Evanston Insurance Company v. Riseborough , 2014 IL 114271 ( 2014 )

2014 IL 114271
IN THE
SUPREME COURT
OF
THE STATE OF ILLINOIS
(Docket No. 114271)
EVANSTON INSURANCE COMPANY, Appellee, v. GEORGE E.
RISEBOROUGH et al., Appellants.
Opinion filed February 21, 2014.
JUSTICE BURKE delivered the judgment of the court, with opinion.
Chief Justice Garman and Justices Freeman, Thomas, and Karmeier concurred in
the judgment and opinion.
Justice Kilbride dissented, with opinion, joined by Justice Theis.
OPINION
¶1 At issue in this appeal is whether section 13-214.3 of the Code of Civil Procedure
(Code) (735 ILCS 5/13-214.3 (West 2008)), which sets forth a six-year statute of
repose for “action[s] for damages based on tort, contract, or otherwise *** against an
attorney arising out of an act or omission in the performance of professional services,”
applies to plaintiff’s second amended complaint for breach of implied warranty of
authority, fraudulent misrepresentation, and negligent misrepresentation. The circuit
court of Cook County found that the statute of repose barred plaintiff’s claims against
the defendant attorneys and dismissed the complaint. The appellate court reversed and
remanded for further proceedings, finding that the statute of repose did not apply to an
action brought by a nonclient of the defendant for a cause of action other than legal
malpractice. 2011 IL App (1st) 102660-U, ¶ 28. We reverse the appellate court’s
judgment and affirm the circuit court’s dismissal of plaintiff’s complaint.
¶2 Background
¶3 In 1996, Kiferbaum Construction Corporation (Kiferbaum) was the general
contractor for the construction of a warehouse. Two employees of a subcontractor on
the project were injured at the construction site, resulting in a personal injury action
filed against Kiferbaum by one of the injured workers. Kiferbaum was represented in
the personal injury lawsuit by the law firm of Jacobson & Riseborough.
¶4 At the time of the accident, Kiferbaum was the named insured under primary and
excess liability policies issued by Statewide Insurance Company (Statewide).
Kiferbaum was listed as an additional insured on each of its subcontractors’ insurance
policies, including a $1 million excess liability policy issued by Evanston Insurance
Company (Evanston), and policies issued by Steadfast Insurance Company (Steadfast)
and Transportation Insurance Company (Transportation).
¶5 In 1997, Statewide filed a declaratory judgment action in the circuit court seeking a
declaration that it owed no coverage under its policies. That action was pending when,
in 2000, the parties reached a settlement in the personal injury case in the amount of
$4,887,500. On October 23, 2000, Evanston, Steadfast, and CNA Insurance Company
(as owner of Transportation) entered into an agreement, referred to by the parties as the
“Fund and Fight Agreement,” in which they agreed to contribute their respective policy
limits to fund the settlement. In accord with the agreement, Evanston contributed $1
million, Steadfast contributed $1 million, and CNA funded the remainder of the
settlement. Statewide signed the Fund and Fight Agreement but did not contribute any
funds. The agreement provided, in part, that the insurers reserved the right to litigate
policy and coverage defenses among themselves. Statewide and Kiferbaum also agreed
to reimburse the contributing insurers “if defenses to coverage on behalf of any or all of
these insurers are judicially found to be valid and/or that the position taken by
Kiferbaum and/or Statewide, as set forth above, is invalid.” George Riseborough, an
attorney from Jacobson & Riseborough, signed the agreement as the “duly authorized
agent and representative of Kiferbaum.”
¶6 Pursuant to the Fund and Fight Agreement, Evanston intervened in Statewide’s
declaratory judgment action and filed a separate complaint against Statewide and
Kiferbaum with respect to coverage issues. 1 These actions were consolidated
(hereinafter referred to as the “coverage action”). Evanston alleged that Kiferbaum
1
Steadfast and Transportation (CNA) settled their claims and were dismissed from the litigation.
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should have exhausted its coverage under its primary policy issued by Statewide before
turning to excess insurance carriers. Evanston alleged further that, under the terms of
the Fund and Fight Agreement, Kiferbaum was required to reimburse Evanston for the
$1 million it contributed to the personal injury settlement. Kiferbaum asserted as a
defense to Evanston’s claims that it was not bound by the Fund and Fight Agreement.
