2019 IL App (3d) 170757
Opinion filed April 10, 2019
____________________________________________________________________________
IN THE
APPELLATE COURT OF ILLINOIS
THIRD DISTRICT
2019
PARTNERS FOR PAYMENT RELIEF ) Appeal from the Circuit Court
DE IV, LLC, ) of the 13th Judicial Circuit,
) Bureau County, Illinois.
Plaintiff, )
)
v. )
)
JOHN DAILY, UNKNOWN OWNERS and )
NONRECORD CLAIMANTS, )
) Appeal No. 3-17-0757
Defendants ) Circuit No. 16-CH-73
)
(John Daily, )
)
Third-Party Plaintiff-Appellant, )
)
v. )
)
Barash & Everett, LLC, and Clinton A. Block, ) Honorable
) Cornelius J. Hollerich,
Third-Party Defendants-Appellees). ) Judge, Presiding.
____________________________________________________________________________
JUSTICE O’BRIEN delivered the judgment of the court, with opinion.
Justices McDade and Wright concurred in the judgment and opinion.
____________________________________________________________________________
OPINION
¶1 The defendant and third-party plaintiff, John Daily, appealed the dismissal with prejudice
of his third-party complaint against the third-party defendants, Barash & Everett, LLC (Barash),
and Clinton A. Block, his former attorneys, for implied indemnity.
¶2 FACTS
¶3 On November 21, 2016, the plaintiff, Partners for Payment Relief DE IV, LLC (Payment
Relief), an assignee of the mortgagee, filed a complaint to foreclose a mortgage against Daily,
alleging that Daily, the mortgagor, had not paid on the mortgage since June 2006. The mortgage
was a second mortgage, entered into on May 24, 2004, for a principal sum of $31,677.
¶4 On February 24, 2017, Daily filed a third-party complaint for implied indemnity against
the third-party defendants, Barash and Block, alleging that Daily had been advised by the third-
party defendants that the second mortgage was stripped off or avoided in Daily’s Chapter 13
bankruptcy proceedings. Daily alleged that the third-party defendants had been retained as his
attorneys in his bankruptcy proceedings that commenced in June 2006. The third-party complaint
alleged breach of contract, breach of fiduciary duty, and professional negligence in that the third-
party defendants failed to timely seek a discharge of the subject mortgage and failed to provide
Daily with competent legal advice.
¶5 The third-party defendants filed a motion to dismiss the third-party complaint pursuant to
section 619(a)(5) of the Code of Civil Procedure (Code) (735 ILCS 5/2-619(a)(5) (West 2016)),
contending that the complaint was untimely under the statutes of limitations and repose
contained in section 214.3(b) and (c) of the Code (id. § 13-214.3(b), (c)). The motion to dismiss
alleged that Block filed a Chapter 13 voluntary petition in bankruptcy on behalf of Daily on June
22, 2006. On March 16, 2010, Justin Raver, the managing partner of Barash, substituted as
attorney of record in the bankruptcy proceedings and, on June 23, 2011, filed a motion to modify
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or amend the plan to correct the treatment of the second mortgage, but that motion was denied on
July 26, 2011. The motion to modify acknowledged that there had been a significant mistake in
the Chapter 13 plan regarding the treatment of the second mortgage. The bankruptcy case was
closed on November 21, 2011. The motion to dismiss further alleged that Daily was aware as
early as 2010 that the second mortgage had not been stripped off in the bankruptcy case. Further,
the motion to dismiss alleged that neither Block nor Barash had performed any legal work for
Daily in connection with the bankruptcy since 2010 and had not received fees for services related
thereto since 2006.
¶6 In response to the motion to dismiss, Daily referenced and attached several e-mails
between himself and employees of Barash after 2006 regarding the second mortgage. The e-mail
dated February 28, 2013, from attorney Raver at Barash, told Daily to “Keep me advised as to
current events.” An e-mail dated December 6, 2013, stated: “Justin Raver reviewed your e-mail.
He says this is the first step in a foreclosure process. If you are served with a foreclosure
summons let us know right away.” Another e-mail from an employee of Barash on December 21,
2015, contained the subject line “Bankruptcy” and informed Daily that Payment Relief wanted to
negotiate a settlement regarding Daily’s second mortgage. Thereafter, in a letter dated February
2, 2016, Barash confirmed that it was not representing Daily in relation to the collection efforts
by the second mortgage holder and urged Daily to contact another lawyer if he wished to discuss
his rights in the matter. As noted above, the complaint to foreclose the second mortgage was
filed on November 21, 2016.
¶7 The trial court granted the third-party defendants’ motion to dismiss with prejudice,
finding that the claim against the third-party defendants was barred by both the statute of
limitations and the statute of repose (id.). The trial court found that, pursuant to Illinois Supreme
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Court Rule 304(a) (eff. Mar. 8, 2016), there was no just reason for delaying enforcement or
appeal and Daily appealed.
¶8 ANALYSIS
¶9 Daily argues that when a complaint for legal malpractice is brought in an indemnity
action, the limitations period for commencing the action is governed by the limitations period
contained in section 13-204 of the Code (735 ILCS 5/13-204 (West 2016)), rather than section
13-214.3(c) of the Code (id. § 13-214.3(c)). The third-party defendants allege that section 13-
214.3 of the Code is the more specific statute to legal malpractice claims and should be applied
over the more general contribution statute. We review de novo a dismissal under section 2-619 of
the Code. Van Meter v. Darien Park District, 207 Ill. 2d 359, 368 (2003).
