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10/27/89 Barbara G. Barth, v. James J. Reagan

October 27, 1989

BARBARA G. BARTH, PLAINTIFF-APPELLEE

v.

JAMES J. REAGAN, DEFENDANT-APPELLANT



APPELLATE COURT OF ILLINOIS, SECOND DISTRICT

546 N.E.2d 87, 190 Ill. App. 3d 516, 137 Ill. Dec. 463 1989.IL.1709

Appeal from the Circuit Court of Lake County; the Hon. Michael J. Fritz, Judge, presiding.

APPELLATE Judges:

JUSTICE REINHARD delivered the opinion of the court. UNVERZAGT, P.J., and WOODWARD, J., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE REINHARD

Plaintiff, Barbara G. Barth, filed suit in the circuit court of Lake County against defendant, James J. Reagan, seeking recovery, under a theory of attorney malpractice, for the loss of equity in certain real estate properties allegedly resulting from defendant's negligence in the defense of foreclosure actions on the properties. Plaintiff's second amended complaint contained counts against Northbrook Trust & Savings Bank, but the circuit court dismissed these counts, and its judgment was affirmed by this court in Barth v. Reagan (1986), 146 Ill. App. 3d 1058, 497 N.E.2d 519. The cause proceeded to a jury trial on plaintiff's fourth amended complaint, and, following a jury verdict for plaintiff, judgment was entered on the verdict in the amount of $48,604.90, representing $69,435.57 total damages reduced by 30% representing plaintiff's contributory negligence.

The issues raised by defendant on appeal are: (1) whether the circuit court erred in submitting the issue of attorney malpractice to the jury without the expert testimony of an attorney witness; (2) whether the circuit court erred in permitting plaintiff to use an expert real estate appraiser as a witness who had not been disclosed; and (3) whether the circuit court erred in allowing damages in the nature of economic loss to stand in this action based on negligence.

Plaintiff's fourth amended complaint alleged, in pertinent part, that defendant owed plaintiff a duty to notify her and keep her fully informed of the status of litigation involving her property; that defendant owed plaintiff a duty to advise her of her rights and obligations with respect to such actions; and that defendant negligently failed to inform plaintiff of the pendency of foreclosure actions against her property, or to advise her of her right to cure defaults or redeem the property. The complaint also alleged that defendant breached a duty to plaintiff in that certain of his employees notarized documents purporting to bear plaintiff's signature which were not signed in their presence, and in doing so prevented plaintiff from learning of pending foreclosure actions against her property.

Evidence adduced at trial establishes the following facts. Plaintiff is a licensed real estate agent and broker currently living in Arizona. Plaintiff was first licensed as an agent in 1970. Prior to 1986, plaintiff lived in Glenview, Illinois, where she had been employed as a realtor.

In the summer of 1976, plaintiff and her husband at that time, Edward Barth, consulted defendant about purchasing rental properties for investment purposes. They informed defendant that they intended for Edward to manage the property, to collect rent, and to make mortgage payments. Defendant suggested that the properties and the Barths' residence, purchased by plaintiff prior to her marriage to Edward, be placed into land trusts, with plaintiff holding the beneficial interests. Defendant stated that he would direct that inquiries regarding the trusts be sent to him. Later in 1976, the Barths purchased two investment properties, located at 1128 and 1130 Inverrary in Deerfield, Illinois. These properties and the Barths' residence were placed into land trusts in which plaintiff held the entire beneficial interests and Edward Barth was given the power of direction. The trust agreements were prepared by defendant. In 1977, the Barths purchased a third investment property located at 1420 Wilshire Drive in Vernon Hills, Illinois.

Subsequently, foreclosure actions were instituted with respect to all the properties. Defendant testified that he became aware of the foreclosure proceedings when Edward Barth brought the summonses in those actions into his office. Defendant entered appearances on behalf of plaintiff and her husband in three foreclosure actions in Lake County and filed answers in certain of the actions. Two of the answers bore signatures purporting to be plaintiff's and were notarized by employees of defendant. The evidence does not disclose the circumstances under which the employees notarized the signature.

Plaintiff testified that she was unaware that any foreclosure action had been instituted until June 1, 1981, when her husband told her "the properties are all gone." Plaintiff telephoned defendant, who also told her the properties were "gone." Plaintiff met with defendant the following day at his office. Plaintiff testified that she asked defendant why he did not inform her of the foreclosure proceedings. Defendant responded that "he couldn't" without further explanation. According to plaintiff's daughter, also present at the meeting, defendant said Mr. Barth had told him not to inform plaintiff. Plaintiff testified that she did not sign the answers in the foreclosure actions purporting to bear her signature and that defendant had never personally consulted or spoken with her in connection with the foreclosures prior to June 2, 1981. Plaintiff further testified that she had not been served with summons in any of the foreclosure proceedings. In at least one of the foreclosures, the summons was apparently served on plaintiff by substitute service on her husband., Plaintiff and Edward Barth were divorced in April 1982, and Edward's whereabouts at the time of trial were unknown.

Defendant, called by plaintiff as an adverse witness, testified that he never personally met with plaintiff nor did he telephone her to advise her of the foreclosure proceedings or any right she might have to cure the defaults. However, defendant sent letters concerning the foreclosures which were addressed jointly to plaintiff and her husband. One of the letters dated October 9, 1980, indicated that a sheriff's sale of the marital residence located at 1817B Wildberry had been conducted and Mr. and Mrs. Barth had 90 days within which to redeem the property. Another letter dated October 15, 1980, referred to "various litigation matters" and indicated that the property at 1130 Inverrary Lane had been sold and the redemption period would expire on November 1, 1980. The letter also indicated that a sheriff's sale of the property at 1128 Inverrary was imminent. Defendant testified that he set up a series of appointments with Mr. Barth to bring plaintiff in, but they never came in. Defendant denied telling plaintiff at the June 2, 1981, meeting that he "couldn't" tell her about the foreclosures previously. Rather, defendant testified that he told plaintiff that he had sent her numerous letters.

Stephen Tennant, an attorney and defendant's associate during the period in question, testified that he was assigned to handle two of the foreclosure actions against the Barths. Tennant met with Edward Barth on at least one occasion and had seen him in the office three or four times between 1979 and 1981. Tennant never saw plaintiff in the office during this period of time. On the occasions when Tennant saw Mr. Barth, he appeared intoxicated. According to Tennant, defendant also represented the Barths in connection with criminal charges of failure to file tax returns and represented Mr. Barth in a traffic matter. Tennant testified that the checks Mr. Barth tendered to pay his bill from defendant were returned N.S.F., and ...


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