Nelson v. Quarles & Brady LLC

2018 IL App (1st) 171653

No. 1-17-1653

Filed: September 27, 2018

Fourth Division
______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

FIRST DISTRICT

______________________________________________________________________________

KENNETH A. NELSON, ) Appeal from the
) Circuit Court of
Plaintiff-Appellant ) Cook County
)
v. ) No. 16 L 5627
)
QUARLES & BRADY, LLP, ) Honorable
) Lorna E. Propes,

Defendant-Appellee. ) Judge Presiding.

JUSTICE BURKE delivered the judgment of the court, with opinion.
Presiding Justice McBride and Justice Ellis concurred in the judgment and opinion.

OPINION

¶1 Following a bench trial, the circuit court entered judgment in favor of defendant Quarles

& Brady in this legal malpractice claim. The claim was predicated on Quarles & Brady’s

representation of plaintiff Kenneth Nelson in the federal district court in his suit against his

former business partner in two automobile dealerships (the “Underlying Litigation”). The district

court ruled against Nelson, but that decision was reversed on appeal by the Seventh Circuit Court

of Appeals. Rather than pursue further litigation in the federal court on remand, the parties

settled, and Nelson subsequently filed this legal malpractice action against Quarles & Brady. The

circuit court found that Nelson had failed to establish that Quarles & Brady’s representation
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deviated from the standard of care or that Quarles & Brady’s representation proximately caused

him any damages. For the reasons that follow, we affirm the judgment of the circuit court.

¶2 I. BACKGROUND

¶3 A. The Underlying Litigation

¶4 1. Nelson and Curia’s Written Agreements and Stock Purchase Options

¶5 Prior to 1989, Nelson was the sole shareholder in two automobile dealership

corporations: Ken Nelson Auto Plaza, Inc. (Plaza), located in Dixon, Illinois, and Ken Nelson

Auto Mall, Inc. (Mall), located in Sterling, Illinois. The two dealerships carried vehicles from

Toyota, General Motors (GM), Nissan, and Chrysler. In 1989, Nelson hired Richard Curia as

general manager, and the two entered into a stock purchase agreement (1989 SPA) whereby

Curia would be able to acquire a 100% ownership interest in both corporations pursuant to a

series of options. Under the 1989 SPA, Curia would initially pay $100,000 for 1000 shares in

Plaza and 144 shares in Mall. The 1989 SPA also provided Curia with options to purchase

additional shares. The first option permitted Curia to purchase an additional 1000 shares of Plaza

and 144 shares of Mall for an additional $100,000. Under the second option, Curia could

purchase 2009 shares of stock of Plaza and 300 shares of Mall, “which shares with previous

purchased shares would represent 49% of the issued and outstanding shares of capital stock in

said corporations.” This option provided a formula for the purchase price of these shares, which

was based on the corporations’ net worth, accumulated depreciation, “LIFO (last in first out)

reserve,” and the total number of shares in each corporation. To determine the metrics for this

formula, the parties would reference the monthly operating reports issued by GM and Nissan.

¶6 The third and final option provided that “[a]fter exercising the first two options to

purchase as provided in this Agreement, [Curia] shall have a third option to purchase from

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[Nelson] the remaining 4,171 shares of stock in [Plaza] and 612 shares of stock in [Mall]

provided that [Curia] also offer to purchase the land and four buildings of the [Plaza] dealership

*** at its appraised value.” The third option also provided that the purchase price of the shares

would be based on a valuation formula similar to the formula outlined in the second option. The

1989 SPA required Curia to provide written notice of his election to exercise each option.

¶7 In 1993, Nelson and Curia entered into another agreement intended to modify the 1989

SPA (1993 Modification). The 1993 Modification provided that “a mutual mistake of fact was

made by Nelson and Curia in determining the fair market value of the capital stock of [Plaza and

Mall.]” The 1993 Modification was therefore intended to “modify the [1989 SPA] to reflect the

re-evaluation of the minority interest *** and to correct the mutual mistake of the parties.” The

1993 Modification also included a new formula for calculating the price of the shares Curia

could purchase from Nelson. Paragraph 5 of the 1993 Modification was titled “Purchase of

Additional Shares” and provided that:

“Curia shall have the right to purchase additional shares of stock in said

corporations upon those terms and conditions subsequently agreed upon by the parties

hereto. The purchase price for said additional shares of stock shall be determined by

adding to the total net worth of each corporation a figure representing the accumulated

‘LIFO’ (last in first out) reserve and dividing the total sum thereof by the number of

shares of each corporation.”

Nelson testified that in entering into this modification, he and Curia intended to eliminate the

options contained in the 1989 SPA, and that they had the understanding that if Curia wanted to

purchase additional shares, they would be required to enter into a separate agreement. Curia

testified that, at the time they entered into the 1993 Modification, he did not understand what the

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word “subsequently” meant in the first sentence of the Purchase of Additional Shares section.

Curia testified that the 1993 Modification was not intended to eliminate the 1989 SPA options

and that he believed that the 1993 Modification, in conjunction with the options in the 1989 SPA,

would permit him to purchase all of Nelson’s shares. He testified that the parties entered into the

1993 Modification because he believed he had paid too much for the shares he received in the

1989 SPA.

¶8 The parties entered into subsequent written agreements in 1997 (1997 Harkness

Agreement) and 2000 (2000 Agreement). The 1997 Harkness Agreement was drafted when

Harkness purchased shares of Mall in 1997. The 1997 Harkness Agreement provided that it

“supersede[d] all prior agreements and understanding between Nelson and Curia referring to

future purchases of stock of [Mall.]” Harkness subsequently left Mall, and Mall repurchased his

shares.

¶9 In 2000, Nelson and Curia entered into another agreement (2000 Agreement), titled

“Amendment to Modification Agreements.” The 2000 Agreement was drafted, at least in part, to

delineate Curia and Nelson’s intent with respect to the transfer of shares if either of them died.

The 2000 Agreement also provided that Nelson and Curia “had previously entered into [the 1989

SPA] and [the 1993 Modification],” and copies of both were attached as exhibits. The 2000

Agreement provided that if Nelson died while the 1989 SPA and 1993 Modification were “in

force,” Curia must immediately purchase from Nelson sufficient shares in Plaza to make Curia

the majority shareholder. The 2000 Agreement also set out another formula for the purchase

price of those shares and Nelson’s remaining shares, which differed from the formula in the 1989

SPA and 1993 Modification. The 2000 Agreement provided that it was “not a new modification

agreement, but an amendment to the [1989 SPA] and the [1993 Modification].”

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¶ 10 In 2002, Nelson and Curia formed CRANK, LLC (CRANK), which owned all of the real

estate used by the two dealerships. Nelson and Curia each owned 50% of CRANK.

¶ 11 2. The Stock Purchase Negotiations

¶ 12 In 2004, Nelson and Curia began discussions regarding Nelson’s desire to retire and sell

all of his shares in both Plaza and Mall to Curia. According to Nelson, in July 2004, Curia agreed

to buy Nelson’s majority ownership interest in both corporations for $4.2 million. Nelson

testified that the $4.2 million amount was based on the June 2004 GM financial statement and

was calculated using the formula in the 1989 SPA. Nelson testified that this was an oral

agreement and was never memorialized in writing. He contended, however, that evidence of this

oral agreement was present in (1) corporate resolutions from both corporations’ board of

directors to accept the agreement, (2) correspondences from both Nelson and Curia with

automobile manufacturers informing them of the stock purchase agreement and seeking approval

for the transfer of ownership, and (3) a loan commitment document from Fifth Third Bank (Fifth

Third) for $4.2 million obtained at Curia’s request. Curia denied ever agreeing to purchase

Nelson’s shares for $4.2 million.

¶ 13 a. The Directors’ Resolutions and Stockholders’ Minutes

¶ 14 On October 6, 2004, Nelson prepared the Minutes of the Annual Meeting of Stockholders

for Plaza (Stockholders’ Minutes). The Stockholders’ Minutes provided that “Upon motion duly

made and seconded, it was unanimously RESOLVED, that the following conditions of the sale

and transfer of stock from [Nelson] to [Curia] be approved by the Board of Directors.” The

Stockholders’ Minutes then listed nine “conditions.” The first condition provided that the sale of

the stock would be in accordance with the 1989 SPA. The remaining eight conditions provided

that (1) the corporation would provide health care to Nelson and his wife for 10 years, (2) the

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corporation would provide a new vehicle of Nelson or his wife’s choice for 15 years, including

the dealer license plates, (3) the corporation would provide a second vehicle of Nelson’s choice

for 10 years, (4) in the event that Nelson or his wife were unable to drive, the corporation would

provide a driver, (5) the corporation would provide transportation for Nelson and his wife to and

from the airport and vehicles for when they were “in town” as long as Nelson owned part of the

properties that the dealership leased, (6) Nelson would have access to monthly GM financial

statements, (7) the name “Ken Nelson” could be used for the corporation, and (8) a hold

harmless agreement be written for the protection of Nelson and his family members. Nelson

testified that these items represented his “retirement package” and were “perks” that he and

Curia had agreed to after agreeing upon the $4.2 million purchase price. Nelson signed the

Stockholders’ Minutes, but Curia did not.

¶ 15 One day later, on October 7, 2004, Nelson prepared separate Special Meetings of

Directors documents for Plaza and Mall (Directors’ Resolutions). The Directors’ Resolutions

provided that “[a] resolution was duly moved and seconded to accept an agreement by the

stockholders, [Nelson and Curia], that [Nelson] would sell his 8000 shares in this corporation

(52.7%) to [Curia], and that the manufacturers be contacted to facilitate the transaction.” The

Directors’ Resolutions further provided that Fifth Third would be funding the capital for the

stock transfer. The Directors’ Resolutions provided that the manufacturers would be contacted

because automobile manufacturers require their approval for any transfer of majority ownership

of a franchised dealership. Both Nelson and Curia signed the Directors’ Resolutions.

¶ 16 b. Communications with Automobile Manufacturers

¶ 17 Both Nelson and Curia understood that any change of majority ownership interest would

have to be approved by the automobile manufacturers. On October 28, 2004, Nelson sent letters

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to the automobile manufacturers, informing them that he “proposes to sell” his shares in both

dealerships to Curia. Representatives from the manufacturers responded, requesting additional

documentation from both Nelson and Curia, including an ownership change agreement. As

evidence of an ownership change agreement, Nelson sent the manufacturers the Directors’

Resolutions. In November 2004, Curia submitted documentation to the automobile

manufacturers, including the Toyota Minimum Standards, the Toyota Dealer Performance

Evaluation, Dealer Biographical Information, and an Application for Nissan Dealer Sales and

Service Agreement.

¶ 18 c. Fifth Third Loan Commitment

¶ 19 In September 2004, Curia and Nelson approached Inghram Debes, the relationship

manager in the automobile dealership finance group at Fifth Third, to request a loan for Curia to

purchase Nelson’s shares. On November 4, 2004, Debes sent a letter to Curia to “confirm that

Fifth Third Bank has approved and is committed to lend [Plaza] a term loan totaling $4,200,000.

The purpose of this loan is to provide you with sufficient funds to buy-out [Nelson’s] remaining

ownership interest in [Plaza and Mall].” Curia testified that this letter was necessary to show the

automobile manufacturers that he could secure the funds to proceed with the buyout.

¶ 20 3. Breakdown of Negotiations and Curia’s Option Exercises

¶ 21 On October 26, 2004, Nelson sent Curia a document entitled “Chronology of [Nelson]

and [Curia] Stock Purchase” (Chronology). Nelson testified that he prepared this document after

he learned that Curia was “balking” on the leases and the items in the Stockholders’ Minutes. In

the Chronology, Nelson recounted their business partnership, including the 1989 SPA and 1993

Modification. Nelson stated that:

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“My offer to have you buy me out at this time was with great consideration for

you. We have a bank ready and able to handle the transaction for you at very good

interest rates. However, I didn’t believe that you would be so difficult in extending to me

things that I really need for retirement; and to this date you have not come up with a

retirement package for me.

***

I will be calling the manufacturers; however, as I told you when I was in earlier

this month, there is no reason for me sending any letters of my wish to sell until we have

a package put together.”

¶ 22 On November 4, 2004, Curia responded to the Chronology. In response to Nelson’s

request for a retirement package, Curia responded that he did not “see anywhere in our

agreement that I was to fund a retirement package.” Curia testified that by “agreement,” he was

referring to the 1989 SPA and the 1993 Modification. Curia also wrote “please allow this to

serve as written notice to exercise my option to purchase the remainder of the stock” in Plaza and

Mall. Curia expressed his desire to close the transaction by the end of the year. On November 3,

4, and 10, Curia submitted documentation to the automobile manufacturers. On November 4,

Curia also submitted an Investment Proposal Summary to GM, to which he attached the letter

from Fifth Third committing to the $4.2 million loan. On November 17, 2004, Debes sent the

loan documents for the “Curia buy-out” to Toyota and stated that Fifth Third was “ready to fund

this transaction when instructed by Mr. Curia.” Debes sent the same loan documents to Nissan

on November 29, 2004.

¶ 23 On December 3, 2004, Nelson wrote a letter to Curia, offering to sell his shares in Plaza

and Mall for $3.4 million, using calculations based on the September 2004 GM financial

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statement. On December 21, 2004, Nissan sent a letter to Nelson and Curia, informing them that

it had approved the proposed stock purchase agreement conditioned on the receipt of several

documents from both the corporations and Fifth Third. On February 28, 2005, Curia wrote an

email to Nelson, in which he stated that he “had more than one attorney review our agreements,

and they all have the same conclusion. All we are asking you to do is honor our agreements.”

¶ 24 On March 2 and 3, Curia sent Nelson a “Notice of Exercise of Option” for both Mall and

Plaza (Option Exercises). In the March 2 Option Exercise, Curia stated that he had previously

exercised his first option under the 1989 SPA. Curia stated that the second option gave him “the

right to purchase from you an additional number of shares of capital stock of [Plaza] and [Mall]

that would give me 49% of the outstanding capital stock of each Corporation.” Curia stated that

he calculated that to be 193 shares of Plaza and 170 shares of Mall. Curia notified Nelson that he

was exercising his option to purchase those shares in accordance with the terms of the 1989 SPA

and the 1993 Modification. In the March 3 Option Exercise, Curia stated that he was exercising

the third option under the 1989 SPA to purchase Nelson’s remaining shares in Plaza and Mall

and Plaza’s land and four buildings.

¶ 25 4. Nelson Retains Quarles & Brady

¶ 26 On March 8, 2005, Nelson sent a letter and a packet of documents to Kimberly Johnson,

an attorney at Quarles & Brady’s Naples, Florida office who had previously worked on Nelson’s

estate planning. In the letter (Johnson Letter), Nelson informed Johnson that in September 2004,

he approached Curia about purchasing his stock in the corporations. Nelson stated that he gave

Curia some conditions for the purchase, including to meet the selling price set forth in the 1989

SPA based on the September 2004 GM financial statement. Nelson also stated that the agreement

was conditioned upon Nelson receiving vehicles from the dealership with insurance, health

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insurance for him and his wife, transportation to Dixon, Illinois to inspect buildings, hold

harmless agreements, and access to GM financial statements. Nelson further stated that he and

Curia met in January 2005 and realized that they were not in agreement with either the purchase

price or “its application.” Nelson stated that in January and February they met with brokers in an

attempt to sell the dealerships to a third party, but were unable to choose a broker. Nelson then

received the letters from Curia, informing him of his intent to exercise his options.

