Todd Fortier v. Terani Law Firm

NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1
United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Submitted July 20, 2018 *
Decided July 24, 2018
Before
FRANK H. EASTERBROOK, Circuit Judge
DAVID F. HAMILTON, Circuit Judge
AMY J. ST. EVE, Circuit Judge
No. 16-3571
TODD FORTIER, Appeal from the United States District
Plaintiff-Appellant, Court for the Northern District of Illinois,
Eastern Division.
v.
No. 15 C 1591
TERANI LAW FIRM, et al.,
Defendants-Appellees. Charles R. Norgle,
Judge.
ORDER
While Todd Fortier was awaiting trial for burglary in 2011, he was committed to a
psychiatric institution. He alleges in this lawsuit—in which he asserts jurisdiction based
upon diversity of citizenship—that the attorneys he hired to defend him misrepresented
their qualifications and prejudiced his case. After significant motion practice over 18
*
We have agreed to decide the case without oral argument because the briefs and record
adequately present the facts and legal arguments, and oral argument would not significantly aid the
court. See FED. R. APP. P. 34(a)(2)(C).
No. 16-3571 Page 2
months (a motion for summary judgment, multiple motions to dismiss, and countless
motions for sanctions), the defendants first raised in a reply brief a fundamental issue:
that the district court might lack subject-matter jurisdiction because Fortier alleged an
insufficient amount in controversy. The district judge granted their second motion to
dismiss. We agree with the judge that Fortier failed to establish federal subject-matter
jurisdiction.
Before he was institutionalized, Fortier was charged in Illinois with four counts of
burglary, and he hired a defense attorney. For reasons that Fortier does not explain,
however, he sought additional representation from the Terani Law Firm. Appellees
represent that the firm no longer exists, but at the time of Fortier’s representation it was
based in California, though it advertised nationally. Fortier says that an attorney at the
firm represented to him that it had a nationwide practice. After Fortier paid the firm a
retainer, it contracted with an Illinois-based lawyer to represent Fortier at two
competence hearings. Eventually Fortier pleaded guilty, but he later changed his mind
and filed a pro se motion to withdraw his guilty plea. The judge denied the motion, and
then Fortier filed disciplinary complaints against his lawyers.
Since Fortier filed this suit in February 2015, the litigation has been remarkably
hostile and protracted. Fortier’s original complaint asserted various state-law claims
against the Terani Law Firm and several of the firm’s employees or affiliates. The
defendants moved for summary judgment without answering the complaint. (They did
so based on their erroneous conclusion that the district court’s screening order
foreclosed a 12(b)(6) motion, FED. R. CIV. P. 12(b)(6).) The judge, taking all of the
defendants’ factual allegations as true because Fortier did not respond to the motion,
nevertheless denied the motion in large part. The judge dismissed a claim under the
Illinois Consumer Fraud and Deceptive Business Practices Act with prejudice and
allowed the tort claims to go forward against only some defendants.
Days after the summary-judgment ruling, the defendants moved to dismiss the
remaining claims on several theories. The court denied that motion as moot because
Fortier filed an amended complaint that survived screening. The defendants again
moved to dismiss, asserting a variety of defenses. After Fortier responded, the
defendants filed a reply brief in which they primarily argued that Fortier’s claims were
time-barred, but also mentioned for the first time that subject-matter jurisdiction might
be lacking because Fortier’s claimed damages did not exceed $75,000. Fortier alleged
$55,000 in compensatory damages for attorney fees plus $275,000 in punitive damages.
The defendants contested the availability of punitive damages. The district court
No. 16-3571 Page 3
ordered Fortier to show why the case should not be dismissed for lack of jurisdiction.
Instead Fortier filed a “supplemental” complaint and included new claims, including
that the defendants and their attorney had engaged in a RICO conspiracy.
The district judge concluded that Fortier had not met the amount-in-controversy
requirement nor had he established the domiciles of the individual defendants or the
citizenship of the law firm, see 28 U.S.C. § 1332(a)(1), and therefore dismissed Fortier’s
remaining claims without prejudice. The judge explained that Illinois law precludes
punitive damages in attorney-malpractice actions, which meant that Fortier could not
meet the amount-in-controversy requirement. Id. § 1332(b). The judge also determined
that there was no federal-question jurisdiction because the new claim invoking RICO
was too frivolous to engage the court’s jurisdiction. See Steel Co. v. Citizens for a Better
Env't, 523 U.S. 83, 89 (1998). Fortier appealed the jurisdictional ruling and moved to
certify three questions of state law relating to whether he had stated valid claims.
