any potential
malpractice claims against Drinker because those claims were viable when Carlson last
engaged Michael Best in February 2014 and they became time-barred by operation of the
applicable statute of repose, which expired after their engagement ended and Carlson engaged
new counsel.
¶ 90 Illinois case law is well settled that when a cause of action is viable at the time an attorney
is discharged, and a second attorney is retained with enough time to preserve the plaintiff’s
cause of action, then the second attorney’s failure to preserve that cause of action is a
superseding cause of the loss of the action. See Nettleton v. Stogsdill, 387 Ill. App. 3d 743, 755
n.3 (2008) (and cases cited therein). In this case, a review of the record shows that when
Carlson last retained Michael Best in February 2014, any potential legal malpractice claims
against Drinker were still viable.
¶ 91 The record reveals that Carlson met with attorneys from Drinker on November 19, 2008,
to review the settlement agreement. According to Carlson, the attorneys raised questions about
whether the legal services Collins rendered to him in connection with the settlement agreement
had been substandard. Carlson, 2015 IL App (1st) 140526, ¶ 16. Carlson claimed this was the
first time he became aware of a possible legal malpractice claim against Collins. Carlson
subsequently met with the Drinker attorneys in October 2009, where they discussed his
concerns about Collins’s handling of the settlement agreement. According to Carlson, the
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attorneys steered him away from filing a legal malpractice complaint against Collins by
focusing on fraud claims against his former business partners.
¶ 92 The Drinker attorneys’ actions in this regard were subject to the two-year statute of
limitations and six-year statute of repose, and any negligent acts or omissions would have
triggered the running of the statute of repose. See, e.g., Mauer, 401 Ill. App. 3d at 639 (statute
of repose begins to run as soon as the event creating the malpractice occurs). The statute of
repose would have started running in October 2009, when Drinker failed to advise Carlson of
the two-year statute of limitations. And the statute of repose expired six years later in October
2015.
¶ 93 Carlson’s second engagement with Michael Best began in February 2014 and ended in
May 2015, and by September 2015, Carlson had engaged new counsel. Therefore, even if
Carlson’s legal malpractice claims against Drinker did not accrue until the circuit court
dismissed his legal malpractice claims against Collins in January 2014, his claims against
Drinker, which did not expire under the statute of repose until October 2015, were still viable
after Michael Best’s representation ended in May 2015, and he retained new counsel in
September 2015. As a result, Michael Best did not cause Carlson to lose any of his legal
malpractice claims he may have had against Drinker.
¶ 94 5. Arguments Raised in Motion for Reconsideration
¶ 95 Carlson raises two arguments on appeal that the circuit court declined to address in his
motion for reconsideration. For reasons which will be discussed below, we believe the circuit
court’s decision was correct.
¶ 96 “The purpose of a motion to reconsider is to bring to the court’s attention newly discovered
evidence that was not available at the time of the original hearing, changes in existing law, or
errors in the court’s application of the law.” Evanston Insurance, 2014 IL 114271, ¶ 36.
Generally, new legal arguments raised for the first time in a motion to reconsider are deemed
forfeited. See, e.g., American Chartered Bank v. USMDS, Inc., 2013 IL App (3d) 120397, ¶ 13
(“Issues cannot be raised for the first time in the trial court in a motion to reconsider and issues
raised for the first time in a motion to reconsider cannot be raised on appeal.”); Sewickley, LLC
v. Chicago Title Land Trust Co., 2012 IL App (1st) 112977, ¶ 36 (same). However, there is
authority supporting the proposition that a circuit court has the discretion to consider a new
issue raised for the first time in a motion to reconsider when a party has a reasonable
explanation for why he or she did not raise the issue earlier in the proceedings. Delgatto v.
Brandon Associates, Ltd., 131 Ill. 2d 183, 195 (1989); In re Marriage of Epting, 2012 IL App
(1st) 113727, ¶ 41.
¶ 97 Here, Carlson has not provided a reasonable explanation for why he did not raise his
arguments earlier in the proceedings. Therefore, he has forfeited them for review. Forfeiture
aside, we find the circuit court did not abuse its discretion in declining to address the two
arguments Carlson set forth in his motion to reconsider.
¶ 98 a. Double Hearsay
¶ 99 Carlson argues that his e-mail recounting his June 2008 conversation with his accountant,
John Flaherty, in which Flaherty told him that he left $12 million on the negotiating table, is
inadmissible hearsay that did not fall under any exception to the hearsay rule. Hearsay is a
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statement, other than a statement made by a declarant while testifying at trial or hearing,
offered into evidence to prove the truth of the matter asserted. Ill. R. Evid. 801(c) (eff. Oct. 15,
2015); Prodromos v. Everen Securities, Inc., 341 Ill. App. 3d 718, 728 (2003) (“Hearsay is an
out-of-court statement offered to prove the truth of the matter asserted ***.”).
