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Legal Malpractice
Legal Malpractice
Posted by: Jason Reese
August 06, 2008
Illinois Appellate Court Holds That Defendant's Solvency is a Required Element of Plaintiff's Legal Malpractice Action
To plead a cause of action for legal malpractice, a plaintiff must allege facts that support a finding that (1) an attorney owed the plaintiff at duty arising from the attorney-client relationship, (2) the attorney breached that duty, and (3) the attorney's breach proximately caused the plaintiff to sustain damages. Now, The Illinois Appellate Court recently held that the element of solvency is required in a legal malpractice action, as well. This means when a malpractice plaintiff seeks to recover for loss of a cause of action, he must adequately allege and later prove that the defendant in the underlying lawsuit would have had sufficient funds to compensate him had the attorney's negligence not come into play and the plaintiff prevailed. The Appellate Court elaborated, stating the plaintiff need only show that the underlying defendant would have been capable of paying some of the damages at some point between the attorney's malpractice and the end date of the judgment's enforceability. See, Visvardis v. Ferleger, PC (1st Dist. 2007).
Legal Malpractice
Posted by: Jason Reese
August 06, 2008
Failure to List Legal Malpractice Lawsuit as an Asset In a Bankruptcy Leads to Dismissal of Lawsuit
An article in the Chicago Daily Bulletin concerning a decision by the Illinois Appellate Court was discussed dealing with the failure to schedule legal malpractice claims in a bankruptcy. According to the article, the Illinois Appellate Court dismissed a couple's legal-malpractice lawsuit based on a lack of standing because of their failure to list the cause of action as an asset during their bankruptcy proceeding. The Court wrote that when a debtor files a bankruptcy petition, he must file a schedule of assets and liabilities, including any cause of action that accrued prior to the bankruptcy filing. A trustee is then assigned to handle the debtor's property, with the trustee having the exclusive right to pursue the causes of action listed in the bankruptcy schedule. The Court further explains that a trustee can abandon a scheduled asset, but if an asset is not properly scheduled (like in the present case) it is not abandoned when the bankruptcy case is closed. Consequently, if a legal malpractice action is unscheduled in the client's bankruptcy, the claim remains the asset of the bankruptcy estate, not the client, even after the bankruptcy case is closed.
Legal Malpractice
Posted by: Jason Reese
August 06, 2008
An Illinois appellate court recently held that under the doctrine of judicial estoppel, a client's statement in court that she understood and agreed to the terms of her divorce settlement did not bar the client from bringing a legal malpractice claim alleging her attorney failed to conduct adequate discovery and gave her negligent advice.
The doctrine of judicial estoppel is designed to protect the integrity of the judicial process by precluding a party from asserting a position in a judicial proceeding that is totally inconsistent with a position the party asserted in a prior judicial proceeding. In the instant case, the defendant attorney argued that the client's testimony at the divorce settlement prove up hearing that she understood and agreed to the terms of the divorce settlement precluded the malpractice action. The Court rejected this argument finding that because the client's testimony in the dissolution proceeding was predicated on her attorney's negligent failure to conduct adequate discovery and the attorney's negligent advice, the testimony in the prove up was not inconsistent with the allegations of malpractice.
The case probably would have been decided differently if the plaintiff client had alleged in her malpractice action that she did not understand the terms of the divorce settlement; instead it was alleged that the attorney's malpractice prevented the client from making an informed decision as to whether to accept the divorce settlement. See, Wolfe v. Wolfe, 2007 WL 2350187 (Ill.App., Aug. 2007).
*Source: Professional Liability Reporter, Volume 32, Number 10, October 2007