In support of that defense, on December 22, 2003, Kiferbaum’s president, Jacob
Kiferbaum, filed an affidavit stating that he had no knowledge of the agreement at the
time of its creation, and that George Riseborough lacked authorization to sign the
agreement on Kiferbaum’s behalf.
¶7 Evanston reached an agreement with Statewide to settle the coverage action,
whereby Statewide agreed to pay Evanston $612,500 in exchange for Evanston’s
release of Statewide and Kiferbaum. On December 23, 2003, the circuit court entered
an agreed order of dismissal pursuant to settlement. Statewide later went into
liquidation, however, and the settlement check was not honored. Evanston filed a
petition to vacate the agreed order of dismissal pursuant to section 2-1401 of the Code
of Civil Procedure (735 ILCS 5/2-1401 (West 2008)), which the circuit court granted.
Evanston continued to pursue its claims against Kiferbaum, and the parties engaged in
discovery and motion practice. On April 29, 2009, the circuit court granted
Kiferbaum’s motion for summary judgment, in part, finding that Kiferbaum did not
give authority to Riseborough to sign the Fund and Fight Agreement on its behalf. On
December 2, 2009, following a bench trial on the remaining issue of Kiferbaum’s
ratification of the Fund and Fight Agreement, the circuit court entered judgment in
favor of Kiferbaum and against Evanston. Evanston did not appeal the judgment in the
coverage action.
¶8 While the insurance coverage proceedings were still pending, on December 22,
2005, Evanston filed a complaint in Cook County Circuit Court against defendants
Jacobson & Riseborough, and individual attorneys George E. Riseborough and Reid
Jacobson. Evanston alleged breach of implied warranty of authority, fraudulent
misrepresentation, and negligent misrepresentation, based on defendants’ execution of
the Fund and Fight Agreement on Kiferbaum’s behalf without Kiferbaum’s express
authority. Evanston alleged that defendants’ actions caused Evanston to lose the
anticipated benefits of the agreement and sustain damages. Evanston later filed an
amended complaint setting forth substantially the same allegations. The relief sought
by Evanston included the $1,000,000 which Evanston had contributed to the personal
injury settlement, as well as attorney fees and costs incurred in its efforts to obtain
relief from Kiferbaum. The circuit court dismissed both complaints without prejudice
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pursuant to section 2-615 of the Code (735 ILCS 5/2-615 (West 2008)). The court
found that Evanston’s claims were premature because, at the time of filing the
complaints, Evanston had not established its entitlement to collect reimbursement from
Kiferbaum under the terms of the Fund and Fight Agreement.
¶9 On December 23, 2009, after the final judgment order had been entered in the
coverage action, Evanston filed its second amended complaint reasserting its claims
against the Riseborough defendants. Defendants filed a motion to dismiss pursuant to
section 2-619 of the Code (735 ILCS 5/2-619 (West 2008)). The circuit court of Cook
County granted the motion to dismiss, finding the six-year statute of repose in section
13-214.3(c) (735 ILCS 5/13-214.3(6) (West 2008)) barred Evanston’s claims.
Evanston’s motion to reconsider and to vacate the order of dismissal was denied. The
appellate court reversed and remanded for further proceedings. 2011 IL App (1st)
102660-U. We allowed defendants’ petition for leave to appeal. Ill. S. Ct. R. 315 (eff.
Feb. 26, 2010).
¶ 10 Analysis
¶ 11 On appeal to this court, defendants argue that the appellate court failed to apply the
plain language of section 13-214.3 and, instead, improperly limited the application of
the statute solely to claims brought by a client against an attorney for legal malpractice.
Evanston, however, asks that we affirm the appellate court and find that section
13-214.3 is inapplicable to claims by non-clients of the defendant. In the alternative,
Evanston argues that, even if the statute of repose applies to its second amended
complaint, its claims are not barred because (1) its original complaint was filed before
the repose period and remained “pending on the docket” of the circuit court; (2) the
second amended complaint related back to the original timely filed complaint; and (3)
the trial court erred in dismissing the original and first amended complaints as
premature.
