Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.



November 2, 1995

CHUHAK & TECSON, P.C., et al., Defendants.

The opinion of the court was delivered by: SHADUR


 Old Republic Insurance Company ("Old Republic") has filed a declaratory judgment action against Chuhak & Tecson, P.C. ("Chuhak Firm"), one of its partners Edwin Josephson ("Josephson") and Josephson's one-time client Michael Kearns ("Kearns"). Old Republic asks this Court to determine that it has no obligation under its Lawyers Professional Liability Insurance Policy No. CUG23235 (the "Policy")--a policy that it issued to provide Chuhak Firm and its partners with legal malpractice coverage--either to defend or to indemnify Josephson against the claims that Kearns has made against Josephson in Circuit Court of Cook County Case No. 95 L 8773 ("1995 Kearns Action").

 Chuhak Firm and Josephson have filed an Answer and Counterclaim, which they followed by filing an alternative motion for judgment on the pleadings or summary judgment, while Kearns has filed an Answer followed by an adoption of the Chuhak Firm-Josephson motion. Old Republic has responded to those motions, and it is plain that the scheduled defendants' replies (which are due November 8) are not required for resolution of the issues. For the reasons stated in this memorandum opinion and order, this Court determines that Old Republic is obligated to defend Josephson in the 1995 Kearns Action. *fn1"

 This matter has been complicated by a prior lawsuit between the parties, stemming from an earlier Complaint brought by Kearns against virtually identical defendants (including Josephson) in Circuit Court of Cook County Case No. 91 L 8429 ("1991 Kearns Action"). As to that 1991 lawsuit, this Court's colleague Honorable Charles Norgle granted summary judgment for Old Republic in this District Court's Case No. 93 C 4407, holding there that Old Republic did not have a duty to defend Josephson because under the allegations of the 1991 Kearns Action Josephson was not an insured under the Policy. *fn2" That, says Old Republic, bars this action under principles of claim preclusion. *fn3"

 Old Republic is simply wrong. It is of course conventional wisdom that claim preclusion cannot bar future litigation between litigants that is based in part or whole on facts that arise after the earlier litigation between them. For recent examples under Illinois law, which both parties have treated as providing the rules of decision here, see such cases as Torcasso v. Standard Outdoor Sales, Inc., 157 Ill. 2d 484, 490-93, 626 N.E.2d 225, 228-29, 193 Ill. Dec. 192 (1993), Mannion Mechanical Serv., Inc. v. Stallings & Co., 189 Ill. App. 3d 1097, 1103, 545 N.E.2d 956, 960, 137 Ill. Dec. 195 (1st Dist. 1989) and cases cited in both. *fn4" And in this instance the 1995 Kearns Action, which forms the gravamen for Josephson's current demand to be defended, includes some critical (and in this case outcome-determinative) allegations that Kearns did not make in his 1991 Complaint on which Judge Norgle based his decision. Hence the decision by Judge Norgle negating Old Republic's obligation to defend the 1991 Kearns Action cannot have preclusive effect here--there is no reason that Old Republic could not be excused from that quite different obligation to defend (assuming for this purpose that our Court of Appeals upholds Judge Norgle's decision) while it still remains duty-bound to defend Kearns' present (and materially different) 1995 lawsuit.

 It is of course true that the conduct on Josephson's part that Kearns complained about in his 1991 lawsuit is the same in generic terms as the type of conduct that Kearns complains about in his new 1995 Complaint: Josephson is charged with having missed a statute of limitations for the assertion of Kearns' personal injury claim arising out of an August 6, 1986 injury while Kearns was working as a carpenter (he fell off a roof under construction). And Kearns still asserts in his 1995 Complaint, as he did in his now-superseded 1991 Complaint, that he retained Josephson (who had originally been a partner in the law firm of Mass, Miller & Josephson) as his lawyer to handle his case. But what Kearns now alleges, as he did not in his 1991 Complaint on which Judge Norgle ruled, is that the applicable statute of limitations may have been a four-year statute expiring on August 6, 1990 (1995 Kearns Complaint P38), rather than the two-year personal injury statute that would have expired on August 6, 1988. And what Kearns further now alleges, as the 1991 Complaint ruled upon by Judge Norgle did not, is that after the Mass, Miller & Josephson firm ceased to operate in 1989 (1995 Complaint P39) Josephson became associated with Chuhak Firm (id. P41) and:


42. That after his association with the firm of Chuhak & Tecson, defendant, Edwin Josephson, committed the acts or omissions described in this complaint as an agent and/or employee of the firm of Chuhak & Tecson.


43. That at the time the alternative statute of limitations expired on August 6, 1990, Defendant, Edwin Josephson, was an agent and/or employee of Chuhak & Tecson.


