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09/27/89 Keith Mclane Et Al., v. Fred G. Russell Et Al.

September 27, 1989

KEITH MCLANE ET AL., APPELLEES

v.

FRED G. RUSSELL ET AL., APPELLANTS



SUPREME COURT OF ILLINOIS

546 N.E.2d 499, 131 Ill. 2d 509, 137 Ill. Dec. 554 1989.IL.1502

Appeal from the Appellate Court for the Third District; heard in that court on appeal from the Circuit Court of Peoria County, the Hon. John Gorman, Judge, presiding.

APPELLATE Judges:

JUSTICE WARD delivered the opinion of the court. JUSTICE RYAN took no part in the consideration or decision of this case.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE WARD

The plaintiffs, Keith McLane and Cecil McLane, individually and as executor of the estate of Grace Shugart, who were named beneficiaries under a will, instituted an action for legal malpractice in the circuit court of Peoria County against Fred Russell, the attorney who drafted the will, and his law firm, Johnson, Martin & Russell, a professional corporation. Following trial, the jury returned a verdict for the plaintiffs in the amount of $325,000. The trial court granted the defendants' motion for setoff and reduced the verdict by one-half of the amount the plaintiffs received in a pretrial settlement with the estate of a sister of the testator, against which the plaintiffs had filed a suit. Upon the defendants' appeal and the plaintiffs' cross-appeal, the appellate court affirmed. (159 Ill. App. 3d 429.) We allowed the defendants' petition for leave to appeal (107 Ill. 2d R. 315).

The plaintiffs, Cecil McLane and his son, Keith, were tenant farmers on a 240-acre farm located in Bureau County owned by Grace and Helen Shugart, two unmarried sisters. In 1942, the Shugart sisters executed wills in which they left all of their property to each other. In 1958, attorney Fred Russell, a defendant in this action, began to represent Grace and Helen Shugart. At their request, Russell placed their farm in joint tenancy ownership with right of survivorship. In 1961, Russell drafted a new will for Grace under the terms of which all her property was left to Helen. Helen was adjudicated incompetent in 1971 and Russell was appointed her conservator. Subsequently, Grace went to the defendant's office and discussed methods of leaving the farm to the McLanes.

In 1975, Russell drafted a new will for Grace which contained the following paragraph:

"ARTICLE XI

I devise and bequeath unto CECIL McLANE, who has worked for me and my sister, Helen R. Shugart, and been our farm tenant for a period of over 28 years, a life estate in my interest in the home farm situated in . . . Bureau County, Illinois, containing 240 acres, more or less, for him to use and to receive all income therefrom for and during his lifetime; he, however, to pay the taxes and to keep the improvements adequately insured and maintained during his tenure as life tenant. Upon the demise of the said Cecil McLane, I hereby devise unto his son, KEITH McLANE, the remainder of my interest in said real estate."

In 1976, Russell revised Grace's 1975 will, making some minor changes unimportant here, but leaving unchanged the provision devising a life estate of Grace's interest in the farm to Cecil McLane and a remainder interest to Keith McLane. The joint tenancy in the Shugart farm was never severed. Upon Grace's death in 1977, legal title to the farm passed by operation of law to the surviving joint tenant, Helen Shugart. On Helen's subsequent death, title to the farm transferred by intestate succession to the Shugarts' cousins in fee simple.

The plaintiffs, Cecil and Keith McLane, brought this legal malpractice action in the circuit court of Peoria County. The plaintiffs alleged that Russell was negligent in failing to sever the joint tenancy between the sisters, in failing to advise Grace that a severance of the joint tenancy was necessary to devise her interest in the farm to the plaintiffs, and in drafting a will which operated to defeat Grace's testamentary intent. The plaintiffs claimed that Russell's negligence permanently deprived them of Grace's interest in the farm and they claimed damages in the amount of one-half of the value of the Shugart farm.

Following a four-day trial, the jury returned a verdict for the plaintiffs in the amount of $325,000, representing one-half of the value of the farm. The trial court allowed the defendants' motion for a setoff, and reduced the verdict by one-half of the amount the plaintiffs received in settlement of their suit against Helen Shugart's estate, thereby reducing the damage award to $258,545.

The defendants appealed, claiming inter alia that venue was improper in Peoria County, and that the plaintiffs were not intended beneficiaries of the attorney-client relationship between Russell and Grace and had no right to bring an action for legal malpractice against the defendants. The plaintiffs cross-appealed, claiming that the defendants were not entitled to a setoff and requesting reinstatement of the judgment ...


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