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Landreth v. Raymond P. Fabricius, PC

Court of Appeals of Illinois, Third District

May 29, 2018

JOHN COLT LANDRETH, an Illinois, Citizen, Plaintiff-Appellee,
v.
RAYMOND P. FABRICIUS, PC, Defendant-Appellant, and Keith R. Leigh, an Illinois citizen; Anita L. Kopko, an Illinois citizen; Pool, Leigh & Kopko, P.C., an Illinois professional corporation; Pool, Leigh & Fabricius, an Illinois professional corporation; City of Ottawa, an Illinois municipal corporation, Defendants.

          Appeal from the Circuit Court of the 13th Judicial Circuit, LaSalle County, Illinois, Circuit Nos. 09-L-13, 09-L-27 Honorable William S. McNeal, Judge Presiding.

          JUSTICE HOLDRIDGE delivered the judgment of the court, with opinion. Justices Schmidt and Wright concurred in the judgment and opinion.

          OPINION

          HOLDRIDGE JUSTICE

         ¶1 The plaintiff, John Colt Landreth (Landreth) sued the defendant, the law firm of Pool, Leigh, and Fabricius (PLF), for professional negligence, fraud, and other claims arising out of PLF's alleged legal representation of Landreth. Landreth later added a claim for derivative liability against Raymond P. Fabricius, P.C. (Fabricius) alleging that, as a former partner of PLF, Fabricius was jointly and severally liable for any judgment entered against PLF for professional negligence and negligent misrepresentation. Fabricius moved to dismiss certain counts of Landreth's second amended complaint as untimely under section 2-619 of the Illinois Code of Civil Procedure (Code) (735 ILCS 2/619 (West 2012)). The trial court denied Fabricius's motion. Thereafter, the trial court granted Landreth's motion for a summary determination that Fabricius was jointly and severally liable for PLF's debts under 735 ILCS 5/2-1005(d) (West 2012) and, upon Landreth's motion, entered a default judgment against PLF. Landreth subsequently filed a motion for summary judgment as to Fabricius's liability to Landreth, which the trial court granted.

         ¶2 More than one year later, Fabricius moved for summary judgment as to liability, arguing that Landreth's claims against Fabricius were untimely under section 214.3 of the Code of Civil Procedure (Code) (735 ILCS 5/13-214.3(c) (West 2012) (which governs claims of attorney malpractice) or under the judicially-created "reasonable time" exception to section 215 of the Code (735 ILCS 5/13-205 (West 2012)). Landreth moved to strike Fabricius's motion on the ground that Fabricius had waived such affirmative defenses or, in the alternative, that these defenses belonged to PLF, and PLF had waived them. The trial court granted Landreth's motion to strike Fabricius's motion, holding that Fabricius's motion was untimely and that the arguments asserted in Fabricius's motion had been waived. The trial court subsequently entered a final judgment against Fabricius.

         ¶3 In this appeal, Fabricius argues that the trial court erred by: (1) denying Fabricius's motion to dismiss Landreth's claims against Fabricius on statute of limitations grounds; (2) summarily determining that Fabricius is jointly and severally liable for the professional negligence and negligent misrepresentations of PLF; and (3) granting Landreth's motion for summary judgment against Fabricius as to liability. Fabricius also argues that the trial court abused its discretion by striking Fabricius's motion for summary judgment.

         ¶4 FACTS

         ¶5 On August 5, 2003, Landreth and the City of Ottawa (the City) executed a consulting agreement wherein the City engaged Landreth to provide real estate consulting, marketing, and development services. The agreement was drafted by Keith Leigh (Leigh), an attorney who Landreth alleged was with PLF. The agreement stated that the parties had "jointly utilized the law firm of [PLF] with respect to this Agreement." The agreement provided that it was binding on both parties and that it did not violate any presently-existing provision of law. Both parties performed under the agreement for approximately two years. Thereafter, the City stopped paying Landreth commissions and refused to pay him certain development fees he had earned pursuant to the agreement.

         ¶6 In February 2007, Landreth sued the City for breaching the consulting agreement. On or about April 4, 2007, the City moved to dismiss Landreth's suit, arguing for the first time that the agreement was void ab initio because there was no prior appropriation for the agreement, as required by the Municipal Code. On February 28, 2008, a court order was entered dismissing Landreth's breach of contract claim on the ground that the agreement violated certain requirements of the Municipal Code and was therefore void ab initio.[1]

