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Legal Malpractice Suit Can Proceed, Illinois Supreme Court Rules

Jan. 21, 2022, 11:45 PM

Commercial real estate management company Suburban Real Estate Services Inc. will get to pursue its legal malpractice claim against an attorney and his law firm after the Illinois Supreme Court ruled Friday that the claim wasn’t barred by the two-year statute of limitations.

Suburban owner Bryan Barus retained William Roger Carlson Jr. of Carlson Partners Ltd. in May 2010 in connection with the unwinding of Suburban’s relationship with a company, ROC/Suburban LLC, which was formed in 2006 to provide property management services.

ROC/Suburban sued Suburban, and a trial court found Suburban breached its fiduciary duties to ROC/Suburban when it separated. Suburban then filed a legal malpractice claim against Carlson and the firm in 2016, saying its counsel failed to advise on the proper steps for breaking up with ROC/Suburban and recommended actions that resulted in breaches of fiduciary duties in the ROC lawsuit.

The trial court granted summary judgment to the defendants, finding that Barus and Suburban had notice of the malpractice claim as early as 2010, when ROC filed the underlying breach-of-fiduciary-duty lawsuit in connection with the split, and no later than April 2013, when the trial judge said Barus’ counsel “one hundred percent” committed malpractice.

An appellate court reversed, finding that Suburban needed to lose the underlying action to trigger the limitations period. That dispute wasn’t fully resolved until June 2015.

The Supreme Court of Illinois affirmed that appellate decision, saying the claim was timely filed because the clock didn’t start ticking on the legal malpractice claim until there was a Barus and Suburban lost the original action. That’s because the client must demonstrate a monetary loss as the result of an alleged negligent act, the court held.

“Although plaintiffs may have been alerted in April 2013 to the trial court’s assertion that counsel misadvised them in unwinding the company, the possibility of damages would not be actionable unless and until the ROC litigation ended adversely to plaintiffs with a finding that plaintiffs breached their fiduciary duties to ROC/Suburban,” Justice Mary Jane Theis wrote on behalf of the court. “It was not until then that plaintiffs became obligated to pay a sum that they otherwise would not have had to pay but for defendants’ alleged negligence.”

Chief Justice Anne M. Burke and Justices Rita B. Garman, P. Scott Neville Jr., Michael J. Burke, David K. Overstreet, and Robert L. Carter concurred.

Attorney information for the parties wasn’t immediately available.

The case is Suburban Real Est. Servs. Inc. v. Carlson, Ill., No. 126935, 1/21/22.

To contact the reporter on this story: David McAfee in Los Angeles at dmcAfee@bloomberglaw.com

To contact the editors responsible for this story: Rob Tricchinelli at rtricchinelli@bloomberglaw.com; Peggy Aulino at maulino@bloomberglaw.com

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