¶ 12 I. Statute of Repose
¶ 13 Evanston’s second amended complaint was dismissed pursuant to section 2-619 of
the Code (735 ILCS 5/2-619 (West 2008)). A motion to dismiss under section 2-619
“admits the legal sufficiency of the plaintiffs’ complaint, but asserts an affirmative
defense or other matter that avoids or defeats the plaintiffs’ claim.” DeLuna v.
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Burciaga, 223 Ill. 2d 49, 59 (2006). The circuit court’s dismissal of a complaint
pursuant to section 2-619 is reviewed de novo. Id. Both the interpretation of a statute
and the applicability of a statute of repose to a cause of action are questions of law
subject to de novo review. Uldrych v. VHS of Illinois, Inc., 239 Ill. 2d 532, 540 (2011);
Krautsack v. Anderson, 223 Ill. 2d 541, 553 (2006).
¶ 14 The statute of repose at issue is contained in section 13-214.3 of the Code, which is
titled “Attorneys.” Section 13-214.3 provides, in part:
“(b) 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 *** 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.
(c) An action described in subsection (b) may not be commenced in any
event more than 6 years after the date on which the act or omission occurred.”
735 ILCS 5/13-214.3(b), (c) (West 2008).
¶ 15 This court’s primary goal in construing a statute is to ascertain and give effect to the
intent of the legislature. DeLuna, 223 Ill. 2d at 59. The most reliable indication of the
legislative intent is the plain language of the statute itself. Id. The statutory language
must be given its plain and ordinary meaning. Michigan Avenue National Bank v.
County of Cook, 191 Ill. 2d 493, 504 (2000). “[W]here an enactment is clear and
unambiguous a court is not at liberty to depart from the plain language and meaning of
the statute by reading into it exceptions, limitations or conditions that the legislature
did not express.” Kraft, Inc. v. Edgar, 138 Ill. 2d 178, 189 (1990).
¶ 16 In contrast to a statute of limitations, which determines the time within which a
lawsuit may be commenced after a cause of action has accrued, a statute of repose
extinguishes the action after a defined period of time, regardless of when the action
accrued. DeLuna, 223 Ill. 2d at 61 (citing Ferguson v. McKenzie, 202 Ill. 2d 304, 311
(2001)). A statute of repose is not tolled by the discovery rule. Mega v. Holy Cross
Hospital, 111 Ill. 2d 416, 422-23 (1986). After the expiration of the repose period,
“[t]he injured party no longer has a recognized right of action.” Goodman v. Harbor
Market, Ltd., 278 Ill. App. 3d 684, 691 (1995) (citing Rosenberg v. Town of North
Bergen, 293 A.2d 662, 667 (N.J. 1972)). A plaintiff’s right to bring an action is
terminated when the event giving rise to the cause of action does not transpire within
the period of time specified in the statute of repose. Id.
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¶ 17 Under section 13-214.3, an action for damages based on tort, contract, or otherwise
against an attorney “arising out of an act or omission in the performance of professional
services *** may not be commenced *** more than 6 years after the date on which the
act or omission occurred.” 735 ILCS 5/13-214.3(b), (c) (West 2008). There is no
dispute that the act or omission which formed the basis for Evanston’s second amended
complaint was defendants’ execution of the Fund and Fight Agreement, allegedly on
Kiferbaum’s behalf, on October 23, 2000. Evanston filed its second amended
complaint on December 23, 2009. Thus, if the repose provision in section 13-214.3
applies to the complaint, it was properly dismissed as having been filed more than three
years after the expiration of the six-year repose period.
¶ 18 The appellate court below determined that Evanston’s claims did not arise out of
professional services performed by defendants because those professional services
were not performed on behalf of Evanston as defendants’ client. 2011 IL App (1st)
102660-U, ¶ 28. The court first rejected Evanston’s contention that the complaint set
forth a claim for legal malpractice, finding that the causes of action for breach of
implied warranty of authority, fraudulent misrepresentation, and negligent
misrepresentation were distinct from legal malpractice. Id. ¶¶ 25-26. The court then
held:
“In the case at bar, following [Bova v. U.S. Bank, N.A., 446 F. Supp. 2d 926
(S.D. Ill. 2006)] and [Ganci v. Blauvelt, 294 Ill. App. 3d 508 (1998)], we find
that section 13-214.3(b) contemplates an attorney-client relationship.