¶ 27 Nelson stated that under the written agreements, Curia could exercise his options to

purchase only if he and Nelson mutually agreed or if one of them died. Nelson stated that “it was

expressly understood that there would be no sale unless it was mutually agreed to and beneficial

to both shareholders.” Nelson attached to the Johnson Letter the 1989 SPA, the 1993

Modification, the 2000 Agreement, the October 26, 2004, Chronology with Curia’s response, the

unsigned October 6, 2004, Stockholders’ Minutes, Curia’s February 28, 2005, email in which

Curia asked Nelson to honor their “agreements,” Nelson’s response to that email on the same

date, and Curia’s March 2 and 3, 2005, Option Exercises (Johnson Packet). Johnson referred

Nelson to James Gatziolis, a partner and transactional lawyer in Quarles & Brady’s Chicago

office.

¶ 28 On March 13, 2005, Nelson sent a draft of his response letter to Curia’s Option Exercises

to Gatzilios. In the draft letter, Nelson stated that Curia’s Option Exercises had not met the

conditions of the 1993 Modification. Nelson specifically pointed to the language in the 1993

Modification that provided that any sale of stock would be based “upon those terms and

conditions subsequently agreed upon by the parties.” Nelson further stated in August 2004, he

offered Curia the opportunity to purchase his stock in Plaza and Mall “upon certain terms and

conditions” which were set forth in a letter Nelson left on his desk on December 3, 2004. Nelson

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represented that those terms and conditions were that the October 6, 2004, Stockholders’

Minutes be signed by both parties, that the newly agreed leases for the properties owned by

CRANK be signed by both parties, and that the September 30, 2004, GM financial statement be

used for the sale price. The draft letter was revised by Gatziolis, then further revised by Nelson,

and sent to Curia on March 14, 2005.

¶ 29 On March 29, 2005, Nelson sent a letter to Gatziolis, representing that he made his first

offer to have Curia purchase his shares in July 2004. On April 20, 2005, Nelson, his wife Carol

Nelson (Carol), and his son Korey Nelson (Korey) met with Gatziolis at the Quarles & Brady

Chicago office. Carol took notes at the meeting, but at trial was unable to explain what the

context of her notations meant outside of the words on the page. Carol wrote mostly in

unattributed shorthand phrases such as “Any other conditions would be: formula for stock

price—June 2004” and “Get this deal behind you!” After the meeting, Gatziolis brought Leonard

Shifflett, a litigation attorney at Quarles & Brady, onto the case to handle the litigation.

¶ 30 a. The Declaratory Judgment Complaint

¶ 31 On April 29, 2005, Quarles & Brady filed a complaint, on Nelson’s behalf, for

declaratory relief in the United States District Court for the Northern District of Illinois. The

complaint provided that, in July 2004, Nelson approached Curia about purchasing Nelson’s

shares in the dealerships, but the parties could not reach an agreement about the terms and price.

Quarles & Brady alleged that Curia’s March 2 and 3, 2005, Option Exercises were defective

because the 1993 Modification and 1997 Harkness Agreement effectively terminated the options

in the 1989 SPA. The complaint therefore sought a judgment declaring that Curia had no

exercisable option to purchase Nelson’s shares in the corporations, that Curia’s March 2 and 3,

2005, Option Exercises were void, and that Curia was in breach of the 1989 SPA, the 1993

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Modification, and the 1997 Harkness Agreement. Curia filed a separate action in the district

court seeking specific performance of the options, and the two cases were consolidated.

¶ 32 b. The Summary Judgment Motions

¶ 33 i. Curia’s Motion for Summary Judgment

¶ 34 Quarles & Brady and Curia filed cross-motions for summary judgment. In his motion for

summary judgment, Curia contended that the parties’ written agreements unambiguously

provided him the right to purchase Nelson’s shares in both corporations and that the price of the

shares should be $2,269,694.80 based on the formula in the 1993 Modification. Despite arguing

that the agreements were unambiguous, Curia contended that in Paragraph 5 of the 1993

Modification, which provided that “Curia shall have the right to purchase additional shares of

stock in said corporations upon those terms and conditions subsequently agreed upon by the

parties hereto,” he and Nelson actually intended to use the word “previously,” rather than the

word “subsequently.” Curia asserted that this construction of the paragraph would allow the non-

material terms of the 1989 SPA to be incorporated into the 1993 Modification and that Curia

would have the right to exercise the 1989 SPA options. This construction of the 1993

Modification would also defeat Nelson’s contention that the 1993 Modification created an

“agreement to agree.” Curia contended that such a result was logical because Nelson’s

construction of the written agreement would give Curia a right to purchase the shares, but not the

opportunity to do so unless Nelson agreed.

¶ 35 ii. Nelson’s Communication with Quarles & Brady After Curia’s Motion

¶ 36 On July 16, 2005, Nelson sent an email to Shifflett and Gatziolis regarding the 1997

documents. Nelson stated that he “found the items that go with the letter to David Williamson

our corporate attorney.” Nelson suggested that Quarles & Brady “ask Mr. Williamson for all of

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his notes and documents on all of the four agreements that he produced for both [Curia] & I and

Harkness, which includes the ‘subsequently’ one.”

¶ 37 On July 26, 2005, Nelson faxed Quarles & Brady a document entitled “Ken’s Story” in

response to Curia’s motion. In Ken’s Story, Nelson stated that in July 2004, he offered to retire

from the corporations, and in September 2004, he presented Curia with an offer to sell his shares

for $4.1 million. He stated that he and Curia further negotiated and Nelson made another offer on

December 4, 2004, for Curia to purchase his shares in both corporations for $3.4 million. Nelson

further provided that “[a]fter again trying to negotiate with Curia through December 2004 it was

apparent even though Curia had the financing from Fifth Third Bank to make the purchase, he

was unwilling to come to terms nor even to make a counter offer.”

¶ 38 Before filing the summary judgment motion, Quarles & Brady sent a draft of the motion

to Nelson and Korey for their review. Nelson and Korey sent back an edited version of the

motion. In a paragraph beginning “[i]n 2004 [Nelson] approached Curia *** about the possibility

of Nelson selling his majority share of stock in [Plaza] and [Mall]” Nelson and Korey added that

“Nelson and Curia began negotiating the price and manner of the stock sale,” but “at some point

Curia began maintaining he possessed” exercisable options. Further, in the statement of facts of

the motion, Nelson and Korey wrote that in July 2004, Nelson met with Curia and offered to sell

his shares in the corporations to Curia. They further wrote that, in September 2004, Nelson

presented an offer to sell his shares to Curia, “but Curia did not accept.” Nelson and Korey

specifically added language that Curia did not accept Nelson’s September 2004 offer. The

original draft of the motion also stated that Curia never accepted Nelson’s offer, but Nelson and

Korey edited it to read that “Curia never accepted any of Nelson’s offers,” changing the word

“offer” from singular to plural.

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¶ 39 iii. Quarles & Brady’s Motion for Summary Judgment

¶ 40 On August 3, 2005, Quarles & Brady filed its memorandum in support of Nelson’s

motion for summary judgment and in opposition to Curia’s motion for summary judgment. In its

memorandum, Quarles & Brady asserted that a plain reading of the 1993 Modification

contradicted Curia’s argument that he had a unilateral right to purchase Nelson’s shares pursuant

to the 1989 SPA. Quarles & Brady contended that, under Paragraph 5 of the 1993 Modification,

Curia could purchase additional shares only “upon those terms and conditions subsequently

agreed upon by the parties hereto,” and there was no allegation that the parties ever subsequently

agreed to any “terms and conditions.”

¶ 41 As for Curia’s assertion that the parties intended to use the word “previously” rather than

“subsequently” in Paragraph 5, Quarles & Brady contended that Curia did not raise this issue in

his affidavit and his motion merely “suggests” that previously was intended because the next

sentence of Paragraph 5 established the price for the shares. Quarles & Brady contended that

Curia’s assertion that “any terms that required later determination would not be material” is

contrary to Illinois law, which provides that if essential terms are missing or uncertain, then there

is no contract. Quarles & Brady asserted that the court should reject this contention and enforce

the contract as written, which required Curia to negotiate with Nelson if he wished to purchase

shares from him, and if they could not come to an agreement, then either party could sell their

shares to a third party.

¶ 42 Quarles & Brady also argued that the 1997 Harkness Agreement voided the options or

any rights Curia held under the 1989 SPA and 1993 Modification. Quarles & Brady further

contended that Curia’s options failed for lack of consideration. In the alternative, Quarles &

Brady asserted that even assuming Curia had the option to purchase Nelson’s shares, his Option

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Exercises were deficient because Curia calculated the purchase price under the 1993

Modification rather than the formula in the 1989 SPA options. Quarles & Brady contended that if

the court determined that Curia’s Option Exercises were valid, the price of Nelson’s shares

should be determined by the formula in the 2000 Agreement.

¶ 43 Quarles & Brady also drafted an affidavit for Nelson, which repeated much of the same

information from Nelson and Korey’s edited comments to the motion for summary judgment,

including that Curia did not accept Nelson’s September 2004 offer and that “Curia never

accepted any of [Nelson’s] offers” despite having financing from Fifth Third. Nelson signed the

affidavit, and it was attached to the summary judgment motion.

¶ 44 iv. Curia’s Response

¶ 45 On September 2, 2005, Curia filed an affidavit and a response to Nelson’s statement of

undisputed facts. In his response, Curia acknowledged that Nelson offered to sell his shares to

him in July 2004, but Nelson requested a number of provisions including that the corporations

provide health insurance for Nelson and his wife and new cars for 15 years. Curia contended that

these demands and the per-share price demanded by Nelson resulted in a purchase price that

significantly exceeded the prices calculated under the 1989 SPA and 1993 Modification. Curia

asserted that he did not accept any of Nelson’s offers, but as a courtesy to Nelson, “he listened

and reacted to every offer Nelson made.” Curia contended that each of Nelson’s offers contained

the additional provisions from the July offer. In his affidavit, Curia averred that in Paragraph 5 of

the 1993 Modification, he and Nelson “intended to use the word ‘previously’ rather than the

word ‘subsequently.’ ”

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¶ 46 v. Nelson’s Communications with Quarles & Brady Before District Court Ruling

¶ 47 On September 17, 2005, Nelson sent an email to Shifflett in which he stated that when he

went to Curia in July 2004 to retire, he put together a retirement package. Nelson stated that he

thought it would be fair to have some formula for the basis, so he used a basis that they both

understood and had agreed to before to negotiate. Nelson concluded that he “was not really going

to [Curia] with the [1989 SPA] in hand, I was going to him with a package that I felt we could

negotiate on.” Nelson sent another email to Shifflett and Gatziolis on November 22, 2005,

indicating that he wanted them to communicate to the presiding magistrate that “we have tried to

negotiate with [Curia] since July of 2004 and put many offers on the table, but without any

response to our offers.”

¶ 48 5. The District Court’s Ruling

¶ 49 On February 7, 2006, the district court entered its judgment. The district court granted

Nelson’s motion for summary judgment with respect to Mall, but granted Curia’s motion for

summary judgment with respect to Plaza. The district court found that there was no indication

that the 1993 Modification was intended to eliminate the options in the 1989 SPA, but was

intended to correct a mutual mistake by Nelson and Curia in valuing the stock of the corporations

purchased by Curia. With regard to the “subsequently” language in Paragraph 5 of the 1993

Modification, the district court determined that where the sentence following the “subsequently”

sentence established a method for determining the purchase price of the additional shares, it

would “def[y] reason (particularly in light of the absence of any expression of intent to change

Curia’s right to buy all Nelson’s shares) that the parties would provide a mechanism for

determining the purchase price but intend it to kick in only if they subsequently agreed on other

terms and conditions.”

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¶ 50 The district court further found that the 2000 Agreement further reinforced Curia’s right

to purchase Nelson’s stock in Plaza where it provided Curia the right to purchase Nelson’s shares

if Nelson died while the 1989 SPA and 1993 Modification were still in force. The court

determined that the 1989 SPA, in conjunction with the 1993 Modification and the 2000

Agreement, unambiguously provided Curia with the option to purchase Nelson’s shares in Plaza

with the price determined under the formula set forth in the 2000 Agreement.

¶ 51 The district court determined, however, that the 1997 Harkness Agreement superseded

the 1989 SPA and the 1993 Modification with respect to Mall, but not Plaza. Accordingly, the

district court found that the Mall shares were subject to the 1997 Harkness Agreement and that

Curia’s Option Exercises were defective with respect to those shares. The selling price of the

Plaza shares and other issues remained pending in the district court.

¶ 52 6. Nelson’s Post-Judgment Communications and Further Proceedings

¶ 53 On March 10, 2006, at Nelson’s request, Toyota sent him two “resolution letters and an

ownership change proposal letter” that had been sent to Toyota on October 28, 2004. This

included the Special Meetings of Directors document for Plaza on October 7, 2004. Nelson

forwarded these documents to Gatziolis and told him that (1) he had never received the “letter,”

(2) to his knowledge, Toyota had never received a “Resolution of the Board” or any ownership

change agreement, and (3) perhaps Curia had “made these up.” Nelson sent a second email to

Gatziolis later that day, stating that he “did not have a copy of this directors meeting.”

¶ 54 On March 21, 2006, Nelson emailed Julie Thomas at Toyota. Thomas had taken over the

position of Market Representation Administrator from Samuel Zangri, who had held the position

in October and November 2004, when Nelson and Curia first contacted Toyota about the

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ownership change. Thomas replied to Nelson’s email that the “original stock purchase agreement

included both [Plaza] and [Mall]. The total selling price to our understanding was $4,200,000.”

¶ 55 On June 5, 2006, Quarles & Brady filed an amended complaint on Nelson’s behalf,

alleging once again that Curia did not have an exercisable option to purchase Nelson’s shares in

Plaza. Quarles & Brady also alleged that Curia had breached his fiduciary duty and

misappropriated the corporation’s funds. In response, Curia filed a motion for summary

judgment, asking the court to find that his Option Exercises were valid.

¶ 56 On August 29, 2006, Nelson sent an email to Shifflett and Paul Cahill, another attorney at

Quarles & Brady who had been assigned to work on Nelson’s case, with his comments on

Curia’s answers. In his comments Nelson stated that he and Curia intended what they wrote in

the agreements, “not what we now think.” Nelson stated that he initially began negotiations with

Curia in July 2004 and sent letters to manufacturers at a price he and Curia negotiated and agreed

to “4.2m (stock only, both corps).” Nelson also noted that there was a letter from Fifth Third,

showing that it agreed to loan $4.2 million, but it was “then Curia decided that he didn’t want to

pay much [sic].” Nelson stated that he did not refuse to cooperate, but in September 2004, prior

to Curia “circumventing” what they had negotiated, he sent letters to the manufacturers,

recommending the sale. Nelson stated that he and Curia used the 2000 agreement as a “base” and

then “began adding other perks,” but there was a delay because Curia refused to do what the

manufacturers demanded. Nelson stated that the delay was also caused by “Curia not seeking the

corporations[’] accountants to prepare a selling price” because, if he had done so, he would have

known about “intangible values and goodwill.” Nelson acknowledged that none of the

agreements used the words goodwill or intangibles, but asserted that he and Curia discussed

goodwill every time they wrote a new agreement.

