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By Samson Habte
June 24 — The Illinois Supreme Court June 19 held that a lawyer hired to bring a wrongful death action owes a duty of care to the decedent's beneficiaries “despite the absence of a direct attorney-client relationship,” which duty extends to “the distribution phase” of the action.
“The assertion that an attorney's duty only extends to the [estate's] personal representative is at odds with the very purpose of the [Illinois Wrongful Death Act],” Justice Charles E. Freeman wrote. That contention also “ignores” prior cases which made clear that “the decedent's spouse and next of kin are the true parties in interest in a wrongful death action,” he added.
The court further held that the duty extends to “the distribution phase” of a case, and that lawyers may thus be liable for failing to ensure that monies recovered are disbursed in accordance with statutory guidelines.
The ruling revives a malpractice case that the guardian of Perry C. Powell, a disabled adult, filed against lawyers who brought a wrongful death suit against medical providers who treated Powell's deceased father. The lawyers were hired by Powell's mother, acting as administrator of her husband's estate.
One group of defendants settled for $15,000, distributed in equal shares to Powell, his sister and mother. The settlement order provided that Powell's $5,000 share was to be paid to his mother on his behalf. The probate court was not notified of the arrangement.
Another firm took over and negotiated a second settlement with the remaining defendants. Powell and his mother each received $118,000. Powell's share was again turned over to his mother.
The Illinois Wrongful Death Act provides that “if proceeds in excess of $5,000 are distributable to a minor or person under legal disability,” those monies “shall be administered and distributed under the supervision of the probate [court].”
Powell's sister subsequently alleged that funds from Powell's settlement were not being expended toward his care. A joint account where the proceeds were deposited was frozen after it was discovered that Powell's mother had withdrawn all but $26,000.
Powell's guardian then filed the present action—alleging, among other claims, counts for professional negligence against the law firms that litigated the wrongful death suit.
The trial court dismissed those malpractice counts, finding that the complaint did not sufficiently allege either the existence of a duty to Powell or proximate cause.
An appeals court reversed in part, rejecting the trial court's finding that a lawyer in a wrongful death action does not owe a duty to the next of kin. The panel did, however, sustain the dismissal of the claim against the law firm that obtained the first settlement. “[T]he amount distributed to Powell in the first settlement did not exceed $5,000 and appointment of a guardian was not required pursuant to [the] Act,” it explained.
“Since the beneficiaries named in a wrongful death action are intended beneficiaries of the action rather than merely incidental beneficiaries…, the attorney's duty extends to them.”Illinois Supreme Court
The supreme court affirmed. “Since the beneficiaries named in a wrongful death action are intended beneficiaries of the action rather than merely incidental beneficiaries …, the attorney's duty extends to them,” Freeman wrote.
The court also held that “an attorney who brings a wrongful death action owes a legal duty to the decedent's beneficiaries at the distribution of funds phase of the action.”
“[T]he Act makes clear that any amount recovered in such an action shall be for the ‘exclusive benefit' of the surviving spouse and next of kin,” Freeman noted.
“Further, the Act provides for distribution among the beneficiaries pursuant to their degree of dependency rather than distributions subject to the provisions of the Probate Act,” the court explained. “Clearly, the underlying purpose of a wrongful death action is to compensate those beneficiaries named in the action rather than the decedent's estate.”
The court declined to consider whether “the ‘potential for conflicts' that can arise at the distribution phase of the wrongful death action” should negate any duty owed to nonclient beneficiaries at that stage of a proceeding.
“Defendants maintain that an attorney cannot exercise undivided loyalty to each beneficiary at that stage since each beneficiary's interest is potentially adverse to one another,” Freeman noted. But that argument had no bearing on the present case, he said.
“[D]efendants did not specifically allege in their motions to dismiss that there was any conflict among the beneficiaries in this case,” the court explained. “Defendants have only alleged that the ‘potential for conflicts' should negate the imposition of a duty.”
“Therefore, we make no determination as to the scope of an attorney's duty in a wrongful death action when a conflict among the beneficiaries is specifically alleged,” the court said.
Roetzel & Andress LPA represented the plaintiff. The defendants were represented by Mulherin, Rehfeldt & Varchetto P.C. and Konicek & Dillon P.C.
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Copyright 2014, the American Bar Association and The Bureau of National Affairs, Inc. All Rights Reserved.
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