Defendants, as legal counsel for [Kiferbaum], did not provide legal
representation to Evanston. In the absence of an attorney-client relationship,
there is no duty owed to plaintiff by the defendant attorneys. Kopka v.
K[a]mensky & Rubenstein, 354 Ill. App. 3d 930, 934-35 (2004). As such, a
plaintiff cannot bring suit against an attorney in the ‘performance of their
professional services’ unless there was a [sic] attorney-client relationship in
which the defendants owed a duty to the complaining party. We hold that
section 13-214.3(b) is unambiguous. We conclude that ‘professional services’
contemplates an action where a client brings suit against his or her attorney
arising out of an attorney-client relationship.” Id. ¶ 28.
¶ 19 The appellate court’s conclusion that section 13-214.3 applies only to a claim
asserted by a client of the attorney is contrary to the plain language expressed in the
statute. There is nothing in section 13-214.3 that requires the plaintiff to be a client of
the attorney who rendered the professional services. The statute does not refer to a
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“client” nor does it place any restrictions on who may bring an action against an
attorney. The statute simply provides that an action for damages against an attorney
“arising out of an act or omission in the performance of professional services” is
subject to the six-year repose period. Thus, under the express language of the statute, it
is the nature of the act or omission, rather than the identity of the plaintiff, that
determines whether the statute of repose applies to a claim brought against an attorney.
¶ 20 As justification for reading into the statute an additional requirement that the
plaintiff and defendant must have an attorney-client relationship, the appellate court
cited the general rule in Illinois that an attorney owes a duty of care only to his or her
client and not to third parties. Id. ¶ 28 (citing Kopka v. Kamensky & Rubenstein, 354 Ill.
App. 3d 930, 934-35 (2004)). The general rule that attorneys do not owe professional
duties to non-clients also was the basis for the court’s decision in Ganci v. Blauvelt, 294
Ill. App. 3d 508, 515 (1998). The Ganci court held that the two-year statute of
limitations in section 13-214.3(b) did not apply to a third-party contribution action
against an attorney where the plaintiff failed to allege that the defendant owed a
professional duty to him, and the action was not for legal malpractice. Id. The court
held that an action “arising out of an act or omission in the performance of professional
services” necessarily implied that the defendant attorney owed a professional duty to
the plaintiff. Where no professional duty was owed because the defendant had not
performed professional services for the plaintiff, the statute of limitations did not bar an
action filed by a non-client. Id.
¶ 21 Several federal district court opinions have followed Ganci in concluding that the
statute of limitations in section 13-214.3(b) applies solely to claims of legal
malpractice brought by a client of the attorney. See Wilbourn v. Advantage Financial
Partners, LLC, No. 09-CV-2068, 2010 WL 1194950, at *10 (N.D. Ill. Mar. 22, 2010)
(section 13-214.3(b) did not bar fraud claim where the defendant never served as the
plaintiff’s attorney and owed no fiduciary duty to the plaintiff); Bova v. U.S. Bank,
N.A., 446 F. Supp. 2d 926, 934 (S.D. Ill. 2006) (section 13-214.3(b) did not bar fraud
claim brought against the defendant law firm where the firm did not render legal
services to the plaintiffs and the claim was not for legal malpractice); Cotton v. Private
Bank & Trust Co., No. 01 C 1099, 2004 WL 526739, at *3-4 (N.D. Ill. Mar. 12, 2004)
(section 13-214.3(b) did not bar tortious interference, inducement, and conversion
claims brought by a non-client against a law firm where the firm owed no fiduciary
duty to the plaintiff and, thus, was not engaged in providing “professional services” to
the plaintiff).
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¶ 22 Another panel of the appellate court declined to follow Ganci and held, instead, that
the statute of limitations in section 13-214.3(b) applied to a third-party complaint
brought by the plaintiff against an attorney who represented the plaintiff’s lessor. 800
South Wells Commercial, LLC v. Horwood Marcus & Berk Chartered, 2013 IL App
(1st) 123660. The court held, “[a]s there is no language in the statute restricting its
application to legal malpractice claims or claims brought by an attorney’s client, the
plain language of the statute directs that the two-year limitation applies to all claims
against an attorney arising out of acts or omissions in the performance of professional
services, and not just legal malpractice claims or claims brought against an attorney by
a client.” Id. ¶ 13.