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No. 1-17-1653

¶ 57 On November 17, 2006, the district court granted Curia’s motion for partial summary

judgment in part and denied it in part. The district court found that Curia properly exercised his

option to purchase all of Nelson’s Plaza shares through his Option Exercises on March 2 and 3,

2005. The court found that the purchase price would be calculated, using the formula in the 2000

Agreement, and would be based on the February 2005 GM financial statement.

¶ 58 On November 27, 2006, Korey emailed Shifflett, advising him that “[a]pparently

sometime back in November of 2004, [Nelson], [Curia] and [Debes] had a meeting where

[Curia] agreed to pay 4.2 million [for] the stock.” Debes then sent Curia a letter confirming the

amount and the financing. Korey emailed Shifflett again on December 3, 2006, with suggestions

for Quarles & Brady’s motion for reconsideration. Korey suggested adding a sentence in the

motion that stated: “For example, in November or December[ ] 2004, Curia and Nelson agreed

on a price of 4.2 million for the stock in the presence of Ghram Debes, as evidenced by [the]

attached letter.” Korey suggested that Quarles & Brady then include the Fifth Third letter from

November 2004, committing to the $4.2 million loan as an exhibit.

¶ 59 On June 27, 2007, the district court entered an order granting Curia’s motion for

summary judgment with regard to specific performance for the sale of Nelson’s Plaza shares.

The court also found that the 2000 Agreement clearly and unambiguously did not include any

adjustment for goodwill or other intangible assets in determining the purchase price. The court

therefore set the purchase price at $2,188,720 for Nelson’s shares in Plaza. The court also left a

number of issues pending, including whether Curia was entitled to use the name “Ken Nelson”

for Plaza after he purchased the shares, and whether Curia was required to provide vehicles for

Nelson and his wife.

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No. 1-17-1653

¶ 60 7. Appeal and Motion for Stay

¶ 61 Quarles & Brady appealed the district court’s judgment granting Curia’s motion for

specific performance with regard to the Plaza shares to the Seventh Circuit while the unresolved

issues the district court identified in its order remained pending in the district court. On

September 5, 2007, Quarles & Brady filed a motion to stay the district court’s order. In that

motion, Quarles and Brady alleged for the first time that in “September 2004, Curia and Nelson

reached a verbal commitment whereby Curia would pay $4,200,000.00 for Nelson’s shares in

both companies and would provide Nelson with certain perks including two automobiles of his

choice for a period of 15 years.” The motion also alleged that Curia and Nelson continued to

negotiate a fair market price for Curia to purchase all of Nelson’s shares in the two corporations,

but sometime in late 2004 or early 2005, Curia decided that he could pay less than fair market

value for Nelson’s shares if he tried to enforce the 1989 SPA and 1993 Modification. This

information mirrored the statements in Nelson’s affidavit that accompanied the motion to stay.

The district court denied the motion to stay.

¶ 62 On February 15, 2008, while the appeal was still pending in the Seventh Circuit, Quarles

& Brady filed a second amended complaint for declaratory relief in the district court. In its claim

for breach of fiduciary duty in the amended complaint, Quarles & Brady alleged that in 2004

Curia agreed to purchase Nelson’s shares of Plaza and Mall for $4.2 million. Quarles & Brady

alleged that Nelson, in reliance on this agreement, worked to obtain the automobile

manufacturers’ approval for the sale, and Curia indicated to several third parties that he and

Nelson had reached an agreement, but he subsequently reneged.

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No. 1-17-1653

¶ 63 8. Nelson Discharges Quarles & Brady

¶ 64 In April 2008, Nelson discharged Quarles & Brady. That same month, pursuant to the

district court’s order, Nelson sold his shares in Plaza to Curia for $2.188 million. Nelson retained

attorney Stewart Weltman, who handled the appeal, the remaining issues in the district court, and

the ultimate settlement with Curia.

¶ 65 9. Seventh Circuit Ruling and Settlement

¶ 66 On November 20, 2009, the Seventh Circuit reversed the district court’s ruling granting

Curia’s motion for summary judgment and remanded the case for further proceedings. Curia v.

Nelson, 587 F.3d 824, 832 (7th Cir. 2009). In so ruling, the Seventh Circuit found that, despite

neither party raising the issue, the parties’ written agreements were ambiguous. Id. at 829.

Specifically, the court found that Paragraph 5 of the 1993 modification did not explicitly cancel

the options, but it also was not inconsistent with the continued existence of the options. Id. at

830. Accordingly the court found that summary judgment was inappropriate under the

circumstances. Id. at 832.

¶ 67 Rather than continuing the litigation in the district court after remand, in August 2010,

Curia and Nelson reached a settlement agreement whereby Nelson transferred all of his shares in

Mall to Curia in exchange for releasing Nelson of personal liability for Mall’s debt to Fifth

Third. As part of the settlement agreement, Curia also paid Nelson $855,888 for Nelson’s 50%

ownership stake in CRANK.

¶ 68 B. Nelson’s Malpractice Action Against Quarles & Brady

¶ 69 Following the settlement with Curia, Nelson filed a complaint for legal malpractice

against Quarles & Brady, alleging that it was negligent in its representation of him in the

Underlying Litigation. The complaint was subsequently amended, and eventually dismissed by

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No. 1-17-1653

the circuit court pursuant to section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2­

615 (West 2010)). Nelson appealed, and this court reversed and remanded, finding that, based on

Nelson’s allegations, it could not be said that Nelson could prove no set of facts from which a

jury could find Quarles & Brady’s alleged negligence was the proximate cause of Nelson’s

damages. Nelson v. Quarles & Brady, LLP, 2013 IL App (1st) 123122, ¶ 75.

¶ 70 On remand, Nelson filed the complaint at bar, alleging that Quarles & Brady was

negligent in its representation throughout the Underlying Litigation. Specifically, Nelson alleged

that Quarles & Brady was negligent in (1) failing to argue that Curia’s Option Exercises were

ineffective because they were not the mirror image of the 1989 SPA options, (2) failing to argue

that the 1989 SPA and subsequent agreements were ambiguous, and (3) failing to investigate and

enforce the $4.2 million oral agreement that Nelson and Curia reached in 2004. At trial, 15

witnesses testified over the course of 15 days, including Shifflett, Gatziolis, Nelson, Curia, and

two expert witnesses.

¶ 71 1. Curia’s Option Exercises

¶ 72 Shifflett testified that his primary goal in filing the complaint was to defeat Curia’s

Option Exercises. He acknowledged Curia’s Option Exercises attempted to purchase a different

number of shares than the amount of shares listed in the 1989 SPA options, but testified that he

did not raise an argument that the Option Exercises were defective because they were not the

mirror image of the 1989 SPA options because he did not think it would be persuasive. He

testified that Quarles & Brady considered raising that argument, and the argument appeared in a

draft of the reply brief in the Underlying Litigation, but Quarles & Brady ultimately chose to not

raise that argument because the changes in the number of shares were agreed to by the parties in

subsequent documents and because the second option in 1989 SPA provided Curia the option to

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No. 1-17-1653

purchase 49% of the outstanding shares and third option provided Curia the option to purchase

Nelson’s “remaining” shares, which is what Curia sought in his Option Exercises. He noted that

because the 1989 SPA options provided a percentage, he believed that relevant case law would

have supported the idea that as long as Curia purchased 49% of the shares with the second option

and the remaining shares with the third option, as specified in the 1989 SPA, the district court

could make an equitable adjustment to the actual number of shares to allow the purchase to go

forward.

¶ 73 Edward Joyce, Nelson’s expert witness, testified that Quarles & Brady should have

argued that Curia’s Option Exercises were defective because they were not a mirror image of the

1989 SPA options. Joyce testified that as a result of the corporations’ recapitalization following

the 1989 SPA, it would have been impossible for Curia to exercise the options pursuant to the

terms of the 1989 SP, and thus his Option Exercises were ineffective. Joyce also testified that the

case Shifflett relied on in contending that the court could make equitable adjustments to the

number of shares was not relevant because the agreement in that case had a provision allowing

the number of shares to be adjusted in the event of recapitalization, but there was no such

provision in Nelson and Curia’s agreements. Joyce opined that had Quarles & Brady raised this

argument, it was more likely true than not that they would have defeated Curia’s summary

judgment motion. Joyce noted that there would be no disadvantage to raising this argument as an

alternative method of relief and that Quarles & Brady’s failure to raise this argument showed a

failure to exercise the knowledge, skill, and care ordinarily used by a reasonably careful attorney

under the circumstances.

¶ 74 On cross-examination, Joyce acknowledged that Quarles & Brady made a version of the

mirror image argument by including a contention that Curia’s Option Exercises erroneously used

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No. 1-17-1653

the price formula from the 1993 Modification. However, Joyce testified that these were the

wrong facts to support this claim and that Quarles & Brady should have instead argued that Curia

attempted to purchase the wrong number of shares or that the options required Curia to offer to

purchase Plaza’s real estate. Joyce also acknowledged that Nelson could have raised these

arguments on remand from the Seventh Circuit.

¶ 75 Gino DiVito, Quarles & Brady’s expert, testified that it was unnecessary for Quarles &

Brady to argue that the number of shares had changed from the 1989 SPA, because, as Shifflett

testified, the second option specified a percentage of shares, 49%, for Curia to purchase and then

the third option specified that Curia could purchase the “remaining” shares. DiVito noted that

Curia’s Option Exercises mirrored these terms. DiVito also acknowledged that this argument

was included in a draft brief by Quarles & Brady, but ultimately was not raised.

¶ 76 2. Ambiguity

¶ 77 With regard to ambiguity, Shifflett testified that he argued the written agreements were

unambiguous in the motion for summary judgment because he did not believe there were any

issues of fact to resolve. He also testified that Nelson did not provide any extrinsic evidence that

would offer a different interpretation of the 1993 Modification. Gatziolis testified that part of

their strategy at trial was to avoid discovery and get a ruling on their summary judgment motion.

Shifflett testified that if there were an ambiguity in the written agreements, the district court

could identify it, sua sponte, and deny the motion for summary judgment, and Quarles & Brady

would be able to better focus its discovery.

¶ 78 Joyce testified that Quarles & Brady should have argued that the written agreements were

ambiguous. Joyce noted that Paragraph 5 of the 1993 Modification, the “subsequently”

paragraph, did not specify how many shares Curia would purchase or how Curia would pay for

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No. 1-17-1653

them. Joyce further testified that it was ambiguous whether this paragraph was consistent with

the 1989 SPA. Joyce testified that reading all of the agreements together, there was no clear

indication of how Curia could exercise his options or whether he had a right to purchase

Nelson’s shares. Joyce further testified that if the district court found the agreements were

ambiguous, it would not have granted Curia’s motion for summary judgment, and there would

have been an evidentiary hearing where Quarles & Brady could have introduced extrinsic

evidence to demonstrate what Curia and Nelson thought when they entered into the agreement.

Joyce testified that, within a reasonable degree of certainty, he believed that this argument would

have prevailed had Quarles & Brady raised it before the district court. On cross-examination,

Joyce acknowledged that although the Seventh Circuit found the agreements ambiguous, it also

found that the interpretation of the written agreements urged by Quarles & Brady before the

district court was a reasonable one.

¶ 79 DiVito testified that it was reasonable under the circumstances for Quarles & Brady to

argue that the written agreements were not ambiguous. He testified that it was reasonable for

Quarles & Brady’s to argue that Paragraph 5 of the 1993 Modification negated any unilateral

right by Curia to exercise the options. He opined that there was no downside to arguing that the

agreements were not ambiguous because the district court could find, sua sponte, that the

agreements were ambiguous, regardless of what the parties claimed. He also noted that arguing

ambiguity could have opened the door for Curia to raise arguments about what the parties

intended when they entered into the agreements.

¶ 80 3. $4.2 Million Oral Agreement

¶ 81 Nelson testified that in 2004, he decided he wanted to leave the automobile dealership

business and retire. He approached Curia about buying out his share of stock in Plaza and Mall,

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No. 1-17-1653

and Curia agreed. They based the price on the formula in the 1989 SPA and the June 2004 GM

financial statement and came up with a price a little more than $4.1 million, so they rounded it up

to $4.2 million for Nelson’s shares in both Plaza and Mall. Nelson testified that he said “I’ll sell

you my shares for [$]4,200,000,” and Curia was “very excited” and said “yes.”

¶ 82 Nelson testified that they did not discuss when the deal would close at that time, but they

knew they needed the automobile manufacturers’ approval for the transaction to approve Curia

as the dealer. Nelson testified that he would have handled that process and that he could not

direct the manufacturers to process an approval within a certain period of time. Nelson testified

that neither he nor Curia said that the deal would not take place if they could not close the

transaction by December 31, 2004.

¶ 83 Nelson further testified that in August or September, he and Curia met with Debes to ask

Fifth Third to fund the $4.2 million to buy the stock. After that meeting, Nelson and Curia

discussed the perks that Nelson was seeking, such as the health insurance and vehicles, and Curia

indicated that he would be willing to provide those perks in exchange for the continued use of

Nelson’s name for the dealerships. Nelson testified that he prepared the Stockholders’ Minutes

and the Directors’ Resolutions. He believed that the nine conditions in the Stockholders’ Minutes

were a separate agreement from the $4.2 million stock purchase agreement. He also testified that

the “agreement” referred to in the Directors’ Resolutions was the $4.2 million oral agreement.

Nelson testified that Curia signed the Directors’ Resolutions, but did not sign the Stockholders’

Minutes because he said it was “too much.” Nelson nonetheless moved forward with contacting

the manufacturers to obtain approval for the transaction.

¶ 84 Curia testified that, in 2004, he told Nelson that he wanted to “abide” by their written

agreements and buy out his shares. Nelson, however, wanted more than what was provided for in

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No. 1-17-1653

the agreements; he wanted a retirement package. Curia testified that he never accepted any of

Nelson’s offers to sell his shares, and he never agreed to two separate agreements—one for the

sale of Nelson’s shares and one for the retirement package for Nelson. Curia testified that when

he signed the Directors’ Resolutions, he believed he had an agreement to buy Nelson’s shares for

a “sum certain” as calculated in accordance with the 1989 SPA. Curia further testified that when

he went to Fifth Third in 2004 and secured funding for the purchase of Nelson’s shares, it was

merely a preapproval and was not tied to any purchase price because the actual price of the

shares could change each month, depending on the performance of the dealership, and the GM

financial statements. Curia knew that as part of the approval process, he would have to provide

manufacturers with proof that he could secure the funds to proceed with the buyout. Curia

testified that his intention was to borrow enough money to purchase Nelson’s shares and to use

the remainder as working capital and “combine loans.”

¶ 85 Nelson testified that, in late November or early December 2004, Curia told him that he

was paying too much for Nelson’s shares. On December 3, 2004, he sent a letter to Curia,

attempting to renegotiate the sale. He testified that he did not mention their $4.2 million oral

agreement in this letter because Curia had already rejected that offer, so he was attempting to

make another offer to sell his shares for $3.4 million, but Curia did not accept. In January 2005,

he and Curia discussed approaching a broker to find a third party to purchase the dealerships and

the real estate.

