The ABA/BNA Lawyers’ Manual on Professional Conduct™ is a trusted resource that helps attorneys understand cases and decisions that directly impacts their work, practice ethically, and...
Oct. 4 --A malpractice plaintiff's complaint alleging that his former counsel failed to raise certain meritorious defenses or claims in underlying litigation should not have been dismissed on the basis of the judgmental immunity doctrine, the Illinois Appellate Court decided Sept. 30 (Nelson v. Quarles and Brady, LLP, Ill. App. Ct. 1st Dist., No. 1-12-3122, 9/30/13).
After reviewing cases from Illinois and elsewhere, the court concluded that the judgmental immunity doctrine did not apply to invalidate the plaintiff's malpractice claim at this early stage. There was no evidence, at least yet, that the defendant made any conscious choice not to assert the claims or defenses that the plaintiff contends should have been advanced, Justice James R. Epstein said.
Quarles and Brady, LLP represented Kenneth Nelson in federal litigation with Richard Curia over the ownership of two automobile dealerships. The two men disputed the terms of a stock purchase agreement they entered in 1989 and then modified several times over the next decade. Quarles and Brady argued on Nelson's behalf that the 1993 modification agreement replaced the 1989 options.
The district court granted summary judgment for Curia after concluding that the contract and its modifications gave him the option to purchase the remaining shares in one of the dealerships. On appeal the decision was reversed and remanded after Nelson changed counsel; in the meantime, however, he allegedly was forced to sell his shares to Curia and was unable to regain his majority ownership.
In his malpractice action against Quarles and Brady, Nelson alleged that the firm's “negligent and careless conduct included but is not limited to the complete failure to assert a meritorious cause of action against Curia on [plaintiff's] behalf and the complete failure to assert meritorious defenses to Curia's alleged causes of action.”
The trial court decided as a matter of law that the firm's conduct constituted errors of judgment and not actionable professional negligence.
The appellate court reversed and reinstated the complaint. It cannot be said as a matter of law that Nelson is unable to prove any set of facts from which a jury could find that the firm's alleged negligence in failing to raise additional arguments was the proximate cause of his damages, it concluded.
The court said that although no Illinois decision has used the term “judgmental immunity,” that doctrine is consistent with Illinois case law, which distinguishes between negligence and mere errors of judgment. Illinois decisions have not discussed the concept in great detail, Epstein noted.
Epstein said in general courts in other jurisdictions have discussed judgmental immunity as applying to an attorney's decision in two situations: where the law is unsettled or the decision is tactical.
The court zeroed in on Biomet Inc. v. Finnegan Henderson LLP, 2009 BL 57271, 967 A.2d 662, (D.C. 2009), which embraced the judgmental immunity doctrine for tactical choices based on unsettled law but said this protection is conditioned on the lawyer's acting “upon an informed judgment after undertaking reasonable research” of the facts and relevant legal principles.
Epstein also drew on 7A C.J.S. Attorney & Client §332, at 371 (2004), which states that the doctrine merely recognizes that the trial court may find no liability as a matter of law if the lawyer's actions could not be held negligent under any circumstances, but “if there is a genuine issue of material fact about the reasonableness and care exercised by the attorney, then the issue must be submitted to the jury for determination.”
Quarles and Brady cited Goldstein v. Lustig, 507 N.E.2d 164 (Ill. App. Ct. 1987), for the proposition that a trial court should determine as a matter of law whether the allegations of a complaint amount to no more than allegations of errors in judgment for which no malpractice claim can be stated.
However, the court found Goldstein inapposite and “not the seminal case that defendant portrays it to be.” Epstein agreed with Nelson that the principal basis for the decision in Goldstein was the plaintiff's failure to establish probable cause, not the claim that the lawyer committed an error of judgment, and that the court's observations about lawyer judgment in that case cannot be divorced from the proximate cause issue.
Nelson alleged in his complaint that Quarles and Brady failed to assert meritorious and complete defenses to Curia's attempted exercise of the 1989 options, failed to argue that the writings were ambiguous, and failed to seek enforcement of a 2004 agreement between the two men.
These allegations “go beyond mere errors of judgment by defendant,” the court said. The complaint alleged sufficient facts tending to show that the firm's conduct in the underlying lawsuit fell below the standard of care and that this negligence was the proximate cause of Nelson's damages, Epstein said.
It may be true, the court said, that the law firm considered the other legal theories that Nelson now contends the firm should have advanced but nonetheless made a reasoned judgment and tactical decision to proceed as it did. But alternatively, Epstein said, the firm may not have pursued these other arguments simply because it was unaware of them.
The law firm's argument that its conduct involved at most a mere error of judgment presupposes that an actual decision was made on its part, which is not reflected in the record at this point, Epstein said.
Although the firm made numerous references to its “decision” and “reasoned judgment” to forgo certain arguments and legal theories, “the record is devoid of any evidence that defendant made any strategic decision or informed judgment not to assert the defenses that plaintiff now contends were meritorious and should have been asserted” in the underlying action, Epstein said.
Martin J. Oberman, Northbrook, Ill., argued for Nelson. Michael T. Trucco of Stamos & Trucco, Chicago, argued for Quarles and Brady.
To contact the reporter on this story: Joan C. Rogers in Washington at firstname.lastname@example.org
To contact the editor responsible for this story: Kirk Swanson at email@example.com
Copyright 2013, the American Bar Association and The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)