         ¶7 In January and February, 2009, Landreth filed two lawsuits in the circuit court of LaSalle County which gave rise to the instant appeal. On January 27, 2009, Landreth filed a tort lawsuit (Case No. 09-L-13) against various defendants, including the City, Leigh, and Pool, Leigh, & Kopko, P.C., which Landreth alleged was formerly known as "Pool & Leigh, P.C." The complaint asserted claims of fraud against all the defendants, negligence against the City, and negligent misrepresentation against Leigh and Pool & Leigh, P.C. In February 2009, Landreth filed a legal malpractice lawsuit (Case No. 09-L-27) against Leigh and Pool, Leigh, & Kopko, P.C., which Landreth alleged was formerly known as "Pool & Leigh, P.C." In that lawsuit, Landreth alleged "on information and belief" that, prior to February 1, 2006, Pool & Leigh, P.C. "was associated with Raymond P. Fabricius, P.C." and "did business under the name Pool, Leigh, and Fabricius." The complaint alleged fraud against all the defendants, negligence against the City, [2] and negligent misrepresentation against Leigh and Pool & Leigh, P.C. Fabricius was not named as a defendant in either the tort lawsuit or the legal malpractice lawsuit.

         ¶8 Upon Landreth's request, the trial court consolidated Landreth's tort and legal malpractice lawsuits on November 10, 2011. That same day, Landreth filed a second amended complaint which combined all of his prior claims. In the second amended complaint, Landreth named Fabricius as a defendant for the first time. He asserted claims for fraudulent misrepresentation and fraudulent concealment against the City and the attorney defendants. He further asserted claims for breach of fiduciary duty, professional negligence, negligent misrepresentation, and "owner and successor liability" against the attorney defendants. The second amended complaint did not allege that Fabricius ever personally represented Landreth. Nor did it allege any specific fraudulent or negligent statements, concealments, or misrepresentations made by Fabricius, nor any specific acts of professional negligence committed by Fabricius. Landreth's claims against Fabricius were entirely derivative; i.e., Landreth claimed that Fabricius was liable solely because of Fabricius's status as a member or partner of PLF, which, Landreth alleged, was either a partnership or an unincorporated association organized for pecuniary profit.

         ¶9 On March 23, 2012, Fabricius moved to dismiss several counts of Landreth's second amended complaint pursuant to section 2-619 of the Code (735 ILCS 2/619 (West 2012)) on the ground that the claims pled against Fabricius were barred by the applicable statute of limitations. Fabricius's motion did not identify any specific statute of limitations, and Fabricius did not file a memorandum of law in support of its motion or identify any legal authorities supporting the application of any particular statute of limitations. The trial court initially ruled that Landreth's claims against Fabricius were time-barred under the six-year statute of repose governing claims of attorney malpractice (735 ILCS 5/13-214.3(c) (West 2012)) and granted Fabricius's motion to dismiss with prejudice. However, after Landreth moved for reconsideration, the trial court reversed its prior ruling and held that Landreth's claims against Fabricius were timely because: (1) Fabricius's claims were governed either by the five-year limitations period prescribed by 735 ILCS 5/13-205 (West 2012) (the "catch-all" statute of limitations that applies to "all civil actions not otherwise provided for") or the five-year limitations period prescribed by 735 ILCS 5/13-215 (West 2012) (which applies where there has been fraudulent concealment of a cause of action by the defendant); and (2) Landreth's claims against Fabricius accrued (and the limitations period began to run) fewer than five years before Landreth asserted them. Accordingly, the trial court denied Fabricius's motion to dismiss.

         ¶10 In August of 2012, Landreth sought and obtained leave to file a third amended complaint.[3] The third amended complaint repeated the allegations contained in the second amended complaint regarding Fabricius's derivative liability for PLF's debts. It did not change any claims from the second amended complaint other than Landreth's claims against the City.

         ¶11 On September 14, 2012, the trial court entered an order dismissing with prejudice Landreth's claims against defendants Anita L. Kopko and Pool, Leigh, & Kopko, P.C. and entering a consent judgment in favor of Landreth and against defendant Leigh.

         ¶12 On October 5, 2012, the defendant filed his Answer to Landreth's third amended complaint. Fabricius's Answer did not assert any affirmative defenses. However, during a status conference approximately 10 months after Fabricius filed his Answer, the trial court granted Fabricius leave to file an affirmative defense "to preserve for appeal" the issue of whether the limitations provisions prescribed by section 214.3 of the Code were applicable to Landreth's derivative liability claims against Fabricius. The court noted that it was allowing this only for purposes of appeal since it had already ruled on the issue of the applicable statute of limitations. Pursuant to the trial court's order, Fabricius subsequently filed an affirmative defense stating that: (1) section 214.3 provides that actions against an attorney arising out of an act or omission in the performance of professional services must be commenced within two years from the time the plaintiff knew or reasonably should have known of the injury for which damages are sought, and, in all events not more than six years after the date of which the act or omission occurred; and (2) because the acts or omissions on which Landreth's allegations against Fabricius are premised occurred in 2003, some or all of Landreth's causes of action against Fabricius are "barred by the statute of limitations prescribed by 735 ILCS 5/13-214.3." Fabricius did not identify in its affirmative defense when Landreth "knew or reasonably should have known of the injury for which damages are sought." Nor did Fabricius argue that Landreth had such knowledge more than two year before he filed suit against Fabricius. Because Fabricius's affirmative defense focused only on when the defendants' allegedly negligent acts or omissions occurred (as opposed to when Landreth discovered his injury), Fabricius's affirmative defense appeared to be based entirely on section 214.3(c)'s six-year statute of repose (which Fabricius erroneously referred to as a "statute of limitations.") Moreover, Fabricius's affirmative defense did not assert that section 215 of the Code, which tolls statutes of limitation and repose in cases involving fraudulent concealment by the defendant, should not apply to Landreth's claims against Fabricius.