¶ 86 After receiving Curia’s Option Exercises in March 2005, Nelson sent a letter to Johnson

at Quarles & Brady. Nelson testified that the Johnson Letter did not mention the $4.2 million oral

agreement because at the time he was only concerned with Curia’s Option Exercises. With the

assistance of Gatziolis, Nelson sent a letter to Curia on March 14, 2005, with an offer to sell his

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No. 1-17-1653

shares for $3.4 million based on the September 2004 GM financial statement. Nelson understood

that if Curia accepted the offer in this letter, he would not receive any retirement package or

perks. Nelson acknowledged that he sent an email to Gatziolis on March 29, 2005, in which he

did not mention the $4.2 million oral agreement.

¶ 87 On April 20, 2005, Nelson, Carol, and Korey met with Gatziolis at the Quarles & Brady

office in Chicago. Nelson testified that, at that meeting, he told Gatziolis about the $4.2 million

oral agreement and that Fifth Third had agreed to fund the transaction. Nelson testified that

Gatziolis told him that oral agreements were not recognized in Illinois and did not ask him if he

could provide any more information about the oral agreement. Carol testified that during the

meeting, she was taking notes, but was not paying close attention. Referring to her notes, Carol

testified that Gatziolis told them to “get over it,” and she believed that when he said that, he was

referring to the $4.2 million oral agreement based on a “4.2” she had also written on the page.

She acknowledged on cross-examination, however, that, based on her notes, she could not be

sure whether that was said by Gatziolis or Nelson or whether the notes were her own thoughts.

¶ 88 Korey, who was the secretary of Mall and Plaza, and also a director, testified that the

purpose of the April 20, 2005, meeting with Gatziolis was to try to reach a resolution with Curia

after he had sent notice of his intent to exercise his options to purchase Nelson’s shares. Korey

testified that Nelson told Gatziolis that he and Curia had reached an oral agreement to sell his

shares in both Plaza and Mall for $4.2 million. Gatziolis asked Nelson if he had written the

agreement down, but Nelson told him that they had not. Gatziolis told Nelson that “oral

agreements are not enforceable in the state of Illinois. You can ask Korey about it. He knows. He

studied the statute of frauds in law school.” Throughout the meeting, Gatziolis repeatedly told

Neslon to get a deal done with Curia so that he could move on and retire.

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No. 1-17-1653

¶ 89 Gatziolis testified that when he first became involved in Nelson’s case, Nelson wanted to

know if he was required to honor Curia’s Option Exercises. He learned that Nelson wanted to

sell all of his shares and retire, but wanted a different price than what Curia had offered. He

helped Nelson write a letter to Curia on March 13, 2005, and did not recall Nelson telling him

about any oral agreement for $4.2 million. Before meeting with Nelson, Gatziolis reviewed the

Directors’ Resolutions, the 1989 SPA, and subsequent written agreements; the November 2004

Fifth Third loan commitment letter for $4.2 million; and the other materials in the Johnson

Packet, including the Chronology with Curia’s responses. Gatziolis testified that none of these

documents raised a question in his mind that Curia and Nelson had entered into an oral

agreement in 2004. Specifically, Gatziolis testified that the comments made by Curia and Nelson

in the Johnson Packet showed that they were not in agreement about the retirement package.

Gatziolis further noted that there was no mention of sale price of $4.2 million in any of the

documents he reviewed.

¶ 90 Gatziolis further testified that Nelson did not tell him about a $4.2 million oral agreement

at the April 2005 meeting or in any of their communication before the meeting. He testified that

he did not tell the Nelsons at the April 2005 meeting that oral contracts were not enforceable in

Illinois. He further testified that, in April 2005, he understood that an oral agreement for the sale

of stock could be enforced in Illinois with adequate evidence. He acknowledged, however, at his

deposition that he testified that he did not recall whether the Nelsons told him there was an oral

agreement for $4.2 million or whether he told them it was not enforceable and to get the deal

behind them.

¶ 91 On April 27, 2005, Nelson sent an email to Gatziolis, in which he stated that he and Curia

began “this process” in September 2004. Nelson said that he and Curia met with Debes at Fifth

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No. 1-17-1653

Third to discuss their needs and “came up with 4.2M of funds” and Debes approved that amount.

Nelson stated that “[s]ince that was the figure we agreed that we needed, perhaps that would be

the selling price including all the perks, etc[.], that [Curia] would be more comfortable with.”

Gatziolis forwarded the email to Shifflett and Cahill, and stated, “[f]ood for thought, although

more like a fast.”

¶ 92 On April 29, 2005, hours before Quarles & Brady filed the initial complaint in the district

court, Nelson sent another email to Gatziolis in which he stated, among other things, that Fifth

Third agreed to loan Curia “up to” $4.2 million to purchase his shares in both corporations.

Nelson further stated that “[Curia] and I agreed along with the Bank that the [$4.2 million]

would be about what the selling price would be.” Nelson then identified the issues that he

believed needed to be addressed going forward including the stock sale “which includes some

type of Retirement Package.”

¶ 93 Gatziolis testified that neither of these emails raised the question of an agreement in his

mind because the words “perhaps” and “about” and the phrase “up to” suggested that Nelson and

Curia had agreed approximately what the selling price would be, but did not indicate an

agreement because these were not definite terms. Gatziolis testified that Nelson did not tell him

at any point before Quarles & Brady filed the complaint in the district court that he and Curia

had agreed on a selling price of $4.2 million. Gatziolis further testified that he knew from his

prior experience that in order for a change of ownership for an automobile dealership to be

approved, the owners would have to submit information to the automobile manufacturers.

Gatziolis acknowledged, however, that he did not contact the automobile manufacturers to

determine if they had documentation that would support a claim for an agreement between

Nelson and Curia for $4.2 million.

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No. 1-17-1653

¶ 94 Gatziolis testified that throughout the representation, his understanding was that Nelson

would not settle unless he obtained the selling price he was looking for the shares and a

retirement package. Gatziolis encouraged Nelson to settle while the litigation was pending and

testified that he allowed Nelson to determine his own offers for a selling price during the

negotiations.

¶ 95 Gatziolis and Shifflett testified that the initial complaint was filed on April 29, 2005.

Both testified that the purpose for filing the complaint was to have something pending in the

court before the closing date on Curia’s Option Exercises on May 2. Shifflett and Gatziolis

testified that Shifflett handled the litigation while Gatziolis mostly handled the settlement

negotiations. Shifflett testified that when he filed the complaint, he had the information in the

Johnson Packet, the Directors’ Resolutions, and the emails Nelson sent to Gatziolis on April 27

and April 29. Shifflett was unsure whether he had the letter from Fifth Third from November

2004, committing to the loan of $4.2 million, but in any event he testified that he did not ask

Nelson about the letter before filing suit. Shifflett testified that none of the information he

received before filing the complaint put him on notice to investigate a potential oral agreement

between Curia and Nelson.

¶ 96 Shifflett testified that he did not believe he had a duty to investigate a potential oral

agreement because Nelson’s letters to Curia indicated that they were not in agreement. Shifflett

also observed that Curia had not signed the Stockholders’ Minutes, and at no point did Nelson

say that he and Curia had an agreement to sell his shares for $4.2 million. Shifflett also knew that

Nelson and Curia would be required to submit information to the automobile manufacturers in

order to approve the sale, but he did not know what information they had submitted. When he

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No. 1-17-1653

started working on the complaint, he asked Nelson to give him everything he had, but did not

contact the manufacturers.

¶ 97 Shifflett testified that his primary goal in filing the complaint was not to force Curia to

purchase Nelson’s stock for $4.2 million, but was to defeat Curia’s Option Exercises. Shifflett

testified that he believed that if Curia’s options were “knock[ed] out,” Nelson would be able to

negotiate the sale of his shares to Curia, but as long as the options existed, Curia would not

negotiate. Shifflett believed Nelson’s goal was to establish a purchase price for all the stock, with

the addition of some added benefits, and not just for the stock alone.

¶ 98 Shifflett acknowledged that the complaint did not include a contention that Curia and

Nelson had reached an agreement for Curia to buy Nelson’s shares for $4.2 million. Shifflett

testified that he believed there was insufficient evidence to support such a claim. Shifflett knew

that Curia and Nelson had negotiated in the summer of 2004, but did not believe they had

reached an agreement at any point. Like Gatziolis, Shifflett testified that the emails Nelson sent

on April 27 and April 29 did not raise the possibility of an agreement because Nelson used words

like “perhaps,” “about,” and “up to.” Shifflett testified that he discussed the filings with Nelson

and that Nelson never mentioned an oral agreement to sell his shares to Curia for $4.2 million.

¶ 99 Nelson conceded that he did not say anything about the oral $4.2 million agreement in the

Johnson Letter or the Johnson packet. He acknowledged that there was nothing about the

agreement in the March 2005 letter to Curia that Gatziolis helped him write or in the July 2005

Ken’s Story. Nelson further acknowledged that neither he nor Korey included any information

about a July 2004 agreement or an oral agreement for $4.2 million when they edited the filings

and returned them to Quarles & Brady.

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No. 1-17-1653

¶ 100 After the district court granted Curia’s motion for summary judgment, Nelson testified

that he contacted Thomas at Toyota to ask for the purchase price that Curia included with his

application. Thomas replied that the original agreement was for both Plaza and Mall and that

Toyota’s “understanding” was for a purchase price of $4.2 million. Nelson testified that he

shared this information with Gatziolis and Shifflett in March 2006, but neither of them recalled

receiving this information at that time.

¶ 101 Shifflett testified that the first time he received any communication about a potential oral

agreement for $4.2 million was Nelson’s email from August 29, 2006, after the district court had

ruled on the summary judgment motions. Shifflett, however, did not believe that this email was

definitive because Nelson said in the email that he sent the information about the agreement to

the manufacturers, but Shifflett noted that Nelson’s letters to the manufacturers did not include

any information about a $4.2 million agreement. Shifflett had no reason to believe Nelson had

sent any additional documentation to the manufacturers because Shifflett had previously asked

Nelson to send him “everything.” In addition, Shifflett testified that he believed Nelson still

wanted all of his retirement perks and that he and Curia were still negotiating those items and

had not actually reached an agreement. Shifflett testified that the information in this email did

not create a sufficient basis to file an amended complaint alleging the existence of an oral

agreement for $4.2 million.

¶ 102 Shifflett also acknowledged that he received emails from Korey in November and

December of 2006, in which Korey stated that Curia agreed to purchase Nelson’s shares for $4.2

million and that they discussed this agreement in the presence of Debes. Shifflett testified that he

did not contact Debes for more information, because he believed Debes was biased toward Curia.

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No. 1-17-1653

¶ 103 Debes testified that Nelson and Curia approached him in September 2004 about a request

for a loan for Curia to purchase all of Nelson’s shares in the two dealerships. Debes testified,

however, that Nelson and Curia never told him that they had reached an oral agreement for the

sale of the shares, but could not say whether Curia and Nelson had conversations between each

other in which they reached an agreement. He testified that when generating the loan documents,

he understood that Curia and Nelson were still negotiating toward a deal because they had

differing views about what Curia would pay for the shares and what Nelson would accept for

them. Debes testified that Fifth Third would not have disbursed the funds based on an oral

agreement and would have also needed the manufacturers’ approval before it would disburse the

funds.

¶ 104 With regard to the November 2004 letter committing Fifth Third to the $4.2 million loan,

Debes testified that the commitment letter provided that the funds would be issued for the

purchase of Nelson’s shares in Plaza and Mall, and that it would be inconsistent with Fifth

Third’s approval for Curia to use the funds for another purpose. He testified, however, that it was

common in a situation like this one to get preapproval even before the final terms of the

agreement were established. Debes acknowledged that he sent these loan documents to Toyota

and Nissan at Curia’s request. Debes also acknowledged that he cooperated with Curia’s attorney

during the Underlying Litigation because Fifth Third wanted Curia to become the owner of the

dealerships.

¶ 105 Shifflett testified that, in early 2008, Nelson told him that he received information from

Thomas at Toyota about a $4.2 million price, and Shifflett told him to get more information.

Shifflett testified that he did not contact Thomas because he believed she would direct him to

Toyota’s legal department because he was a lawyer. On February 15, 2008, Quarles & Brady

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filed an amended complaint in the district court, alleging that in 2004 Curia agreed to purchase

Nelson’s shares for $4.2 million. Shifflett said this allegation was based on the information from

Nelson that Thomas had documentation reflecting a purchase price of $4.2 million. On March

20, 2008, Nelson emailed Shifflett to inform him that he asked Thomas when she received

information from Curia that he was paying $4.2 million for the two dealerships. Nelson learned

that Curia did not send a document to Toyota containing that information, but Thomas told him

there was notation in her notes that the figure came from a communication with Curia that

occurred in November 2004, before Thomas started in the position and Zangri was the Market

Representation Administrator for Toyota.

¶ 106 Thomas testified that she had no personal knowledge of what happened between Zangri

and Nelson or Curia. She testified that she likely would have had some documentation to support

the $4.2 million figure in her email to Nelson, but she did not know where that amount came

from. She testified that Toyota would have to know the purchase price of the shares in order to

finalize the approval process. Zangri testified that in connection with the change of ownership

for Plaza and Mall, Toyota received the Directors’ Resolutions. Based on these documents,

Zangri made an “assumption” that Curia had negotiated a deal to buy out Nelson’s remaining

shares. Zangri testified that he started the review process based on the information provided by

Nelson and Curia and that he would not start that process unless there was an agreement that had

been reached. He further testified, however, that in all the information Toyota received from

Nelson or Curia, there were no terms of a deal or a price term. Zangri also testified that Toyota

would not have approved the transaction based on the November 2004 loan commitment letter

from Fifth Third because the loan agreement allowed shares of the dealership to be pledged to a

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No. 1-17-1653

third party and allowed for the debt to be cross-collateralized, which ran afoul of Toyota

standards.

¶ 107 Fariborz Nour testified at his deposition that he was the market representation specialist

for Nissan in 2004 and 2005, and similarly testified that Nissan did not have documentation

showing the purchase price or terms of an agreement between Nelson and Curia. He testified,

however, that based on his experience, a request for the approval of a change of majority

ownership interest would “not really get off the ground” without an asset or stock purchase

agreement, but could not say whether such an agreement was provided in this case. Nour

testified that he could not say whether Nissan required owners to provide a purchase price for the

shares, but testified that it was not one of his requirements.

¶ 108 a. Expert Witness Testimony

¶ 109 Joyce testified that based on the information Quarles & Brady had prior to filing the

complaint, they should have been aware of a potential agreement between Curia and Nelson for

the sale of Nelson’s shares. Specially, Joyce testified that based on the Fifth Third letter from

November 2004, it should have been “obvious” to Quarles & Brady to contact the bank and

determine the purpose of the loan commitment. Joyce also observed that the Directors’

Resolutions provided that Nelson would contact the manufacturers in connection with an

agreement, which should have prompted Quarles & Brady to contact the manufacturers to

determine what documentation they had related to the sale of the corporations’ shares to Curia.

Joyce testified that, in his opinion, a reasonably careful attorney under the circumstances would

have conducted this investigation before filing the complaint. Joyce acknowledged, however,

that the Directors’ Resolutions did not refer to a $4.2 million agreement.

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¶ 110 Joyce further testified that if Quarles & Brady had contacted Nissan and Toyota, they

would have obtained documents that Curia had submitted to those manufacturers, which could

have contained terms of the agreement and showed that Curia had been contacting the

manufacturers in connection with a potential agreement. Joyce noted that Thomas told Nelson

that her notes reflected that Curia told Toyota that he had agreed to purchase Nelson’s shares for

$4.2 million. He acknowledged, however, that Thomas could not provide any documentation

supporting this statement, and that Thomas was not employed at that position at Toyota when the

approval process started, so she had no personal knowledge of Curia’s representations. Joyce

also noted that there were documents that Nissan had sent to Nelson and Curia that stated that

Nissan had approved the stock purchase agreement between Nelson and Curia. He further opined

that Quarles & Brady would have learned from the manufacturers that they will not start

processing an approval for a sale of a majority ownership interest until they are satisfied there

has been an agreement between the parties.