¶ 10 The primary objective of the court in construing the meaning of a statute is to ascertain
and give effect to the intent of the legislature. Southern Illinoisan v. Illinois Department of
Public Health, 218 Ill. 2d 390, 415 (2006). The plain language of the statute is usually the most
reliable indication of legislative intent. Id. Section 214.3(b) of the Code states:
“An action for damages based on tort, contract, or otherwise (i) against an attorney
arising out of an act or omission in the performance of professional services or (ii)
against a non-attorney employee arising out of an act or omission in the course of his or
her employment by an attorney to assist the attorney in performing professional services
must be commenced within 2 years from the time the person bringing the action knew or
reasonably should have known of the injury for which damages are sought.” 735 ILCS
5/13-214.3(b) (West 2016).
¶ 11 The Illinois Supreme Court has stated that section 13-214.3 of the Code unambiguously
applies to all claims brought against an attorney arising out of actions or omissions in the
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performance of professional services. Evanston Insurance Co. v. Riseborough, 2014 IL 114271,
¶ 23 (“The ‘arising out of’ language indicates an intent by the legislature that the statute apply to
all claims against attorneys concerning their provision of professional services.”); see also
Landreth v. Raymond P. Fabricius, P.C., 2018 IL App (3d) 150760, ¶ 31 (section 214.3 of the
Code is not applicable to claims that do not arise out of provision of legal services but rather
seeks to hold partner liable derivatively based upon his status as a partner). Pursuant to the
express language of section 214.3 of the Code, it is the nature of the act or omission, rather than
the identity of the plaintiff, that determines whether the statute applies to a claim brought against
an attorney. Riseborough, 2014 IL 114271, ¶ 19.
¶ 12 In this case, the claims against the third-party defendants, while stated as an implied
indemnity action, are all claims against attorneys arising out of actions or omissions in the
performance of professional services. Thus, section 13-214.3 of the Code governs the action,
rather than the general contribution and indemnity statute, section 13-204 of the Code.
¶ 13 The two-year statute of limitations contained in section 13-214.3(b) (735 ILCS 5/13-
214.3(b) (West 2016)) begins to run after a cause of action has accrued, while the statute of
repose contained in section 13-214.3(c) of the Code begins to run as soon as an event creating
the malpractice occurs, regardless of whether any injury has yet resulted so as to cause an action
to accrue. Mauer v. Rubin, 401 Ill. App. 3d 630, 639 (2010); 735 ILCS 5/13-214.3(c) (West
2016). A statute of repose begins to run when a specific event occurs, regardless of whether an
action has accrued and extinguishes liability after a fixed period of time. Snyder v. Heidelberger,
2011 IL 111052, ¶ 10. “The period of repose in a legal malpractice case begins to run on the last
date on which the attorney performs the work involved in the alleged negligence.” Id. ¶ 18.
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¶ 14 The third-party defendants argue that Block’s work occurred in 2006, so the statute of
repose expired in 2012. Daily’s complaint alleges that he retained Block to pursue bankruptcy
relief in 2006. Daily alleges that he was advised that the second mortgage at issue here would be
discharged in the bankruptcy proceedings. Based on the allegations in the complaint, the trial
court was correct to dismiss Daily’s third-party complaint. However, a dismissal with prejudice,
with no opportunity to amend, was in error. The briefs filed in opposition to the motion to
dismiss in the trial court indicate that the third party defendants filed a motion to amend Daily’s
bankruptcy plan on June 23, 2011, which was denied on July 26, 2011. The third party
defendants also continued e-mailing Daily regarding the case through late 2015, finally
informing Daily that it did not represent him in relation to the collection efforts by the second
mortgage holder on February 2, 2016. It is arguable that the malpractice continued until 2016
and compounded the damage done by the admitted malpractice in the bankruptcy proceedings, so
Daily should be allowed to amend his complaint. But see Rubin, 401 Ill. App. 3d at 645 (activity
on the part of the attorneys after defective agreement was entered did not compound the damage
caused by the final judgment).
¶ 15 Daily argues that he also has a meritorious equitable estoppel claim against the third-
party defendants. Daily contends that the continued e-mails with the third-party defendants lulled
him into a sense of security and he relied on their indications that they would protect and defend
him.
¶ 16 A party claiming estoppel must demonstrate that (1) the other person misrepresented or
concealed material facts; (2) the other person knew at the time he or she made the representations
that they were untrue; (3) the party claiming estoppel did not know that the representations were
untrue when they were made and when that party decided to act, or not, upon the representations;
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(4) the other person intended or reasonably expected that the party claiming estoppel would
determine whether to act, or not, based upon the representations; (5) the party claiming estoppel
reasonably relied upon the representations in good faith to his or her detriment; and (6) the party
claiming estoppel would be prejudiced by his or her reliance on the representations if the other
person is permitted to deny the truth thereof. DeLuna v. Burciaga, 223 Ill. 2d 49, 82-83 (2006).
¶ 17 The Illinois Supreme Court applied equitable estoppel in the context of a statute of
limitations in Jackson Jordan, Inc. v. Leydig, Voit & Mayer, 158 Ill. 2d 240, 252 (1994), and
found that the attorneys’ constant reassurance of the client’s legal status lulled him into a false
sense of security. Thus, Daily should be allowed to amend his complaint to include the estoppel
allegations.
¶ 18 CONCLUSION
¶ 19 The judgment of the circuit court of Bureau County is affirmed in part in that the
dismissal of the third-party complaint is upheld but the fact that the dismissal was with prejudice
is reversed and the matter is remanded to allow the third-party plaintiff to file an amended third-
party complaint.
¶ 20 Affirmed in part and reversed in part.
¶ 21 Cause remanded.
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