In Illinois, an action against a lawyer "arising out of an act or omission in the performance of professional services" can’t be brought more than 6 years after the act or omission occurred. 735 ILC 5/13-214.3.
But does the statute apply if the plaintiff is someone other than the client? The Illinois Supreme Court will soon answer that question in Evanston Insurance Co. v. Riseborough, the final new civil case added to the docket during the September term.
Evanston arises from an injury on a warehouse construction site. The defendants represented the general contractor. The general contractor’s primary insurer filed a declaratory judgment action seeking a finding of no coverage, and each of the sub-contractors’ insurers joined. Ultimately, all of the insurers joined in what’s called a "Fund and Fight" Settlement — essentially, the claimants are paid and the parties contributing to the settlement litigate policy and coverage defenses against each other. The defendants signed the Fund and Fight on behalf of the general contractor.
But the "Fund and Fight" settlement rapidly unraveled. First, the plaintiff insurer alleged that the general contractor’s insurer had to exhaust its coverage before the plaintiff owed a dime. In response, the general contractor itself filed an affidavit stating that the defendant lawyers didn’t have authority from their client to settle in the first place. The plaintiff insurer and the general contractor’s insurer settled with each other, but then the general contractor’s insurer went into liquidation, and their check bounced.
So the plaintiff insurer sued the defendants, the general contractor’s lawyers, alleging that they didn’t have authority to settle. The plaintiff purported to state claims for breach of the implied warranty of authority, fraudulent misrepresentation and negligent misrepresentation. The defendants moved to dismiss, arguing that the complaint was barred by the 6-year statute of repose under 735 ILCS 5/13-214.3. The trial court agreed and tossed the case out.
In several cases over the past two decades, courts in Illinois have narrowly interpreted Section 214.3, drawing a distinction between actions for professional negligence and third-party actions for other types of torts alleging breach of different duties. For example, in Bova v. U.S. Bank, N.A., the Federal district court refused to bar an action against defendants based on violation of the Illinois Consumer Fraud and Deceptive Business Practices Act. In Ganci v. Blauvelt, the defendant filed a third-party complaint against his deceased mother’s attorney, alleging that the attorney shared culpability for the injuries sustained by the plaintiff children. Following Bova and Ganci, the Evanston Court reversed the Circuit Court, holding that the plaintiff’s complaint sounded in negligent misrepresentation, not professional negligence, and was therefore not barred by the statute of repose.
We expect Evanston to be decided in the first half of next year.