¶ 111 Joyce further testified that if Quarles & Brady had undertaken this investigation, they

would have learned that Nelson’s goal in retaining them was to sell all of his shares of stock in

the two dealerships for $4.2 million. Based on their investigation, Quarles & Brady should have

informed Nelson that he had an enforceable oral contract between him and Curia for the sale of

his shares in the two dealerships for $4.2 million. Joyce testified that Nelson would have had a

very strong claim for breach of oral contract against Curia based on the evidence from Fifth

Third that it had committed to the $4.2 million loan and the information from the manufacturers

that they had been asked to approve a sale of Nelson’s majority interest to Curia.

¶ 112 With regard to the retirement benefits, Joyce testified that Nelson believed that he had a

deal for these benefits, but Curia did not. Joyce opined that whether those benefits were part of

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the stock sale agreement would be reserved for the trier of fact. Nonetheless, Joyce testified that

these benefits had no relevance to the stock sale for $4.2 million because Curia and Nelson

viewed them as separate transaction. Joyce noted that both parties continued to process the sale

by contacting the manufacturers and Fifth Third even after Curia did not sign the Stockholders’

Minutes, which outlined the retirement benefits. Joyce did not believe the perks were a condition

of the stock sale agreement.

¶ 113 Joyce also testified that Gatziolis, in telling Nelson that oral contracts are not enforceable

in Illinois, did not perform as a reasonably careful lawyer under the circumstances. Joyce noted

that the two emails Nelson sent to Gatziolis on April 27 and April 29, 2005, should have

provoked Gatziolis to speak to Fifth Third to determine the purpose of the loan. After

investigating Fifth Third and the manufacturers, Gatziolis should have interviewed Nelson and

would have learned about Nelson’s goals and his attempts to continue the approval process with

the manufacturers after Curia reneged. Joyce testified that Gatziolis should have directly asked

Nelson for any documents related to the sale of stock to identify other potential sources of

information that would help him determine Nelson’s rights and obligations.

¶ 114 Joyce testified that Quarles & Brady should have included an argument regarding the

$4.2 million oral contract in the complaint because merely defeating the stock options, as

Quarles & Brady sought to do with the complaint, would not have achieved Nelson’s goal;

Nelson still would have retained his ownership interest in the dealerships if he had prevailed. An

argument that he and Curia had entered into an oral agreement to sell Nelson’s shares for $4.2

million, however, would have achieved Nelson’s goal if he had prevailed. Joyce opined that,

based on the documentation and testimony available to Quarles & Brady, it was more likely true

than not that Nelson would have prevailed on the argument that he had a valid and enforceable

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No. 1-17-1653

oral contract with Curia for the sale of his shares for $4.2 million if Quarles & Brady had raised

that argument before the district court. Joyce concluded that Quarles & Brady’s failure to assert

this argument demonstrated Quarles & Brady’s failure to perform as a reasonably careful lawyer

under the circumstances.

¶ 115 DiVito testified that, in his opinion, Quarles & Brady used the experience, skill, and

knowledge that a reasonably careful lawyer would use under the circumstances. He testified that

Quarles & Brady was entitled to rely on the information provided to them by Nelson in the

Johnson Letter, and the other documents Nelson submitted to Quarles & Brady. DiVito opined

that this documentary evidence, as well as the other information Nelson provided to Quarles &

Brady, did not support a claim for an oral agreement. DiVito noted that in the documentation that

he reviewed in preparation for his testimony, he did not see any contemporaneous evidence that

referenced, documented, or confirmed the alleged oral agreement. DiVito testified that, instead,

the documentation indicated that, from the beginning, Nelson was “bemoaning” that Curia would

not negotiate with him and declined all of his offers. DiVito testified that if Nelson and Curia had

reached an oral agreement, Nelson would be “screaming it from the rooftops” and not saying that

Curia had not accepted his offers. DiVito testified that Quarles & Brady did not have a duty to

interview Nelson about a potential oral agreement because they did not have any information

regarding the possibility of the existence of such an agreement in 2005. DiVito testified that

Gatziolis’ testimony and the documentary evidence indicated that Gatziolis may have known

about the loan commitment from Fifth Third and the negotiations between Nelson and Curia, but

he had no reason to know about any oral agreement.

¶ 116 DiVito further testified that Quarles & Brady had no duty to contact the automobile

manufacturers because they already had all of the information from Nelson. Quarles & Brady

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No. 1-17-1653

had no reason to suspect that there was an oral agreement because all of the information they had

from Nelson indicated there was no agreement. DiVito testified that Quarles & Brady also had

no duty to contact Fifth Third. DiVito concluded that, at the time the complaint was filed, there

was no evidence to allege the existence of an oral agreement for $4.2 million and the arguments

Quarles & Brady made in the complaint were reasonable in an attempt to defeat Curia’s Option

Exercises. DiVito noted that the evidence showed that Quarles & Brady did not become aware of

a potential oral agreement until the second half of 2006, after the district court had already ruled.

¶ 117 4. The Circuit Court’s Ruling

¶ 118 The circuit court delivered its judgment in a written order. In its order, the circuit court

recounted the testimony of Joyce and found that the evidence presented failed to show that

Quarles & Brady was aware, before filing the lawsuit in the district court on April 29, 2005, that

Nelson believed he had reached an oral agreement for the sale of his shares only for $4.2 million.

The court continued that even after Quarles & Brady filed the lawsuit, Nelson’s continued

communication with Quarles & Brady did not reveal such an agreement. Instead, the court found

that the evidence suggested that Nelson desired to reach an agreement with Curia, made efforts

in furtherance of a sale, and negotiated over terms, but ultimately did not reach an agreement

with Curia. The court determined that it only became clear after the district court ruled that

Nelson was claiming that he had reached an enforceable oral agreement with Curia. Ultimately,

the court determined that “[w]hen segregating the evidence of what [Quarles & Brady] was told,

or learned over time, from the evidence which would have been admissible at a trial for breach of

contract, it becomes clear that plaintiff has failed to establish that it is more likely than not that

Nelson would have won that breach of contract case.” The court therefore determined that

Nelson had failed to establish the proximate cause element of his legal malpractice claim.

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¶ 119 The court further found that Nelson had failed to establish negligence with regard to his

claims that Quarles & Brady should have argued that Curia’s Option Exercises were invalid

because they were not the mirror image of the 1989 SPA options and that the written agreements

were ambiguous. The court determined that Quarles & Brady’s positions could not judged by

their outcome, but rather should be judged by whether Quarles & Brady deviated from the

standard of care. The court further found that Nelson failed to establish proximate cause with

regard to Quarles & Brady’s failure to raise those arguments because, after the Seventh Circuit

reversed and remanded the case, Nelson elected to settle with Curia and thus forfeited his right to

pursue further litigation on remand. Nelson now appeals.

¶ 120 II. ANALYSIS

¶ 121 On appeal, Nelson contends that the circuit court erred in rejecting his legal malpractice

claim where the evidence overwhelming showed that Nelson and Curia entered into an oral

agreement for Curia to purchase Nelson’s stock for $4.2 million and that Quarles & Brady was

aware of the agreement by the time it filed the complaint in April 2005. Nelson contends that the

court erred in rejecting his claim that Quarles & Brady was negligent for failing to assert this

claim in the district court. Nelson further contends that the court erred in rejecting his claim that

Quarles & Brady deviated from the standard of care by failing to argue that Curia’s Option

Exercises were defective because they were not the mirror image of the options in the 1989 SPA.

Nelson also asserts that the court erred in rejecting his claim that Quarles & Brady deviated from

the standard of care by failing to argue that the written agreements were ambiguous. Finally,

Nelson contends that the court erred in finding that Quarles & Brady’s negligence was not the

proximate cause of his damages.

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¶ 122 A. Standard of Review

¶ 123 To prevail on a claim of legal malpractice, a plaintiff must show (1) an attorney-client

relationship, (2) that the defendant attorney owed the plaintiff client a duty of care arising out of

that attorney-client relationship, (3) that the defendant attorney breached that duty, and (4) that

the plaintiff client suffered injury as a proximate result of the defendant attorney’s breach.

Warnock v. Karm Winand & Patterson, 376 Ill. App. 3d 364, 368 (2007) (citing Northern Illinois

Emergency Physicians v. Landau, Omahana & Kopka, Ltd., 216 Ill. 2d 294, 306 (2005)). In

order to establish proximate cause in a legal malpractice action, the plaintiff client must

essentially prove “a case within a case,” i.e., that “but for” the attorney’s negligence, the plaintiff

would have prevailed in the underlying action. See First National Bank of LaGrange v. Lowrey,

375 Ill. App. 3d 181, 196 (2007). The injury in a legal malpractice action is not a personal injury,

or the attorney’s negligent act itself, but is a “pecuniary injury to an intangible property interest

caused by the lawyer’s negligent act or omission.” Northern Illinois Emergency Physicians, 216

Ill. 2d at 306.

¶ 124 As both parties recognize, generally, the standard of review in a bench trial for a legal

malpractice action is whether the court’s judgment was against the manifest weight of the

evidence. Eychaner v. Gross, 202 Ill. 2d 228, 251 (2002); Kalata v. Anheuser-Busch Cos., 144

Ill. 2d 425, 433 (1991). “A decision is against the manifest weight of the evidence only when an

opposite conclusion is apparent or when the findings appear to be unreasonable, arbitrary, or not

based on the evidence.” Eychaner, 202 Ill. 2d at 252. On review, we will not substitute our

judgment for that of the trier of fact. Id.

¶ 125 Despite acknowledging this general rule, Nelson nonetheless contends that this court

should not accord the circuit court’s ruling any deference. Nelson asserts that, in its order, the

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circuit court did not make any specific factual findings and that aspects of its decision were

contrary to uncontested facts and documentary evidence. Nelson contends that, as such, we

should not defer to the court’s judgment, which ignores the uncontradicted testimony at trial and

the documentary evidence establishing the oral $4.2 million stock purchase agreement. Nelson

further maintains that this court should review de novo the trial court’s ruling that Nelson failed

to prove the proximate cause element of his claim because he settled the Underlying Litigation

after the Seventh Circuit’s remand because this finding was “incorrect as a matter of law.”

¶ 126 1. The Manifest Weight Standard Applies to this Action

¶ 127 Contrary to Nelson’s contentions, the deference afforded to the trial court under the

manifest weight of the evidence standard is not applied only where the circuit court makes

specific factual findings and credibility determinations on the record. Rather, we give deference

to the circuit court because it is in the best position to observe the conduct and demeanor of the

parties and the witnesses, and is intimately familiar with the evidence. Best v. Best, 223 Ill. 2d

342, 350 (2006); In re D.F., 201 Ill. 2d 476, 498-99 (2002). Here, it is apparent from the record

that the court was required to make credibility determinations and factual findings in determining

when Quarles & Brady knew about Nelson’s claim that he entered into an oral agreement with

Curia for the sale of his shares, given the contradictory testimony that was presented on this issue

by Nelson, Korey, Gatziolis, Shifflet, and others, as well as the documentary evidence presented.

It would defy this court’s function to hold that we should not defer to the circuit court’s

determination on these matters because they were not made on the record. Instead, on review, we

should not substitute our judgment for that of the circuit court regarding the credibility of the

witnesses, the weight to be given the evidence presented, or the inferences to be drawn from that

evidence. In re D.F., 201 Ill. 2d at 499. In addition, as discussed in detail below, we cannot say

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that the evidence presented regarding the oral stock purchase agreement was “uncontradicted,”

as Nelson suggests.

¶ 128 We are not persuaded by the precedent cited by Nelson, Chicago Investment Corp. v.

Dolins, 107 Ill. 2d 120 (1985), and Long v. Arthur Rubloff & Co., 27 Ill. App. 3d 1013 (1975). In

neither case did the court hold that a reviewing court should not defer to the findings of the

circuit court where the circuit court failed to make specific factual findings and credibility

determinations on the record. In Chicago Investment Corp., the supreme court did not find that

trial court had an “obligation” to make factual findings on the record, but merely stated that

where the trial court is the finder of fact, it has the obligation to make such findings. Chicago

Investment Corp., 107 Ill. 2d at 124. Similarly, in Long, this court specifically found that such

factual findings are “not required” to be on the record, but merely stated that it would be “better

practice” for the trial court to set forth the reasons for its judgment. Long, 27 Ill. App. 3d at 1022

n.4. We express no opinion regarding whether such a procedure would be “better practice,” but

we observe that our precedent is clear that a trial court is not required to state the reasoning for

its judgment on the record in order for the manifest weight of the evidence standard to apply and

for this court to accord deference to its credibility and factual findings. Here, it is clear from the

evidence presented that the circuit court was required to make certain credibility and factual

determinations, and our well-established precedent directs us to accord deference to such

determinations, whether or not the court explains the reasoning for its determinations or whether

or not such determinations are made on the record. Accordingly, we will review the court’s

ruling to determine whether its judgment was against the manifest weight of the evidence.

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¶ 129 B. $4.2 Million Oral Agreement

¶ 130 Nelson first contends that evidence presented at trial established that Nelson and Curia

entered into an oral agreement for Curia to purchase Nelson’s stock for $4.2 million and that

Quarles & Brady was aware of that agreement before it filed the complaint in April 2005. Nelson

asserts that there is overwhelming evidence of the agreement from the testimony of both Curia

and Nelson, their conduct after the oral agreement, the documentary evidence, and the testimony

of third parties. Nelson contends that the circuit court’s determinations that Quarles & Brady did

not know about the oral agreement before the district court ruled and that Nelson presented

insufficient evidence to show that he would have prevailed on a breach of contract claim based

on the $4.2 million oral agreement was against the manifest weight of the evidence.

¶ 131 1. The Circuit Court’s Ruling that Quarles & Brady Did Not Know About Nelson’s Claim
for a $4.2 Million Oral Agreement Before the District Court Ruled 1 Was Not
Against the Manifest Weight of the Evidence

¶ 132 Here, the evidence presented at trial shows that when Nelson approached Quarles &

Brady in March 2005, he was seeking legal advice with regard to his rights after Curia’s Option

Exercises. None of the documentation Nelson submitted to Quarles & Brady at that time

included information that would indicate that he and Curia had entered into an oral agreement for

the sale of his shares for $4.2 million. In fact, in the Johnson Letter, Nelson specifically stated

that he approached Curia in September 2004 about purchasing his stock with “some conditions,”

but he and Curia met in January 2005 and realized they “were not in agreement with either the

1
Nelson contends that in its written order, the circuit court focused on whether Quarles & Brady
knew about the oral agreement before filing the complaint in April 2005, where the relevant inquiry
should have been whether Quarles & Brady knew about Nelson’s claim before the district court ruled on
the motions for summary judgment. However, the circuit court’s order reflects that it also considered that
“[e]ven after the lawsuit was filed, ongoing discussions and receipt of emails and documents never
revealed such a claim from Nelson.” The court also found that “at no time before the lawsuit was filed, or
until after the district court ruled, did it become clear that Nelson was making the claim that an
enforceable oral agreement existed since 2004.” (Emphasis added.)