¶ 23 We reject the interpretation advanced by the appellate court in Ganci and in the
case at bar that section 13-214.3(c) applies solely to claims brought by a client against
an attorney who owes professional or fiduciary duties to the plaintiff. This narrow
reading overlooks the language in the statute that the repose period applies to claims
“arising out of an act or omission in the performance of professional services.”
(Emphasis added.) 735 ILCS 5/13-214.3(b), (c) (West 2008). 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. There is no express
limitation that the professional services must have been rendered to the plaintiff. Nor
does the statute state or imply that it is restricted to claims for legal malpractice. Had
the legislature wished to do so, it could have limited the statute to legal malpractice
actions or to actions brought by a client of the attorney. Instead, the statute broadly
applies to “action[s] for damages based on tort, contract, or otherwise *** arising out
of an act or omission in the performance of professional services,” which encompasses
a number of potential causes of action in addition to legal malpractice. (Emphasis
added.) 735 ILCS 5/13-214.3(b) (West 2008). A court may not read into a statute any
limitations or conditions which are not expressed in the plain language of the statute.
Petersen v. Wallach, 198 Ill. 2d 439, 446 (2002) (citing Kraft, Inc. v. Edgar, 138 Ill. 2d
178, 189 (1990)). “It is the dominion of the legislature to enact laws and it is the
province of the courts to construe those laws. We can neither restrict nor enlarge the
meaning of an unambiguous statute.” Id. at 448. The statute unambiguously applies to
all claims brought against an attorney arising out of actions or omissions in the
performance of professional services. To the extent that Ganci holds that section
13-214.3 is applicable only to actions brought by clients for legal malpractice, that case
is overruled.
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¶ 24 Our broad reading of section 13-214.3 is consistent with interpretations by Illinois
courts of other, similarly-worded limitations and repose statutes. Statutes relating to the
same subject are governed by one spirit and a single policy, and we must presume that
the legislature intended these statutes to be consistent and harmonious. Uldrych v. VHS
of Illinois, Inc., 239 Ill. 2d 532, 540 (2011). See Hayes v. Mercy Hospital & Medical
Center, 136 Ill. 2d 450 (1990) (statute of repose for actions against physicians and
hospitals arising out of patient care (Ill. Rev. Stat. 1987, ch. 110, ¶ 13-212(a)) applied
to third-party contribution claim); Polsky v. BDO Seidman, 293 Ill. App. 3d 414, 424
(1997) (statute of limitations for actions against public accountants (735 ILCS
5/13-214.2(a) (West 1996)) was not limited to professional malpractice actions but
applied to claims of fraud and tortious interference by former employee suing
accounting firm); Donnybrook Investments Ltd. v. Arthur Anderson LLP, No. 05 C
4883, 2006 WL 1049588, at *3 (N.D. Ill. Apr. 20, 2006) (statute of repose for actions
against public accountants (735 ILCS 5/13-214.2(b) (West 2004)) applied to the
plaintiffs’ third-party action against the auditor of a failed bank, even though the
auditor had not provided accounting services to the plaintiffs); Citgo Petroleum Corp.
v. McDermott International, Inc., 368 Ill. App. 3d 603, 607 (2006) (statute of repose for
actions against persons in the design, planning, supervision, observation, or
management of construction (735 ILCS 5/13-214(b) (West 2002)) applied to
third-party complaint brought by the defendant manufacturer against former owner of
refinery for negligent installation, inspection, maintenance, and operation of the
facility).
¶ 25 In Hayes, the issue was whether the four-year statute of repose in section 13-212(a)
of the Code (Ill. Rev. Stat. 1987, ch. 110, ¶ 13-212(a)) applied to third-party
contribution actions brought against a doctor by the defendants in an underlying
negligence action. Section 13-212(a) provided that an action for damages for injury or
death against a physician, “whether based upon tort, or breach of contract, or otherwise,
arising out of patient care” shall be brought no more than four years after the date of the
act or omission alleged to have caused the injury or death. Hayes, 136 Ill. 2d at 453.
