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Bay Group Healthcare LLC v. Ginsberg Jacobs, LLC

United States District Court, N.D. Illinois, Eastern Division

February 28, 2017

BAY GROUP HEALTH CARE, LLC, et al., Plaintiffs,
GINSBERG JACOBS, LLC, et al., Defendants.


          MARY M. ROWLAND, United States Magistrate Judge

         Plaintiffs Bay Group Health Care, LLC, Norman Bangalan, and Marilyn Banga-lan (Plaintiffs) filed a single-count complaint for legal malpractice against Defendants. On September 2, 2015, this Court dismissed defendants Thomas Lombardo and Tracy Steindel without prejudice. Two defendants remain in the lawsuit: Gabriel Mathless and the law firm of Ginsberg Jacobs (hereafter, “Defendants”). The Defendants have moved for summary judgment. The parties have consented to the jurisdiction of the United States Magistrate Judge pursuant to 28 U.S.C. § 636(c).

         For the reasons set forth below, Defendants' Motion for Summary Judgment is GRANTED.


In March 2011, Open Arms Health Care, Inc. took out a loan from Bridgeview Bank (Bank). (Dkt. 67, ¶ 13). Open Arms issued a promissory note to the Bank evidencing its obligations pursuant to the loan agreement (Note), and each Plaintiff signed a commercial guarantee promising payment on the Note (hereafter, “Guarantees”). (Id. ¶¶ 13-15). Under the terms of the Guarantees, Plaintiffs “irrevocably authorize[d] and empowere[d] any attorney-at-law to appear in any court of record and to confess judgment against [Plaintiffs] for the unpaid amount of this Guaranty…” (Id. ¶ 16). The same provision stated that Plaintiffs “waive[d] and release[d] any and all claims or causes of action which Guarantor might have against any attorney acting under the terms of authority which Guarantor has granted herein arising out of or connected with the confession of judgment hereunder.” (Id.)

         Open Arms failed to make the payments required under the Note. (Id. ¶ 18). Pursuant to the Guarantees, the Bank represented by the law firm Ginsberg Jacobs, filed an action for confession of judgment against each Plaintiff. (Id. ¶ 20). Mathless, an attorney at Ginsberg Jacobs, signed documents confessing judgment on behalf of Plaintiffs. (Id. ¶¶ 21-22). Based on these confessions, on February 28, 2013, the Circuit Court of Cook County entered a judgment in favor of the Bank and against Plaintiffs in the amount of $823, 018.18. (Id. ¶ 23). Plaintiffs were later suc- cessful in moving to disqualify Ginsberg Jacobs as counsel for the Bank and also in vacating the judgment against them in the state court. (Id. ¶ 24; Dkts. 33-3, 33-4).[2]Plaintiffs eventually settled the Bank's claims. (Dkt. 67, ¶ 25).

         Plaintiffs never sought an agreement for legal services from either Ginsberg Jacobs or Mathless. (Id. ¶ 26). Plaintiffs never paid Ginsberg Jacobs or Mathless for legal services. (Id. ¶ 30). Plaintiffs never sought or received legal advice from Ginsberg Jacobs or Mathless, and never divulged or received confidential information. (Id. ¶¶ 27-29). Plaintiffs never had any direct communication with Ginsberg Jacobs or Mathless. (Id. ¶ 31). Plaintiffs never relied on any representation by Defendants that they were Plaintiffs' legal counsel. (Id. ¶ 32).


         Summary judgment is proper only if the “materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations (including those made for purposes of the motion only), admissions, interrogatory answers, or other materials” “shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a), (c)(1)(A); see Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). The Court views the evidence in the light most favorable to Plaintiffs, the nonmov-ing party, and draws all reasonable inferences in their favor. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986); Popovits v. Circuit City Stores, Inc., 185 F.3d 726, 731 (7th Cir. 1999). Once the moving party shows there is no genuine issue of fact for trial, the nonmoving party must come forward with “specific facts showing that there is a genuine issue for trial.” Anderson, 477 U.S. at 250 (citation omitted). To avoid summary judgment, Plaintiffs must produce affirmative evidence and cannot rely on pleadings alone. Id. at 257; see also Celotex, 477 U.S. at 324 (Rule 56 “requires the nonmoving party to go beyond the pleadings and by her own affidavits, or by the depositions, answers to interrogatories, and admissions on file, designate specific facts showing that there is a genuine issue for trial.”) (citation omitted).

         Where the relevant facts are undisputed, questions of law may be decided on summary judgment. Bourke v. Conger, 639 F.3d 344, 347 (7th Cir. 2011); Hamilton v. Commonwealth Edison Co., No. 11 CV 1752, 2011 U.S. Dist. LEXIS 71733, at *4 (N.D. Ill. July 5, 2011). A district court sitting in diversity attempts to predict how the Illinois Supreme Court would decide issues of state law. Woidtke v. St. Clair Cty., 335 F.3d 558, 562 (7th Cir. 2003).


         Defendants move for summary judgment on two grounds: (1) Defendants owed Plaintiffs no duty of care upon which a legal malpractice claim could be premised because there was no attorney-client relationship between Plaintiffs and Defendants; and (2) Plaintiffs waived and released any claim against Defendants under the terms of the Guarantees Plaintiffs signed. (Dkt. 63 at 2-3).

         Plaintiffs respond that they “authorized and empowered” the Bank to retain counsel for them “in the event of a claimed default on the note.” (Dkt. 66 at 5). They contend that when Mathless signed the confessions of judgment on their behalf while representing the Bank, he and his law firm violated Rule 1.7 of Illinois Rules of Professional Conduct of 2010 prohibiting conflicts of interest (hereafter, “Rule 1.7”). (Id. at 3, 6-7). Plaintiffs also argue, based on the state court litigation, that Defendants are equitably estopped from denying the existence of the attorney-client relationship. (Id. at 5). Finally Plaintiffs deny that they waived their claim against Defendants. (Id. at 12-13). This Court finds summary judgment in favor of Defendants is proper.

         A. There are no disputed ...

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