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No. 1-17-1653

purchase price or its application.” Although Nelson stated that funding was “available” for the

stock sale through Fifth Third, Nelson did not state that he and Curia had reached an agreement

and that Curia had reneged.

¶ 133 Similarly, none of the documents in the Johnson Packet would indicate to Quarles &

Brady that Nelson and Curia had entered into an oral agreement for the sale of Nelson’s shares

sometime in 2004. Like the Johnson Letter, the Chronology makes no reference to a $4.2 million

oral agreement, and, in fact, Nelson stated that there was “no reason” for him to send letters to

the manufacturers of his “wish” to sell until they had put together a retirement package. The

Stockholders’ Minutes likewise lack any detail about an oral agreement for the sale of Nelson’s

shares and, in any event, are not signed by Curia.

¶ 134 We observe that there was some discussion at trial, and in the briefs before this court,

regarding whether Shifflett and Gatziolis had the Directors’ Resolutions before filing the

complaint. Whether or not Quarles & Brady had these documents before the district court ruled,

however, does not change our conclusion. The Directors’ Resolutions simply stated that the

stockholders would accept an agreement whereby “[Nelson] would sell his 8000 shares in this

corporation (52.7%) to [Curia], and that the manufacturers [would] be contacted to facilitate the

transaction.” At trial Nelson testified that the “agreement” referred to in the Directors’

Resolutions was the same agreement referenced in the Stockholders’ Minutes. The Stockholders’

Minutes provided that it was “resolved that the following conditions of the sale and transfer of

stock from [Nelson] to [Curia] be approved by the Board of Directors.” The Stockholders’

Minutes then listed nine conditions, the first of which provided that the sale of the stock to Curia

be in accord with the 1989 SPA. Gatziolis acknowledged that the Directors’ Resolutions may

have put him on notice of an agreement between Curia and Nelson for the sale of shares, but

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referred to the Stockholders’ Minutes, which were dated the day before and not signed by Curia.

Thus, Gatziolis had no reason to believe that there had been an agreement between Nelson and

Curia. Again, neither the Stockholders’ Minutes nor the Directors’ Resolutions contain any

reference to an oral agreement for $4.2 million.

¶ 135 We also find the November 2004 commitment letter from Fifth Third was insufficient to

put Quarles & Brady on notice of an oral agreement between Nelson and Curia. The letter does

not refer to an agreement, but provides that Fifth Third was committed to lend Plaza $4.2 million

to provide Curia with sufficient funds to buy out Nelson’s ownership interest in Plaza and Mall.

In examining this document, Quarles & Brady could rely on the information provided by Nelson

in the Johnson Letter that, although funding for a stock sale was “available” from Fifth Third,

Nelson and Curia had not reached an agreement. This letter must also be viewed in context with

the other information Nelson provided to Quarles & Brady. For example, on April 27 and 29,

2005, Nelson emailed Gatziolis to provide some context for the Fifth Third commitment letter. In

both emails, Nelson stated that Fifth Third agreed to loan $4.2 million and that would “perhaps”

be the selling price, and it would be “about” what Curia needed to purchase his shares. Gatziolis

testified that this uncertain language did not put him on notice of any agreement between the

parties. Also, in both emails, Nelson indicated that the agreement for the sale of shares included

a retirement package or “perks.” The previous documents Nelson had provided to Quarles &

Brady, including the Chronology and the Stockholders’ Minutes, unequivocally showed that

Curia had not agreed to provide a retirement package, and thus would indicate to Quarles &

Brady that there had been no agreement between the parties.

¶ 136 Similarly, the record shows that while drafting the complaint, Quarles & Brady sent

drafts to Nelson and Korey for their review. In revising the complaint, Nelson and Korey

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specifically amended sections of the complaint to provide that Nelson had approached Curia

about selling his shares, but that Curia did not accept any of Nelson’s offers. Again, in July 2005,

Nelson sent Ken’s Story to Quarles & Brady in which he again stated that he had approached

Curia with an offer to buy his shares, but Curia had not accepted his offers and had refused to

even make a counteroffer. Nelson contends that he stated that Curia did not accept any of his

offers because he was relying on Gatziolis’ legal advice that oral contracts were not enforceable

in Illinois. However, it is a different matter for Nelson to state that Curia orally accepted his

offer, but that it is not enforceable, than it is for Nelson to say that Curia did not accept his

offers. Moreover, Nelson indicated in various documents, including the Chronology, that Curia

did not accept his offers to sell his shares even before the April 20, 2005, meeting where Nelson

claims Gatziolis told him that oral agreements were not enforceable in Illinois.

¶ 137 In short, every documented communication Nelson had with Quarles & Brady until after

the district court’s ruling suggested that Nelson had approached Curia with offers to sell his

shares, but Curia had not accepted. As DiVito testified, if Nelson and Curia had reached an oral

agreement, Nelson would be “screaming it from the rooftops” and not saying that they had not

reached an agreement. Despite Joyce’s testimony that the information Nelson provided to

Quarles & Brady should have put them on notice of the oral agreement, given the abundant

evidence presented suggesting that Curia and Nelson had not reached an agreement, we cannot

say that the circuit court’s ruling was against the manifest weight of the evidence.

¶ 138 Nelson contends, however, that he, Carol, and Korey each testified that at the April 20,

2005, meeting, Nelson told Gatziolis about the oral agreement and Gatziolis told him that it was

not enforceable in Illinois. Nelson asserts that the court “completely ignored” this testimony in

rejecting his claim. The court’s order suggests, however, that the court did not ignore this

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No. 1-17-1653

testimony, but instead accepted Gatziolis’ testimony that Nelson did not tell him about the oral

agreement at the meeting, and that Gatziolis did not tell Nelson that oral agreements are not

enforceable in Illinois. Nelson asserts that this testimony contradicted Gatziolis’ testimony at his

deposition where he stated that he could not recall whether Nelson told him about an oral

agreement; however, this apparent contradiction created a credibility determination that was

within the province of the circuit court to resolve. As discussed, we defer to the judgment of the

circuit court on these issues because the circuit court is in the best position to observe the

conduct and demeanor of the parties and the witnesses. Best, 223 Ill. 2d at 350. The court’s order

implicitly suggests that it accepted Gatziolis’ testimony on this issue and did not accept the

testimony of Nelson, Carol, and Korey. We cannot say, based on the record before us, that such a

determination was against the manifest weight of the evidence.

¶ 139 Nonetheless, Nelson asserts that Gatziolis’ testified at trial he was “generally” aware in

April 2005 that Nelson and Curia had entered into an oral agreement for the sale of Nelson’s

shares for $4.2 million and Curia had reneged. Nelson contends that the trial court’s ruling is

therefore impossible to sustain in light of this admission. To support this contention, however,

Nelson relies on testimony that was taken out of context and that Gatziolis later clarified. At trial,

Nelson’s counsel asked Gatziolis about a letter Nelson had written to Debes that Gatziolis

reviewed in April 2008.

“Q. And what it says here is: You [(Debes)], [Curia] and I met at the corporation

offices in Dixon, Illinois in September of 2004 at which time Mr. Curia and I asked Fifth

Third Bank to loan Mr. Curia our agreed upon purchase price of *** 4,200,000 for my

shares in the two corporations. On November 4th, 2004 we received your commitment

letter stating that you would loan Rick Curia 4,200,000 to purchase my shares in Auto

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No. 1-17-1653

Plaza and Auto Mall. The stock *** purchase was to close by year-end, but Mr. Curia

reneged on our agreed price as stated in your letter.

***

Q. This was the same thing Mr. Nelson told you from the time you first met with

him back in April of ‘05, isn’t it?

A. That he attempted to sell the stock, yes.

Q. Sir, the information that’s in here. Isn’t this precisely the information Mr.

Nelson told you back in April of ’05?

A. There may not have been all this detail, but generally that’s correct.”

Later, Quarles & Brady’s counsel asked Gatziolis about his testimony regarding the letter.

“Q. At any time up to the time this complaint was filed on the next to last day of

April 2005, had Mr. Nelson ever told you that he had reached an oral agreement that Mr.

Curia had agreed to buy his shares and his shares only for $4.2 million?

A. No, he did not.

Q. Had he said something like that to you, is that something you would have

recalled?

A. It would be.”

Viewed in light of Gatziolis’ other testimony, the portion highlighted by Nelson does not support

his contention that Gatziolis admitted that he knew about the oral agreement for $4.2 million and

that the trial court ignored that testimony. As Gatziolis testified, he “generally” knew the

information in the letter, i.e., that Nelson wanted to sell his shares to Curia and that Fifth Third

agreed to loan the money for the purchase, but he denied that Nelson ever told him that he and

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Curia had reached an agreement for the sale of his shares, which was consistent with his other

testimony on this issue.

¶ 140 Nelson also points to another portion of Gatziolis’ testimony that he contends constitutes

an admission by Gatziolis that he knew about the oral agreement for $4.2 million in April 2005.

After Gatziolis’ testimony clarifying his earlier testimony about the letter, Nelson’s counsel’s

asked Gatziolis:

“Q. I think you told us earlier today that right from the very beginning of your

relationship or your meetings with Mr. Nelson, he basically told you what was in that last

letter about having had a $4.2 million agreement and Mr. Curia reneged on it. Remember

that testimony from this morning?

A. Yes.”

This testimony does not constitute an admission by Gatziolis that he knew about the $4.2 million

agreement as Nelson contends, but is rather Gatziolis acknowledging that he recalled his

testimony on this subject matter from earlier that day. Viewed in light of Gatziolis’ unequivocal

testimony that Nelson did not tell him about the $4.2 million oral agreement, we cannot say that

the portions of the Gatziolis’ testimony identified by Nelson render the trial court’s ruling

contrary to the manifest weight of the evidence.

¶ 141 Nelson next contends that, in 2007 and 2008, Quarles & Brady filed pleadings in the

district court asserting that Curia and Nelson had entered into a $4.2 million oral agreement in

2004. Nelson asserts that the evidence shows that Quarles & Brady did not have any additional

information about the oral agreement at that time than it did when the original complaint was

filed in April 2005. This is demonstrably false. The evidence shows that after the district court

ruled in 2006, both Nelson and Korey emailed Shifflett to inform him about the $4.2 million oral

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agreement. Nelson emailed Shifflett in August 2006, stating that he and Curia negotiated and

agreed to a price of “4.2m (stock only, both corps),” but then Curia decided that he did not want

to pay that much. Shifflett testified that this email was the first time he had received any

communication about a potential oral agreement for $4.2 million. Similarly, Korey emailed

Shifflett in November and December 2006 and stated that in November 2004, Nelson, Curia, and

Debes “had a meeting where [Curia] agreed to pay 4.2 million [for] the stock.” Korey suggested

that Quarles & Brady add such a claim to the impending motion. In addition, Shifflett testified

that in early 2008 Nelson told him about an email he had received from Thomas where she stated

that it was Toyota’s understanding that the stock purchase agreement included both Plaza and

Mall and was for $4.2 million. Thus, the record shows that Quarles & Brady had significantly

more information about a potential oral agreement in 2007 and 2008 than it did when it filed the

original complaint in April 2005 or by the time the district court ruled in February 2006.

Accordingly, we find that the circuit court’s holding that Quarles & Brady did not know about

Nelson’s claim for a $4.2 million oral agreement before the district court ruled was not against

the manifest weight of the evidence.

¶ 142 2. The Circuit Court’s Finding that Nelson Failed to Prove that it Was More Likely Than
Not that Nelson Would Have Prevailed on a Breach of Contract Claim for the
$4.2 Million Oral Agreement Was Not Against the Manifest Weight of the
Evidence.

¶ 143 Although we have already found that the circuit court did not err in ruling that Quarles &

Brady did not know about the oral agreement for $4.2 million before the district court ruled, we

also find that even if Nelson had shown that Quarles & Brady did know about the agreement, his

legal malpractice claim would nonetheless fail because he failed to establish the proximate cause

element of this claim. That is, Nelson has failed to establish the “case within a case” aspect of his

legal malpractice action. See Orzel v. Szewczyk, 391 Ill. App. 3d 283, 290 (2009). Nelson’s claim

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is fundamentally that he would have prevailed on a breach of oral contract action against Curia if

Quarles & Brady had properly investigated and raised the claim of an oral agreement in the

Underlying Litigation. In order prevail on a claim for breach of contract, a plaintiff must prove

(1) the existence of a contract, (2) the performance of the conditions precedent, (3) breach by

defendant, and (4) damages as result of the breach. Van Der Molen v. Washington Mutual

Finance, Inc., 359 Ill. App. 3d 813, 823 (2005). Here, Nelson has failed to establish even the

existence of a contract.

¶ 144 In contending that he would have succeeded on a breach of contract claim in the

Underlying Litigation, Nelson asserts that the uncontradicted evidence shows that he and Curia

entered into an enforceable oral agreement for the sale of his shares only for $4.2 million. He

maintains that the agreement for retirement benefits or “perks” was a separate agreement, and

not a condition to the stock sale agreement. Nelson asserts that Curia’s testimony and

contemporaneous conduct, Joyce’s testimony, and the evidence available from the automobile

manufacturers and Fifth Third demonstrates that he would have prevailed on this claim in the

district court if Quarles & Brady had investigated and raised this claim.

¶ 145 a. Agreement for Shares Only

¶ 146 As a threshold matter, we observe that the record does not support Nelson’s contention

that the oral agreement Nelson contends existed was for the “stock only” and that the retirement

benefits or perks were a separate agreement. Nelson contends that the oral agreement for the sale

of Nelson’s shares for $4.2 million was already in existence when Nelson approached Curia

regarding the retirement benefits. Thus, Nelson contends that Curia’s refusal to provide the

retirement benefits has no bearing on Curia’s acceptance of the stock sale agreement. Nelson

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asserts that the documentary evidence and Curia and Nelson’s testimony support his claim that

the agreements were separate.

¶ 147 However, Nelson’s own statements support the proposition the stock purchase agreement

and the retirement benefits or perks agreement was one agreement. For instance, in the

Chronology, Nelson stated Curia had been “difficult” in extending to him the things he needed

for retirement and putting together a “retirement package.” Nelson stated that he would be

contacting the manufacturers even though there was “no reason” for him to send a letter of his

“wish to sell until we have a [retirement] package put together.” In Curia’s response, he stated

that he did not see anywhere in their “agreement” that he was required to provide Nelson with a

retirement package. Curia testified that he was referring to their written agreements. Similarly, in

the Johnson Letter, Nelson stated that when he approached Curia about selling his shares, he

“gave him some conditions at that time for the purchase” (emphasis added), which included most

of the nine items listed in the Stockholders’ Minutes. Again, in the March 14, 2005, letter Nelson

sent to Curia, Nelson stated that in August 2004 he offered Curia the opportunity to purchase his

stock in Plaza and Mall “upon certain terms and conditions” that were set forth in a letter Nelson

left on his desk on December 3, 2004. Nelson represented that those terms and conditions were

that the October 6, 2004, Stockholders’ Minutes, which outlined Nelson’s retirement package, be

signed by both parties, that the newly agreed leases for the properties owned by CRANK be

signed by both parties, and that the September 30, 2004, GM financial statement be used for the

sale price.