This court held that the application of the repose period in section 13-212 was not
limited to a direct action by the injured party. Id. at 456-57. We concluded that a
third-party contribution action constitutes an “action for damages” within the language
of the statute even though a contribution action need not be predicated on the same
theory of recovery as that asserted by the plaintiff in the underlying action. Id. at 457.
Key to the Hayes decision was the legislative purpose underlying the statute of repose,
which was to provide a definite period in which an action arising out of patient care
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could be filed, thus preventing extended exposure of physicians and their insurers to
potential liability for the care and treatment of patients. Id. at 458. We explained that a
suit for contribution for damages arising out of patient care exposes a physician and his
or her insurer to the same liability as if the patient were to have brought a direct action
against the physician for medical malpractice. Id. at 458-59. The all-inclusive term “or
otherwise” in the statute “demonstrate[d] the General Assembly’s desire at the time it
originally enacted the statute to limit a physician’s exposure to liability for damages for
injury or death arising out of patient care under all theories of liability, whether then
existing or not.” (Emphasis added.) Id. Accordingly, the plaintiffs’ third-party claims
for contribution were subject to the repose provision for actions asserting injuries
arising out of patient care. Id. at 456-57.
¶ 26 Although the third-party complaints in Hayes were not medical malpractice actions
brought directly against a physician by a patient to whom the medical services were
rendered, this court interpreted the repose statute broadly in order to effectuate the
legislative intent to limit all actions against physicians arising out of patient care.
Similar to the third-party complaints in Hayes, Evanston has not brought suit against
defendants for professional legal services rendered to Evanston, but rather for damages
arising out of professional services rendered by defendants to Kiferbaum. In its second
amended complaint, Evanston alleged that defendants were attorneys licensed in the
State of Illinois who represented Kiferbaum as defense counsel in the underlying
personal injury case, that they participated in settlement negotiations on behalf of
Kiferbaum, and that on October 23, 2000, they signed and initialed changes to the Fund
and Fight Agreement on behalf of Kiferbaum. The complaint alleged damages to
Evanston based on defendant’s actions in executing the agreement in the absence of
Kiferbaum’s authorization. Thus, under the plain, unambiguous language of the statute,
Evanston’s claims in its second amended complaint “arose out of” defendants’ actions
“in the performance of professional services” on behalf of Kiferbaum, defendants’
client. We hold that the statute of repose in section 13-214.3(c) applies to Evanston’s
second amended complaint, which was properly dismissed as time-barred pursuant to
the statute.
¶ 27 II. Evanston’s Alternative Arguments
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¶ 28 Evanston contends that, even if the statute of repose in section 13-214.3(c) applies
to its second amended complaint, its lawsuit was timely filed, or, alternatively, that the
second amended complaint related back to the original, timely filed complaint.
Evanston also argues that the circuit court erred in dismissing its original and first
amended complaints as premature because its cause of action accrued prior to the date
of filing the original complaint.
¶ 29 A. Original Complaint Remained Pending on the Circuit Court’s Docket
¶ 30 Evanston argues that its lawsuit was timely filed prior to the expiration of the
six-year repose period and should not have been dismissed. The original complaint
against defendants was filed on December 22, 2005, less than six years after the act
upon which the complaint was based. Evanston contends that, since its original
complaint was dismissed by the circuit court without prejudice and with leave to
re-plead, the statute of repose did not extinguish its action because it remained pending
on the docket of the circuit court until such time as the claims alleged in the complaint
accrued. We disagree. Evanston’s argument that a plaintiff may avoid an applicable
statute of repose by filing a premature complaint alleging claims which have not fully
accrued has no support in the law.
¶ 31 Evanston’s initial complaint was dismissed by the circuit court pursuant to section
2-615 of the Code (735 ILCS 5/2-615 (West 2008)) because it failed to set forth a cause
of action upon which relief may be granted. See Wakulich v. Mraz, 203 Ill. 2d 223, 228
(2003). Because the circuit court concluded that the complaint did not state a legally
sufficient claim, the complaint was dismissed without prejudice to later refile. The
dismissal without prejudice did not mean, however that Evanston preserved its claims,
safe from the statute of repose, until such time as Evanston was able to state a legally
sufficient cause of action. “Unlike a statute of limitations, which begins running upon
accrual of a cause of action, a statute of repose begins running when a specific event
occurs, regardless of whether an action has accrued or whether any injury has resulted.”