¶ 100 Carlson’s e-mail recounting his conversation with Flaherty presents a potential double
hearsay issue since it involves two out-of-court statements. Double hearsay is “[a] hearsay
statement that contains further hearsay statements within it, none of which is admissible unless
exceptions to the rule against hearsay can be applied to each level.” Black’s Law Dictionary
(11th ed. 2019); see also People v. McCullough, 2015 IL App (2d) 121364, ¶ 113 (multiple
hearsay is not admissible unless each layer of hearsay is excused by its own exception).
However, an out-of-court statement offered into evidence for some purpose other than to prove
the truth of the matter asserted is not hearsay. People v. Kliner, 185 Ill. 2d 81, 150 (1998).
Therefore, there is no double hearsay where each statement is nonhearsay. Ill. R. Evid.
801(d)(2)(A) (eff. Oct. 15, 2015) (statement is not hearsay if it is offered against a party and is
the party’s own statement).
¶ 101 Here, neither the statement by Flaherty nor the statement by Carlson were hearsay, as
neither of the statements was offered for their truth. Rather, the statements were offered to
establish that Carlson was put on inquiry notice that there were problems with the proposed
settlement agreement. “ ‘A statement that is offered to prove that a listener had notice of the of
the information contained therein, rather than to prove the truth of the matter asserted, is not
hearsay.’ ” Piser v. State Farm Mutual Automobile Insurance Co., 405 Ill. App. 3d 341, 351
(2010) (quoting People v. Shoultz, 289 Ill. App. 3d 392, 395-96 (1997)).
¶ 102 b. Reconsideration Based on Newly Discovered Evidence
¶ 103 Carlson finally argues that he presented the circuit court with newly discovered evidence
in the form of a certification from Flaherty attesting that the June 2008 conversation never
occurred. “When a movant seeks reconsideration based on newly discovered evidence, ‘a party
must show that the newly discovered evidence existed before the initial hearing but had not
yet been discovered or was otherwise unobtainable.’ ” Simmons v. Reichardt, 406 Ill. App. 3d
317, 324 (2010) (quoting Stringer v. Packaging Corp. of America, 351 Ill. App. 3d 1135, 1141
(2004)). The statements made by Flaherty in his certification do not qualify as newly
discovered evidence for purposes of Carlson’s motion for reconsideration. Carlson, as a party
to his conversation with Flaherty, identified the conversation as having occurred in June 2008,
as noted in his e-mail. Carlson had been aware of the conversation since June 2008. Carlson
cannot now argue that the circuit court erred by refusing to consider this to be newly discovered
evidence, where Carlson was a party to the conversation he now claims did not occur.
¶ 104 Carlson asserts that the circuit court’s discovery stay prevented him from obtaining
Flaherty’s statement sooner. The record does not support this assertion. Carlson never
requested leave to depose Flaherty. Instead, Carlson waited until June 12, 2019, after he filed
his motion to reconsider, to send a document subpoena to Flaherty.
¶ 105 III. CONCLUSION
¶ 106 The circuit court did not abuse its discretion in denying Carlson’s motion for leave to file
a second amended legal malpractice complaint where the proposed amendments concerned
allegations of malpractice that were time-barred by the applicable period of repose and Carlson
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failed to establish the first Loyola factor showing that the allegations would cure defects in the
prior pleadings. The circuit court did not abuse its discretion in denying Carlson’s motion to
conduct additional discovery where he failed to support the motion with a Rule 191(b)
affidavit.
¶ 107 Moreover, we conclude that the circuit court properly granted summary judgment in favor
of Michael Best on count I of the amended complaint for legal malpractice where there was no
genuine issue of material fact as to damages arising out of the legal representation Michael
Best provided him in connection with the settlement agreement. Specifically, we find that there
is no genuine issue of material fact as to whether Michael Best caused Carlson to lose any
potential legal malpractice claims against Collins because any potential claims Carlson had
against Collins were already time-barred by the applicable statute of limitations before Carlson
engaged Michael Best in August 2010. In addition, we find that there is no genuine issue of
material fact as to whether Michael Best caused Carlson to lose any potential legal malpractice
claims against Drinker because any potential claims Carlson had against Drinker were still
viable when Carlson engaged successor counsel in November 2010. Furthermore, Carlson
cannot sue Michael Best for failing to inform him of a claim against Michael Best because
there is no duty for a law firm to inform a client that he or she has a claim against it.
¶ 108 Finally, we conclude that the circuit court did not abuse its discretion in declining to address
the arguments Carlson raised in his motion for reconsideration, as they were not only waived
but without merit. The statement that Carlson contends was hearsay was not in fact hearsay
because it was not offered for the truth of the matter asserted. The alleged newly discovered
evidence was not, in fact, newly discovered.
¶ 109 Affirmed.
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