¶ 148 Nelson reiterated that the stock sale offer and the retirement package were one agreement

in his subsequent correspondences with Quarles & Brady. For instance, in Nelson’s April 27,

2005, email to Gatziolis, Nelson stated that the $4.2 million figure would “perhaps being the

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selling price including all the perks.” (Emphasis added.) Similarly, in Nelson’s April 29, 2005,

email to Gatziolis, Nelson identified the issues that he believed needed to be addressed, including

a “Stock Sale which includes some type of Retirement Package.” (Emphasis added.) Again, in a

September 17, 2005, email to Shifflett, Nelson stated that when he approached Curia about

retiring in July 2004, he put together a retirement package. In fact, both Gatziolis and Shifflett

testified that they believed that Nelson would not accept a settlement offer or sell his shares

without a retirement package. Nelson’s correspondences support that conclusion. Nelson did not

indicate his belief that the purported oral agreement was for the sale of stock only until his email

to Shifflett and Cahill on August 29, 2006. Even in that email, Nelson stated that when he and

Curia began negotiating in 2004, they used the 2000 agreement as “base” and then “began

adding other perks.”

¶ 149 The fact that Curia did not sign the Stockholders’ Minutes is further evidence that the

proposed stock sale and the retirement package were one agreement. The Stockholders’ Minutes

were prepared one day before the Directors’ Resolutions, which Curia did sign, and contained

the conditions of Nelson’s “retirement package.” Curia testified that he did not sign the

Stockholders’ Minutes because he “agreed to buy the stock but not all the additional conditions

that were listed.” Nelson also testified that Curia refused to sign the Stockholders’ Minutes

because Curia believed it was “too much.” Clearly, if both Curia and Nelson believed that there

was already an agreement for the sale of stock alone, the parties would have followed through on

the stock purchase and handled the retirement package in a separate agreement. Instead, the

evidence suggests that Nelson conditioned the stock sale on Curia providing a retirement

package and Curia did not agree to those terms. In any event, the circuit court’s determination

that the proposed stock sale and retirement package were one agreement was not against the

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manifest weight of the evidence, given the ample evidence discussed above indicating that they

were one agreement. Accordingly, we find that the circuit court did not err in finding that Nelson

would not have prevailed on a breach of contract claim in the Underlying Litigation where the

evidence shows that Nelson’s offer to Curia was to purchase the stock and provide a retirement

package, and Curia did not accept. Even if we were to find that Nelson had adequately proved

that the purported oral agreement was for the sale of his stock only, we would nonetheless find

that Nelson failed to establish that it would be more likely than not that he would succeed on this

claim before the district court for the reasons discussed below.

¶ 150 b. Curia’s Testimony and Contemporaneous Conduct

¶ 151 Nelson first contends that Curia acknowledged at trial that he entered into an agreement

with Nelson for the sale of the shares only, and his contemporaneous conduct at the time of the

agreement represents evidence of the agreement. Nelson points to Curia’s testimony regarding

his perception of their agreement in October 2004, at the time they signed the Directors’

Resolutions.

“Q. So by the time you signed [the Directors’ Resolutions] *** you know what it

was at that time?

A. Sure.

Q. And then you told us that you proceeded after, so you had an agreement as of

that date to buy the shares only?

A. I believed I had an agreement.”

Curia’s testimony illustrates that at the time he signed the Directors’ Resolutions, he believed

that he had an agreement to buy Nelson’s shares for a “sum certain.” Nelson contends that this

constitutes an admission by Curia that they had entered into an agreement for the purchase of

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Nelson’s stock only. Under questioning from Quarles & Brady’s counsel, however, Curia

testified that the agreement that he believed was in place at the time he signed the Directors’

Resolutions in October 2004 was an agreement under the terms of the 1989 SPA and the “written

agreements that [they] had *** in place for years,” i.e., the 1989 SPA, the 1993 Modification,

and the 2000 Agreement. In fact, when asked directly about the oral agreement, Curia denied that

he had ever accepted to buy Nelson’s shares for $4.2 million.

“Q. And, sir, is it true that at no time in the year 2004 did you ever agree to pay

Mr. Nelson $4.2 million for his shares as an agreement, an oral agreement, separate from

what the 1989 stock purchase agreement was?

A. Absolutely never.”

¶ 152 Curia’s contemporaneous conduct also does not support Nelson’s contention that he and

Curia entered into an oral agreement for the purchase of Nelson’s shares only. First, the Fifth

Third commitment letter does not serve as proof of an oral agreement. Curia testified that he

intended to use the funds to purchase Nelson’s shares pursuant the 1989 SPA and for working

capital or to pay off other loans. Debes testified, however, that based on the terms of the loan

commitment, Curia could use the funds only to purchase Nelson’s shares. He testified, however,

that when he met with Curia and Nelson in September 2004, he understood that they had not

reached an agreement and that they were still negotiating toward a deal because they had

different views about an acceptable price for the shares. Debes testified that it was common in a

situation like Curia and Nelson’s for one party to get preapproval for a loan before the final

terms of the agreement were established. Thus, Curia applying for and receiving a loan

commitment from Fifth Third does not serve as proof of an oral agreement.

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¶ 153 Similarly, Curia’s contact with the automobile manufacturers does not indicate that the

parties entered into an oral agreement. Nelson contends that the record shows that Curia

submitted documentation to the automobile manufacturers for approval of the agreement

demonstrating that they had, in fact, reached an agreement. However, the record shows that

Curia began submitting documentation in anticipation of exercising his 1989 SPA options. Curia

sent his response to the Chronology on November 4, 2004, indicating his intent to exercise his

options. That same day he received the loan commitment letter from Fifth Third. On November

3, 4, and 10, Curia submitted documentation to the automobile manufacturers, including the

Toyota Minimum Standards, the Toyota Dealer Performance Evaluation, Dealer Biographical

Information, and an Application for Nissan Dealer Sales and Service Agreement. On November

4, 2004, Curia also submitted an Investment Proposal Summary to GM, to which he attached the

letter from Fifth Third committing to the $4.2 million loan. Curia’s contemporaneous conduct

therefore suggests that there was no previous agreement, and that he started seeking

manufacturer approval only after he notified Nelson of his intent to exercise his options under

the 1989 SPA. Thus, Curia’s testimony and contemporaneous conduct does not support Nelson’s

contention that he would have prevailed on his claim for an oral agreement if it had been raised

in the district court.

¶ 154 c. Joyce’s Testimony

¶ 155 Nelson next contends that his expert, Joyce, testified that it was more probably true than

not that Nelson would have won a breach a contract claim for breach of oral agreement if

Quarles & Brady had pursued such a claim in the district court. Joyce acknowledged that at his

deposition he opined that Nelson’s odds of success on this claim were “60/40.” Nelson claims

that Quarles & Brady failed to elicit an opinion from their expert, DiVito, on this issue and

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“effectively conceded” Joyce’s opinion that Nelson would have prevailed. The record shows,

however, that Quarles & Brady did, in fact, elicit an opinion from DiVito on this subject, and his

opinion contradicted Joyce’s.

“Q. Sir, do you have an opinion whether the documentary information provided to

Quarles and Brady by Mr. Nelson demonstrated approvable [sic] oral agreement for the

sale of those shares?

***

A. That the documents do not establish such an agreement.

Q. What is that opinion based on?

A. From the very beginning before [Quarles & Brady] even talked to [Nelson], he

was bemoaning the fact that Curia would not negotiate with him, that he said no to

everything. And although he continued negotiating, he never agreed to anything and there

is no reference whatsoever to a specific oral agreement.”

Thus, DiVito did contradict Joyce’s testimony on this issue, testifying that the evidence did not

show a provable oral agreement for the sale of the shares, i.e., that Nelson would not have

prevailed on this claim before the district court. It is well settled that “ ‘[a]s the trier of fact, the

judge may accept one expert opinion over another.’ ” Robrock v. County of Piatt, 2012 IL App

(4th) 110590, ¶ 42 (quoting City of Marseilles v. Radke, 307 Ill. App. 3d 972, 977 (1999)). Here,

the circuit court plainly accepted DiVito’s testimony on this issue. Such a decision was within

the discretion of the circuit court, and we cannot say, based on Joyce’s testimony and the other

evidence presented, that the circuit court’s ruling was against the manifest weight of the

evidence.

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¶ 156 d. Automobile Manufacturers

¶ 157 Nelson next contends that the evidence provided by the automobile manufacturers proved

the existence of the oral agreement for $4.2 million. Nelson asserts that the evidence

demonstrates that in October 2004, both Nelson and Curia applied to the automobile

manufacturers for approval of the stock sale. Nelson points out that both Zangri and Nour

testified that the manufacturers will not process an application for the sale of shares unless the

parties notify them that they have entered into an agreement. Nelson contends that the crucial

piece of evidence demonstrating the existence of the oral agreement is Thomas’s email to

Nelson, in which she stated that her notes showed that Curia informed Toyota that he had

reached an agreement to purchase Nelson’s shares for $4.2 million.

¶ 158 At trial, Thomas acknowledged sending Nelson an email stating that the purchase price to

Toyota’s “understanding” was $4.2 million, but she acknowledged that she did not know the

source of that figure. She testified that there would likely be some sort of documentation to

support the information in her email, but she did not have a purchase agreement and had no

personal knowledge of what happened between Zangri and Nelson or Curia when the process

began in October and November 2004. For his part, Zangri testified that he received the

Directors’ Resolutions and, based on those documents, made an “assumption” that Curia had

negotiated a deal to buy out Nelson’s remaining shares. In fact, Thomas sent a letter to Nelson on

January 13, 2005, showing that Toyota still needed a purchase agreement in order for Toyota to

continue their evaluation of the proposed ownership change. Thus, neither Zangri nor Thomas

provided corroborating documentation to establish the existence of the oral agreement for $4.2

million. At most, Zangri offered an “assumption” that Curia and Nelson negotiated a deal, and

Thomas offered a notation that Curia agreed to buy Nelson’s shares for $4.2 million. However,

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Thomas had no personal knowledge of any such agreement and could not provide any evidence

to support that figure or an agreement.

¶ 159 Similarly, Nour from Nissan testified that, based on his experience, there would need to

be an asset purchase agreement to start the approval process, but he could not say whether one

was provided in Curia and Nelson’s case. And, in fact, Nour testified that he had not seen any

documentation that suggested that Nelson and Curia entered into an oral agreement for the sale

of Nelson’s shares for $4.2 million. Although Nissan conditionally approved the proposed stock

purchase agreement on December 21, 2004, their approval letter does not state a purchase price

and is conditioned upon the receipt of additional documentation, including stock certificates and

documentation from Fifth Third.

¶ 160 We further observe that in the October 28, 2004, letters that Nelson submitted to the

automobile manufacturers, he informed them that he “proposes to sell” his shares to Curia, not

that they had reached an agreement for the sale of his shares. Also, as discussed above, the fact

that Curia submitted documentation to the automobile manufacturers, seeking approval for the

stock sale, does not serve as evidence of the oral agreement where Curia submitted the

documentation in anticipation of exercising his options and after informing Nelson of his intent

to do so on November 4, 2004. Accordingly, we cannot say that the court’s ruling was against

the manifest weight of the evidence based on the evidence available from the automobile

manufacturers.

¶ 161 e. Fifth Third Bank and Debes

¶ 162 Nelson finally contends that the evidence provided by Fifth Third and Debes proved the

existence of the oral agreement for $4.2 million. Nelson acknowledges that Debes testified that

Curia and Nelson did not tell him that they had an agreement in place, but contends that this

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testimony is contradicted by Debes’ contemporaneous conduct and other testimony. Nelson

asserts that the fact that Curia paid Fifth Third’s lawyers to prepare the documents relating to the

$4.2 million loan proves the agreement was in place. Nelson notes that the loan documents

provided that the funds were to be used for the purchase of Nelson’s shares and Debes testified

that Curia could use the funds only for that the purpose. Debes also knew that the manufacturers

would not process Nelson and Curia’s applications unless they had an agreement in place, and he

sent loan documents to the manufacturers at Curia’s request to facilitate the approval process.

¶ 163 We initially observe that, like Curia’s other communications with the automobile

manufacturers, Debes did not send the loan documentation to the automobile manufacturers until

after Curia notified Nelson of his intent to exercise his options. This is consistent with Curia’s

testimony that he needed to show the manufacturers that he had the funds necessary to purchase

Nelson’s shares. Although Debes testified that it would be inconsistent with the purpose of the

loan for Curia to use the funds for any purpose other than purchasing Nelson’s shares, he also

testified that it was common a situation like Nelson and Curia’s for the buyer to get preapproval

for a loan before the final terms of the agreement were worked out. Debes testified that while he

was generating the loan documents, he understood that Curia and Nelson were still negotiating

because they could not agree on a price for the shares.

¶ 164 Debes's testimony and the documentation from Fifth Third thus suggest that Curia and

Nelson approached Debes in anticipation of reaching an agreement for the shares. Curia sought

preapproval so that he would be able to show the manufacturers that he had the funds necessary

to complete the purchase. After the parties were unable to come to an agreement about the price

for the shares, Curia notified Nelson of his intent to exercise his options under the 1989 SPA.

Curia directed Debes to send the loan documentation to the manufacturers to facilitate the

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approval process. Debes did not testify that Nelson and Curia had reached an oral agreement, and

none of the loan documentation otherwise references an agreement. Accordingly, we cannot say

that the court’s ruling was against the manifest weight of the evidence based on the evidence

available from Debes and Fifth Third.

¶ 165 f. Conclusion

¶ 166 Accordingly, we find that the circuit court did not err in finding that Nelson failed to

establish the proximate cause aspect of his legal malpractice claim with regard to Nelson’s claim

for an oral agreement for $4.2 million. The evidence suggests that the proposed agreement was

for the sale of Nelson’s shares as well as the retirement package or perks and Nelson failed to

establish Curia’s acceptance of his offers. Curia’s testimony and contemporaneous conduct does

not suggest that he entered into an oral agreement to purchase Nelson’s shares only for $4.2

million. Joyce’s expert testimony was contradicted by DiVito, who testified that Nelson would

not have been able to demonstrate a provable oral agreement in the Underlying Litigation, and it

was within the circuit court’s discretion to accept DiVito’s testimony. In addition, the evidence

from third parties—the automobile manufacturers, Debes, and Fifth Third—did not establish the

existence of an oral agreement. We therefore find that the circuit court’s ruling that Nelson failed

to establish that it was more likely than not that he would have succeeded on a breach of contract

claim before the district court was not against the manifest weight of the evidence.

¶ 167 C. Quarles & Brady’s Litigation Strategy

¶ 168 Nelson next contends that the circuit court erred in rejecting his claims that Quarles &

Brady was negligent for failing to assert two defenses to Curia’s action for specific performance.

Nelson asserts that Quarles & Brady should have raised a claim that Curia’s Option Exercises

were invalid because they were not the mirror image of the options in the 1989 SPA and should

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have argued that the parties’ written agreements were ambiguous. Nelson contends that had

Quarles & Brady raised these arguments before the district court, they would have been

successful and would have defeated Curia’s Option Exercises. Nelson further asserts that the

circuit court erred in finding that Quarles & Brady’s negligence in failing to raise these claims

did not proximately cause his damages because he settled the case after the Seventh Circuit’s

remand where there was no practical alternative and continued litigation was unnecessary to

preserve his legal malpractice claim.

