The Featured Case: Brannen v. Siefert, 2013 IL App (1st) 122067, ¶ 52 (11.19.13)
The Facts: Plaintiffs – a land trustee and trust beneficiary – sued the Underlying Defendants, an attorney and his wife, for breach of a written real estate contract for the purchase of a home owned by the plaintiffs. The strangely worded contract, drafted by Underlying Defendants, called for staggered payments of interest and principle over a several-year period to be credited towards the home’s purchase price.
The Underlying Defendants quickly breached and plaintiffs hired an attorney (the Former Attorneys) to collect the amounts owed under the contract.
The Former Attorneys (a solo practitioner and his professional corporation), unbeknownst to plaintiffs, declared a forfeiture of the contract by written notice to Underlying Defendants. Several months later, the Underlying Defendants moved out. At the time they vacated the property, the Underlying Defendants owed plaintiff about $150,000 and hadn’t made any payments for over two years.
The Underlying Case
Displeased with Former Attorneys’ performance, plaintiffs hired substitute counsel who filed a breach of contract suit against Underlying Defendants to recover past and future payments owed under the real estate contract. The Underlying Defendants successfully moved to dismiss the lawsuit based on the Former Attorneys prior forfeiture notice. The court found that the Underlying Defendants’ forfeiture remedy foreclosed a damages action by the plaintiffs. The plaintiffs then sued the Former Attorneys for legal malpractice.
The Malpractice Suit
The thrust of plaintiff’s malpractice suit was that the Former Attorneys committed professional negligence by giving up plaintiffs’ contract rights without first consulting them and by failing to explain the legal effect of that remedial choice. The Former Attorneys argued they did explain how a forfeiture would impact plaintiffs’ rights and that cancelling the contract was the proper remedy since plaintiffs’ primary goal was to retake the property; not recover damages.
After a trial, a jury entered judgment against the Former Attorneys for $199,500 and they appealed.
In Illinois, a legal malpractice plaintiff must establish: (1) an attorney owed the plaintiff’s a duty arising from the attorney-client relationship; (2) the attorney breached that duty; (3) the attorney’s breach of duty proximately caused actual damages to the plaintiff. Expert testimony is usually required to prove that an attorney breached his professional duties to his client. ¶ 45, 61.
A legal malpractice plaintiff must prove not only that he would have won the underlying case but that the underlying defendant was solvent enough to pay a judgment. But the required solvency showing isn’t stringent: the plaintiff doesn’t have to prove a defendant’s net worth but only needs to show the defendant’s ability to at least partially pay a judgment. ¶ 63.
The jury found the plaintiffs’ expert more believable than the Former Attorneys’. Plaintiffs’ expert testified that contractual forfeiture was the wrong remedy since under the Illinois Forcible Entry and Detainer Act (the “Forcible Act”) a contract seller like plaintiffs can sue for both possession and money damages. 735 ILCS 5/9-102(a)(5), 9-209 (plaintiff can sue for possession and damages). The plaintiffs’ expert also testified that by declaring a forfeiture – when both Illinois law and the subject real estate contract allowed multiple remedies – the Former Attorneys prevented the plaintiffs from recovering nearly $150,000 in money damages. ¶¶ 46-49.
The Court also found that plaintiffs established the Underlying Defendants’ solvency. The trial evidence demonstrated that the Underlying Defendants could at least partially pay a judgment based on their income and other assets. ¶ 65. Because the plaintiffs proved each element of their legal malpractice case, the First District affirmed the jury verdict for the plaintiffs.
Take-aways: (1) To win the legal malpractice ‘case within the case’, a malpractice plaintiff must prove he would have won the underlying case but doesn’t have to precisely prove the malpractice defendant’s net worth. It is enough to show that the defendant has a source of income and is able of paying all or part of a judgment; (2) The Forcible Act provides for possession and money damages to a contract home seller where a buyer breaches an installment sales contract; and (3) the forfeiture remedy should be exercised with extreme caution. That’s because if you nullify a contract, it can bar a later action to recover money damages for breach of contract.