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Statute of repose bars legal malpractice claim
A plaintiff who sued a lawyer for malpractice in the preparation of a quitclaim deed was too late because any injury occurred when the deed was prepared, not later when her husband died.
Holding that the statute of repose barred the plaintiff's action, the Illinois Supreme Court has upheld the 2-619 dismissal of an action for legal malpractice. The case is Snyder v Heidelberger, 2011 WL 2410396 (Ill Sup Ct 2011).
The case illustrates a potential peril of preparing a quitclaim deed. The plaintiff, Judith Snyder, alleged that in May of 1997, her husband, Wilbert, retained Heidelberger, an attorney, to prepare a quitclaim deed conveying their marital home, which he alone owned, to both of them as joint tenants with right of survivorship. Heidelberger did so, and the deed was recorded.
Wilbert died in December 2007. After that, Judith alleged, she learned that it was not Wilbert but a trustee in a land trust who held the title to their home. Wilbert's son, Steven Snyder, Judith's stepson, was the sole beneficiary of the land trust.
Steven filed a forcible entry and detainer action to evict Judith. Judith, meanwhile, in February 2008, filed a two-count complaint against Heidelberger for legal malpractice and against Steven requesting the imposition of a constructive trust on the property. She alleged that Heidelberger knew that Wilbert intended her to benefit from what Wilbert had retained him to do, so that she was a third-party beneficiary of the representation.
Heidelberger moved to dismiss the count directed against him, alleging, among other things, that it was barred by the six-year statute of repose applicable to legal malpractice actions. 735 ILCS 5/13-214.3(c). The circuit court granted the motion. The appellate court reversed, and the supreme court granted Heidelberger's petition for leave to appeal.
Quitclaim deed preparation: an "immediate benefit"
The court began by noting that 735 ILCS 5/13-214.3 sets forth both the limitations and the repose periods for legal malpractice actions. Subsection (b) of that paragraph, which incorporates the discovery rule, provides that the limitations period is two years from the time the person bringing the action knew or reasonably should have known of the injury. Subsection (c) provides that in any event, no action described in subsection (b) may be commenced more than six years after the date of the act or omission. Subsection (d) provides that when the injury caused by the act or omission does not occur until the death of the client, the action may be commenced within two years after the date of that person's death, absent probate proceedings which may extend that time.
The court agreed with Heidelberger that the injury alleged, the negligent preparation of the quitclaim deed, occurred when he prepared the deed, not when his client died. Though Judith conceded that an injury did occur at that time, she argued that an additional injury occurred when her husband died. It was at that latter time, Judith argued, that the statute of limitations should have begun to run under section 13-214.3(d).
The court distinguished its opinion in Wackrow v Niemi, 231 Ill 2d 418 , 899 NE2d 273 (2008), in which it held that the statute of limitations for a legal malpractice action arising out of an amendment to a living trust did not begin to run until the death of the attorney's client. The services Heidelberger rendered to Wilbert were intended to have an immediate benefit during Wilbert's lifetime, for the right of survivorship arising out of conveying a property into joint tenancy is a present, not a future, interest, the court said. It also said the statutory wording "the injury" in subsection (d) indicated that the legislature contemplated that only a single injury would trigger that extended limitations period.
Justice Freeman filed a dissent. Quoting from Northern Illinois Emergency Physicians v Landau, Omahana & Kopka, Ltd, 216 Ill 2d 294, 837 NE2d 99 (2005), he observed that the court had previously held that a cause of action for legal malpractice requires actual, existing damages in the form of a monetary loss. The mere possibility of harm or speculative damages will not permit a plaintiff to maintain a legal malpractice action. Judith suffered no pecuniary injury when Heidelberger executed the quitclaim deed, Freeman said.
Freeman also said the majority's opinion did not make clear how either Judith or Wilbert would have discovered the alleged negligence before Wilbert's death. Though Freeman acknowledged the couple could have had a title search done on the property to check up on their attorney's work, "lay people seeking legal advice from Illinois should not have to do this in order to protect themselves from malpractice," he said.
Freeman also opined that the majority's opinion
frustrates the very reasons for the relaxation of the privity rule, i.e., to provide a remedy to those third parties injured by an attorney's negligence in the estate planning of another. In such cases, it is almost certain that any negligence on the part of the attorney will only be discovered after the client's death, when the injury becomes apparent and, more importantly, can no longer be remedied by the client, who has passed away.