¶ 169 As a threshold matter, we observe that Illinois law “distinguishes between negligence and

mere errors of judgment.” Shanley v. Barnett, 168 Ill. App. 3d 799, 803 (1988). The question of

whether an attorney has exercised a reasonable degree of care and skill is one of fact, and expert

testimony is generally required to establish the standard of care against which to measure the

attorney’s conduct. See Barth v. Reagan, 139 Ill. 2d 399, 407 (1990). 2 Here, both parties

presented expert testimony regarding whether Quarles & Brady’s litigation decisions deviated

from the standard of care.

¶ 170 1. The Circuit Court Did Not Err in Finding that Quarles & Brady Did Not Deviate from
the Standard of Care in Not Raising a Claim that Curia’s Option Exercises Were
Ineffective Because They Were Not the Mirror Image of the Options in the 1989
SPA.

¶ 171 Nelson first contends that Quarles & Brady was negligent in failing to challenge Curia’s

Option Exercises by arguing that the number of shares he sought to purchase in his Option

Exercises did not match the number of shares listed in the 1989 SPA options. As an example,

2
We observe that there is a generally recognized exception to the rule requiring expert testimony
to establish the standard of care “where the common knowledge or experience of lay persons is extensive
enough to recognize or infer negligence from the facts, or where an attorney’s negligence is so grossly
apparent that a lay person would have no difficulty in appraising it.” Barth, 139 Ill. 2d at 407. We find,
however, that this exception is not applicable to the case at bar and expert testimony was necessary to
establish the standard of care.

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Nelson points out that the 1989 SPA provided Curia with a second option to purchase 2009

shares of Plaza, but Curia’s March 2, 2005, option exercise letter sought to purchase only 193

shares. Nelson asserts that Curia’s March 3, 2005, option exercise was similarly defective

because Curia “demanded” that Nelson sell his interest in Plaza’s land and buildings, but the

1989 SPA provided that Curia must offer to purchase the land and buildings.

¶ 172 Under second option in the 1989 SPA, Curia could purchase 2009 shares of stock of

Plaza and 300 shares of Mall, “which shares with previous purchased shares would represent

49% of the issued and outstanding shares of capital stock in said corporations.” The third option

provided that “[a]fter exercising the first two options to purchase as provided in this Agreement,

[Curia] shall have a third option to purchase from [Nelson] the remaining 4,171 shares of stock

in [Plaza] and 612 shares of stock in [Mall] provided that [Curia] also offer to purchase the land

and four buildings of the [Plaza] dealership *** at its appraised value.”

¶ 173 In his March 2, 2005, option exercise notices, Curia stated that the second option in the

1989 SPA “gives me the right to purchase from you an additional number of shares of capital

stock of [Plaza] and [Mall] that would give me 49% of the outstanding capital stock of each

Corporation, which I calculate to equal 193 shares and 170 shares, respectively.” In his March 3,

2005, option exercise, Curia sought to purchase Nelson’s remaining shares in Plaza and Mall and

offered to also purchase Plaza’s land and buildings in accordance with the third option in the

1989 SPA.

¶ 174 Joyce testified that a reasonably careful lawyer, seeking to prevent Curia from exercising

the options in his March 2005 Option Exercises, would have raised the argument that Curia’s

Option Exercises were defective because they were not a mirror image of the options in the 1989

SPA as required by Illinois law. Joyce testified that as a result of the corporations’

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recapitalization after the 1989 SPA, it would have been impossible for Curia to exercise his

options under the terms of the agreement because the 1989 SPA did not permit the percentages

or number of shares to be modified because of recapitalization. Joyce opined that if Quarles &

Brady had raised an argument that Curia’s Option Exercises were defective because they were

not a mirror image of the options in the 1989 SPA, it was more probably true than not that the

argument would have “prevailed.”

¶ 175 Joyce acknowledged that Quarles & Brady did raise an argument before the district court

that the Option Exercises were defective because Curia attempted to use the price formula in the

1993 Modification rather than the formula provided by the options in the 1989 SPA, but that

argument was rejected by the district court. Joyce testified that although Quarles & Brady made

this mirror image argument, it included the wrong facts to support the argument, and should have

raised the discrepancy in the number of shares.

¶ 176 In contrast, DiVito testified that the standard of care did not require Quarles & Brady to

raise an alternative argument that Curia’s Option Exercises were defective because the number

of shares he sought to purchase did not match the 1989 SPA. DiVito testified that the second

option in the 1989 SPA provided Curia with the option to purchase a percentage of the remaining

shares, 49%, and the third option permitted him to purchase the “remaining” shares, which is

what Curia sought in his Option Exercises. DiVito also noted that, in his review of Quarles &

Brady’s materials, a draft brief contained an argument that Curia’s Option Exercises were invalid

because the number of shares he sought to purchase were different from the options in the 1989

SPA. DiVito testified that the fact that this argument did not appear in the final draft of the brief

suggests that Quarles & Brady made a judgment to not include this argument, which was

reasonable and consistent with the standard of practice.

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¶ 177 The circuit court’s order demonstrates that it clearly accepted DiVito’s testimony on this

issue and not Joyce’s. As discussed, it was within the province of the trial court to accept

DiVito’s testimony over Joyce’s on this issue. See Robrock, 2012 IL App (4th) 110590, ¶ 42.

The trial court is accorded such deference because it is in the best position to resolve conflicting

testimony and observe the witnesses’ demeanor and determine their credibility. Radke, 307 Ill.

App. 3d at 977 (citing Flynn v. Cohn, 154 Ill. 2d 160, 169 (1992)). Here, the court was required

to weigh conflicting testimony from the expert witnesses. The court could also consider

Shifflett’s testimony that he considered raising an argument regarding the discrepancy in the

number of shares, but ultimately decided not to, as evidenced by the draft brief containing this

argument. Shifflett testified that he did not raise the issue because the 1989 SPA options granted

Curia the right to purchase “49%” and then the “remaining” shares and this language was echoed

in Curia’s Option Exercises, as DiVito also acknowledged.

¶ 178 Nelson contends, however, that Shifflett testified that his decision to not raise this

argument was based on McCarthy v. Johnson, 122 Ill. App. 3d 104 (1983). Nelson asserts that

there is no evidence that Quarles & Brady was aware of this case during Quarles & Brady’s

representation of Nelson and that McCarthy does not even support Shifflett’s position, as Joyce

testified. As discussed, the circuit court heard Shifflett’s testimony that he relied on McCarthy to

support his decision and heard Joyce’s testimony that McCarthy did not support Shifflett’s

position. The court also heard DiVito’s testimony that Quarles & Brady did not deviate from the

standard of care in not raising a mirror image argument because the percentages listed in Curia’s

Option Exercises matched the percentages listed in the 1989 SPA options, as Shifflett also

testified. Thus, there was conflicting testimony on this issue and, as noted, in such situations we

accord deference to the decisions of the circuit court. Radke, 307 Ill. App. 3d at 977. Here, there

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was ample evidence to support the circuit court’s conclusion, and we cannot say, based on the

record before us, that circuit court’s decision was against the manifest weight of the evidence.

¶ 179 Finally, although not expressly addressed by either expert, Nelson contends that Curia’s

attempt to exercise his third option was defective because he “demanded” that Nelson sell

Plaza’s land and buildings rather than merely offering to purchase them as provided in the 1989

SPA. In his March 3, 2005, option exercise notice, however, Curia noted that the third option

“gives me the right to purchase your remaining shares of the Corporations; [sic] provided that I

also offer to purchase the land and four buildings of [Plaza].” Curia then stated that he was

giving notice of the exercise of his option to “purchase all of your remaining shares of capital

stock in the Corporations and the Land and Buildings for the consideration and upon the terms

set forth in the [1989 SPA] and the [1993 Modification].” This language does not suggest a

“demand” that Nelson sell his interest in Plaza’s land and buildings, but rather shows Curia’s

intent to comply with the terms of the 1989 SPA. Thus, there was no basis for Quarles & Brady

to raise an argument concerning the Curia’s March 3, 2005, option exercise in the district court.

¶ 180 Even assuming, arguendo, that we determined that Nelson had adequately established

that Quarles & Brady deviated from the standard of care in failing to raise this argument, we

would nonetheless find that he failed to establish the proximate cause or “case within a case”

element of his legal malpractice claim on this issue. Although Joyce testified that, in his opinion,

it was more likely true than not that Nelson would have prevailed on this argument if Quarles &

Brady had raised it before the district court, DiVito testified that such an argument would be

meritless because Curia’s Option Exercises essentially comported with the 1989 SPA options by

seeking to purchase “49%” and the “remaining” shares outstanding. As discussed, the circuit

court accepted the testimony of DiVito over Nelson on this issue, and that is consistent with its

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role as the trier of fact. The record also shows that the district court rejected a “mirror image”

argument by Quarles & Brady regarding the formula for determining the price of the shares.

Furthermore, as illustrated above, Nelson’s contention that Curia’s March 3, 2005, option

exercise was defective because Curia “demanded” that Nelson sell Plaza’s land and buildings is

similarly meritless. Accordingly, we cannot say that the circuit court’s ruling that Nelson failed

to establish the proximate cause element of his legal malpractice claim with respect to this

argument was against the manifest weight of the evidence.

¶ 181 2. The Circuit Court Did Not Err in Finding that Quarles & Brady Did Not Deviate from
the Standard of Care in Not Raising a Claim that the Written Agreements Were
Ambiguous.

¶ 182 Nelson finally contends that Quarles & Brady deviated from the standard of care in

failing to argue that the written agreements were ambiguous. Nelson asserts that this argument

would have defeated Curia’s motion for summary judgment because an ambiguous contract

cannot be interpreted as a matter of law and therefore cannot be disposed of by summary

judgment. Nelson maintains that if Quarles & Brady had raised this argument, the parties would

have been permitted to enter extrinsic evidence showing that when Curia and Nelson entered into

the 1993 modification, they intended to dissolve the options in the 1989 SPA. Nelson contends

that Quarles & Brady also would have been able to introduce extrinsic evidence regarding the

meaning of the word “subsequently” in Paragraph 5 of the 1993 Modification, and would have

been able to question Curia about his understanding of that paragraph at a deposition.

¶ 183 As with the mirror image argument, the parties offered conflicting expert testimony on

this issue. Joyce testified that reading Nelson and Curia’s written agreements together, there is no

clear specification for how Curia could exercise his options. Joyce testified that if Quarles &

Brady had argued ambiguity, it would have prevented a summary judgment ruling and the parties

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could have introduced extrinsic evidence regarding what Curia believed when he entered into the

agreements. Joyce opined that within a reasonable degree of certainty, an argument that the

contracts were ambiguous would have prevailed.

¶ 184 In contrast, DiVito testified that it was reasonable under the circumstances for Quarles &

Brady to argue that the agreements were not ambiguous. He opined that Quarles & Brady’s

argument that Paragraph 5 of the 1993 Modification negated any unilateral right by Curia to

exercise the options in the 1989 SPA was a reasonable one. DiVito further testified that there

was no downside to arguing that the agreements were not ambiguous because the district court

could find ambiguity regardless of what the parties claimed.

¶ 185 As discussed above, the circuit court was entitled to accept DiVito’s testimony over

Joyce’s on this issue. The court also heard Shifflett’s testimony that he believed it was not in

Nelson’s best interest to advance an argument that the agreements were ambiguous in the motion

for summary judgment. Shifflett testified that he considered doing discovery on the issue of

ambiguity, but believed that Quarles & Brady had a good basis to argue that the agreements were

not ambiguous, given the language that Nelson and Curia used in them. Shifflett believed that it

would not have been in Nelson’s best interest to spend money taking depositions to try to prove

an ambiguity.

¶ 186 Nelson contends, however, that if Quarles & Brady had raised a claim that the

agreements were ambiguous, it could have challenged Curia’s assertion that, in Paragraph 5 of

the 1993 Modification, the parties intended to use the word “previously” instead of

“subsequently.” The record shows, however, that Quarles & Brady did challenge this assertion in

their briefing before the district court. In conjunction with arguing that the agreements were not

ambiguous, Quarles & Brady contended that the court should not accept Curia’s interpretation of

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Paragraph 5 of the 1993 Modification and should enforce the contract as written, which would

require Curia to negotiate with Nelson if he wished to purchase his shares. Given the evidence

presented, we cannot say that the circuit court’s findings “appear to be unreasonable, arbitrary, or

not based on the evidence.” Eychaner, 202 Ill. 2d at 252. Accordingly, we find that the circuit

court’s ruling that Nelson failed to demonstrate that Quarles & Brady was negligent in deciding

to not argue that the agreements were ambiguous was not against the manifest weight of the

evidence.

¶ 187 We further find that Nelson has failed to establish the “case within a case” aspect of his

legal malpractice claim with respect to his argument that Quarles & Brady should have raised a

claim that the agreements were ambiguous. Nelson asserts that such an argument would have

permitted Quarles & Brady to submit extrinsic evidence to show the parties’ intent with respect

to the agreements, but Nelson did not identify any evidence in the circuit court or before this

court in support of this claim. At trial, Joyce testified that Quarles & Brady may have been able

to offer testimony from the person who drafted the contracts or the corporations’ accountants,

but acknowledged that he did not know what these witnesses would say. Joyce also testified that

Quarles & Brady could depose Curia, who might testify that he did not know what the word

“subsequently” meant in Paragraph 5 of the 1993 Modification. Nelson also offered his own

testimony that he and Curia intended to eliminate the 1989 SPA options when they entered into

the 1993 Modification.

¶ 188 Contrary to Nelson’s testimony that he and Curia intended to abrogate the 1989 SPA

options when they entered into the 1993 Modification, Curia’s conduct suggests otherwise. Most

notably, Curia notified Nelson of his intent to exercise those options, once in November 2004

and again in March 2005. On September 2, 2005, Curia submitted an affidavit in the district

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court in which he averred that he did not believe that the 1993 Modification abrogated the 1989

SPA options. Joyce identified some potential witnesses who could offer extrinsic evidence, but

offered no testimony regarding what they might say and Nelson offered no other evidence to

suggest that these potential witnesses could offer any admissible extrinsic evidence. Thus,

Nelson has failed to identify any evidence, other than this own testimony, that could have been

submitted as extrinsic evidence if Quarles & Brady had raised a claim that the written

agreements were ambiguous in the district court. Accordingly, we find that the circuit court’s

ruling that Nelson failed to establish the proximate cause element of his legal malpractice claim

with respect to this argument was not against the manifest weight of the evidence. 3

¶ 189 III. CONCLUSION

¶ 190 For the reasons stated, we affirm the judgment of the circuit court of Cook County.

¶ 191 Affirmed.

3
We observe that the circuit court found that Nelson failed to establish the proximate cause
element of this claim and that Quarles & Brady was negligent in failing to raise a claim that Curia’s
Option Exercises were defective because they were not the mirror image of the 1989 SPA options. The
circuit court found that Nelson elected to settle the case with Curia after the Seventh Circuit reversed and
remanded the case and thus forfeited his right to pursue these claims on remand. Both parties addressed
this issue in their briefs before this court; however, we find that it is unnecessary to examine this issue
where we have determined that Nelson failed to establish the proximate cause element of these claims for
the reasons discussed above. Although the circuit court did not rely on the factors identified by this court
in rendering its judgment, we observe that we may affirm the circuit court’s ruling on any basis in the
record, regardless of whether the circuit court relied on those grounds and regardless of whether the
circuit court’s reasoning was correct. Leonardi v. Loyola University Chicago, 168 Ill. 2d 83, 97 (1995).

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