         ¶13 After the parties had conducted discovery for several months, Landreth moved for a summary determination that Fabricius was jointly and severally liable for PLF's debts, including the alleged professional negligence and negligent misrepresentations of PLF. Landreth argued that there was no genuine dispute of material fact that PLF was either an unincorporated association organized for pecuniary profit, of which Fabricius was a member, or a "partnership by estoppel" pursuant to section 308 of the Uniform Partnership Act (805 ILCS 206/308 (West 2012)), of which Fabricius was a purported partner. Attached to Landreth's motion for summary determination were the affidavits of Landreth and attorney Drew Peel. In Landreth's affidavit, Landreth attested to various documents and communications he received identifying PLF as a law firm, including the consulting agreement. Landreth swore that, from at least June 2003 through November 2011, he believed that "[PLF] was a law firm, that [PLF] was some sort of law firm partnership, that Keith Leigh was a partner in the [PLF] law firm, and that an attorney with the last name of Fabricius also was a partner in the [PLF] law firm." Landreth also averred that, in entering into and performing the agreement, he reasonably relied to his detriment on the representation that PLF was a law firm jointly representing him and the City in connection with the preparation of the consulting agreement, which was represented and warranted to be valid and enforceable and not in violation of applicable law. Peel's affidavit identified several pleadings and other documents filed by PLF.

         ¶14 Landreth also submitted various documents in support of his motion, including: (1) reported decisions of the Illinois Appellate Court (Third District) from January 1998 through June 2008 identifying Fabricius as an attorney with the law firm of PLF; (2) written appearances and other documents filed with state and federal courts identifying Fabricius as an attorney and/or partner with the law firm of PLF; (3) draft easements and draft property agreements provided to Landreth in connection with his work for the City identifying PLF as the preparer of the easements and the law firm to which notices of the property agreements should be sent; (4) admissions by Fabricius that he shared office space, a copy machine, a fax machine, a telephone system and utilities, and other unspecified expenses with P & L from July 1995 until February 2006.

         ¶15 Landreth also moved for a default judgment against PLF as to Landreth's professional negligence and negligent misrepresentation claims. Landreth provided notice and copies of this motion to attorneys for defendants Leigh, Anita Kopko, and Fabricius. The trial court invited Fabricius to file a written opposition to Landreth's motion for default judgment. Fabricius did not file a response or a written objection to Landreth's motion. Nor did Fabricius arrange for counsel to appear on behalf of PLF to oppose the motion.

         ¶16 On October 4, 2013, Fabricius filed its response to Landreth's motion for summary determination. Attached to the response was the affidavit of Raymond Fabricius attesting that: (1) he is the president and sole shareholder of Fabricius; (2) from July 1995 to February 6, 2006, Fabricius and Pool & Leigh, P.C. shared office space and some expenses, but did not share profits, income, or clients, including the City; (3) Fabricius never met with Landreth or the City concerning the matters raised in Landreth's lawsuit, nor did he participate in performing or consulting as to the legal services purportedly provided by Leigh relative to the matter complained of in Landreth's lawsuit. Fabricius's written response to Landreth's motion for summary determination made no mention of Landreth's motion for default judgment against PLF.

         ¶17 On November 22, 2013, the trial court conducted a hearing on Landreth's motions. During the hearing, the trial court again invited Fabricius to be heard on Landreth's default judgment motion against PLF. Counsel for Landreth responded that he "did not think [he had] a legal basis to object to the actual entry of default." However, "given the potential legal ramifications" to Fabricius, counsel asked that the court require proof of the allegations against PLF as well as proof of the allegations against Fabricius.

         ¶18 The trial court granted Landreth's motion for summary determination and ruled that Fabricius was jointly and severally liable for PLF's debts. In so ruling, the trial court found that there was no genuine dispute of material fact that PLF was either an unincorporated association organized for pecuniary profit, of which Fabricius was a member, or a "partnership by ...


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