44. That no lawsuit was filed by Edwin Josephson on behalf of the Plaintiff at any time prior to the expiration of the applicable statute of limitations. *fn5"

 So much, then, for the background against which the parties dispute. How does that impact on Old Republic's duty, or lack of duty, to defend Josephson against Kearns' new 1995 lawsuit? In that respect there are several potentially relevant provisions in the Policy. Chuhak Firm and Josephson point to its Section 3(e) definition of "INSURED," which reads in relevant part:


(1) the NAMED INSURED [Chuhak Firm] and any PREDECESSOR FIRM;


(2) any person or professional corporation who is or becomes a partner, officer, director or employee of the NAMED INSURED but solely while performing PROFESSIONAL SERVICES in connection with the NAMED INSURED'S practice of law.

 For its part, Old Republic seeks to invoke Policy Sections 4(e) and (f), which exclude from coverage:


(e) any CLAIM made by, against or arising out of the conduct of any organization (other than the NAMED INSURED or a PREDECESSOR FIRM) which is owned, controlled, managed or operated by an INSURED or in which an INSURED is a partner or employee;


(f) any CLAIM arising out of an INSURED'S activities and/or capacity as:


(1) an officer, director, partner, trustee, member or employee of any organization (other than the NAMED INSURED or a PREDECESSOR FIRM).

 In response to the Chuhak Firm-Josephson position, Old Republic first says that Policy Section 3(e)(2) does not cover Josephson as an additional insured, so as to require its defense of the 1995 Kearns Action. Why? Because Old Republic urges that Josephson did not represent Kearns "in connection with" Chuhak Firm's practice of law.

 But that contention (like Old Republic's other arguments) is the product of muddied thinking. For present purposes it must be accepted under the teaching of Thornton, Tewes Funeral Home and like cases that, as Kearns now alleges, a four-year statute of limitations and not a two-year statute of limitations made Kearns' claim still viable well into 1990, when Josephson was already a partner in Chuhak Firm. And Josephson then still had the opportunity, as Kearns' lawyer, to bring suit. Josephson's alleged professional omissions in the year 1990 were in law the omissions of Chuhak Firm, for at that time his rendition of legal services was necessarily "in connection with" Chuhak Firm's practice. Chuhak Firm-Josephson Answer P12, which has been incorporated by reference into their Counterclaim, states:


Chuhak & Tecson and Josephson admit the allegations contained in paragraph 12 and state that since March 7, 1989 Josephson has practiced law only as a partner of Chuhak & Tecson, and not with any other firm, nor has Josephson had a side practice at any time relevant to this matter.

 And that statement stands uncontroverted in this action. Earlier Old Republic sought to strike the Chuhak Firm-Josephson Counterclaim and then, after that motion proved unsuccessful, on November 1 it filed its Amended Answer to Counterclaim, incorporating by reference its own Amended Complaint and thus admitting the Answer P12 allegation. *fn6"

 One more related example of Old Republic's false logic bears mention here. Its Mem. 12-14 seeks to emphasize the claimed identity of the "transaction" involved in the 1991 Kearns Action and in the 1995 Kearns Action. But in doing so Old Republic wrongly describes the "transaction" as Josephson's alleged legal malpractice in general terms, glossing over the critical fact that the alleged malpractice that was charged in the 1991 Kearns Action--and on which Judge Norgle based his ruling in the 1993 action between the litigants here--was Josephson's failure to have filed suit before the limitations clock allegedly ran out in August 1988 (when Josephson was a partner in the other law firm), whereas the alleged malpractice for which Josephson and Chuhak Firm now seek a defense in the 1995 Kearns Action was Josephson's failure to have filed suit before the limitations clock allegedly ran out in August 1990 (well after Josephson had become a partner in Chuhak Firm). Hence Judge Norgle's decision that Old Republic need not defend the 1991 Kearns Action cannot possibly be claim-preclusive as to Old Republic's obligation or lack of obligation to defend against the newly-advanced claim in the 1995 Kearns Action. *fn7"

 Because Old Republic has posed the wrong legal question, it has proposed the wrong legal answer. Chuhak Firm and Josephson are not seeking to relitigate the dispute that was decided by Judge Norgle, but are rather attempting to require Old Republic to defend against a new 1995 Complaint that seeks to tag Josephson with liability for professional malpractice commitment while he was a partner in Chuhak Firm. No application of claim preclusion principles is called for in that situation. And the same distinction between the 1995 Kearns Action and the 1991 Kearns Action that had been at issue before Judge Norgle extends the Policy's coverage to Josephson as an additional insured. *fn8"


 Accordingly this Court declares, as stated at the outset of this opinion, that Old Republic must defend Josephson in the 1995 Kearns Action (at least until such time as Kearns' claim that is potentially covered by the Policy may no longer be at issue in that action). As stated earlier, it is too early to determine whether Old Republic will be obligated to indemnify Josephson against any liability that may be adjudicated in the 1995 Kearns Action. That aspect of the respective prayers in the Complaint and Answer is denied with prejudice. And with these declarations having been made, counsel for the parties should be prepared at Old Republic's scheduled motion presentment date on November 7 to discuss the resolution or the Chuhak Firm-Josephson Counterclaim. *fn9"

 Milton I. Shadur

 Senior United States District Judge

 Date: November 2, 1995

Buy This Entire Record For $7.95

Official citation and/or docket number and footnotes (if any) for this case available with purchase.

Learn more about what you receive with purchase of this case.