Fortier first argues that the defendants either admitted to jurisdiction or waived
their jurisdictional challenge by not raising it earlier, but subject-matter jurisdiction
cannot be waived, forfeited, or consented to by the parties. Ins. Corp. of Ireland v.
Compagnie des Bauxites de Guinee, 456 U.S. 694, 702 (1982). Next Fortier concedes that he
relies on punitive damages to satisfy the jurisdictional minimum but argues that such
damages are recoverable. In order to find that the amount-in-controversy requirement is
met by a demand for punitive damages, we assess first whether state law allows for their
recovery. Then, “[i]f the answer is yes, the court has subject-matter jurisdiction unless it
is clear beyond a legal certainty that the plaintiff would under no circumstances be
entitled to recover the jurisdictional amount.” Del Vecchio v. Conseco, Inc., 230 F.3d 974,
978 (7th Cir. 2000) (internal citation and quotation marks omitted).
Fortier loses at the first step because Illinois law bars punitive damages in legal
malpractice cases. See 735 ILL. COMP. STAT. 5/2-1115 (“In all cases ... in which the plaintiff
seeks damages by reason of legal ... malpractice, no punitive ... damages shall be
allowed.”) The rule applies regardless of how a plaintiff labels his claim. Illinois courts
have decided that malpractice includes all claims based on a lawyer’s “actions and
statements in the creation of the attorney-client relationship.” Kennedy v. Grimsley,
837 N.E.2d 131, 134 (Ill. App. Ct. 2005) (“Plaintiff's allegations that defendant misled her
about that lack of skill or knowledge are so inextricably intertwined with her claims for
legal malpractice that they cannot escape the effect of section 2-1115.”); see also Scott v.
Chuhak & Tecson, P.C., 725 F.3d 772, 784 (7th Cir. 2013).
No. 16-3571 Page 4
But Fortier argues that his case is analogous to Cripe v. Leiter, a case in which an
Illinois appellate court ordered an attorney who had falsified billing records to pay
punitive damages. 683 N.E.2d 516, 518 (Ill. App. Ct. 1997). In that case, however, the
attorney engaged in fraudulent billing, which the court considered common-law fraud
because it did not implicate the attorney’s duties to use “skill, prudence, and diligence.”
Id. at 519. Fortier’s complaints relate to conversations he had with Terani lawyers and
paralegals before and at the time that he signed the retainer agreement, as well as
choices made during the representation. These allegations sound in legal malpractice,
not common-law fraud, so Fortier cannot meet the amount-in-controversy requirement
with punitive damages.
Fortier also argues that the district judge improperly disposed of the new claims
he alleged in his proposed “supplemental complaint”—unjust enrichment and
intentional infliction of emotional distress. Because Illinois law allows punitive damages
for these torts, he contends, his proposed amendment could have saved the
jurisdictional defect in his case. (Fortier does not challenge the dismissal of his RICO
claim, so we consider that argument waived.) But the district judge correctly determined
that Fortier merely assigned new legal theories to grievances about the same conduct.
Last, Fortier asserts that the judge erred in dismissing his claim under the Illinois
Consumer Fraud and Deceptive Business Practice Act. Because the court lacked
jurisdiction over the case at the time that the complaint was filed, the court should have
dismissed each claim, including this one, without prejudice. Frederiksen v. City of Lockport,
384 F.3d 437, 438 (7th Cir. 2004) (“‘No jurisdiction’ and ‘with prejudice’ are mutually
exclusive.”); Johnson v. Wattenbarger, 361 F.3d 991, 993 (7th Cir. 2004) (“If … the case as a
whole does not [meet the amount in controversy requirement], then the court must not
resolve any aspect of it on the merits.”)
The rest of Fortier’s arguments, to the extent we can discern them, lack merit. We
MODIFY the disposition of the district court to be a dismissal without prejudice and
AFFIRM as modified. We DENY Fortier’s motion to certify questions of law to the state
court.