Ferguson v. McKenzie, 202 Ill. 2d 304, 311 (2001) (citing 54 C.J.S. Limitations of
Actions § 4, at 20-21 (1987)). A statute of repose extinguishes an action after a fixed
period of time, regardless of when the action accrued. DeLuna v. Burciaga, 223 Ill. 2d
49, 61 (2006); Ferguson, 202 Ill. 2d at 311. The purpose of a period of repose is to
terminate the possibility of liability after a defined period of time. Mega v. Holy Cross
Hospital, 111 Ill. 2d 416, 422 (1986). The statute of repose began running in this case
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on October 23, 2000, the date of the act or omission alleged in the complaint. Because
the circuit court concluded that Evanston failed to file a complaint stating a legally
cognizable cause of action prior to the end of the six-year repose period, Evanston’s
claims were extinguished by the statute of repose.
¶ 32 The cases relied on by Evanston are distinguishable. In Estate of Bass v. Katten,
375 Ill. App. 3d 62, 65-66 (2007), an action filed by the plaintiffs against their attorneys
for legal malpractice, breach of fiduciary duties, and intentional misconduct was
dismissed without prejudice by the circuit court because the plaintiffs had not yet
suffered an adverse judgment in the underlying litigation. At the request of the
plaintiffs, the circuit court stayed the proceedings until the underlying litigation was
resolved. The appellate court affirmed the imposition of the stay. Id. at 71. In this case,
Evanston never requested a stay of the proceedings, nor was a stay entered by the
circuit court.
¶ 33 Lucey v. Law Offices of Pretzel & Stouffer, Chartered, 301 Ill. App. 3d 349, 359-61
(1998), is inapposite because the appellate court held that the circuit court abused its
discretion in dismissing the plaintiff’s premature complaint for legal malpractice with
prejudice, but the court acknowledged that the plaintiff may become subject to the
statute of repose in section 13-214.3 upon later refiling. The same is true for Smith v.
Central Illinois Regional Airport, 207 Ill. 2d 578, 587-88 (2003), and J. Eck & Son,
Inc. v. Reuben H. Donnelley Corp., 188 Ill. App. 3d 1090, 1093 (1989). These cases
simply held that a dismissal without prejudice is not a final order for purposes of
appellate review. None of the cases cited by Evanston supports its argument that a
dismissal of a premature complaint without prejudice allows a plaintiff to circumvent a
statute of repose when an amended complaint is filed after the repose period has
expired.
¶ 34 B. Relation Back
¶ 35 Evanston next contends that its second amended complaint related back to its
original timely-filed complaint. Under the relation back doctrine, a cause of action set
forth in an amended pleading will not be time-barred and will “relate back” to the date
of the filing of the original pleading if: (1) the original pleading was timely filed, and
(2) the cause of action asserted in the amended pleading grew out of the same
transaction or occurrence as that asserted in the original pleading. 735 ILCS 5/2-616(b)
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(West 2008); Zeh v. Wheeler, 111 Ill. 2d 266, 270-71 (1986); Avakian v. Chulengarian,
328 Ill. App. 3d 147, 153 (2002).
¶ 36 After a careful review of the record in this case, we find that Evanston’s argument
with respect to the relation back doctrine was argued for the first time in its motion for
reconsideration of the circuit court’s dismissal of the second amended complaint.
Evanston failed to raise the argument in its response to defendants’ motion to dismiss;
thus, it has forfeited the argument. The purpose of a motion to reconsider is to bring to
the court’s attention newly discovered evidence that was not available at the time of the
original hearing, changes in existing law, or errors in the court’s application of the law.
Caywood v. Gossett, 382 Ill. App. 3d 124, 133 (2008). Arguments raised for the first
time in a motion for reconsideration in the circuit court are forfeited on appeal. Id. at
134; Illinois Health Maintenance Organization Guaranty Ass’n v. Shapo, 357 Ill. App.
3d 122, 137 (2005); Holzer v. Motorola Lighting, Inc., 295 Ill. App. 3d 963, 978 (1998)
(a party may not raise a legal theory for the first time in a motion to reconsider).
¶ 37 C. Circuit Court’s Dismissal of Prior Complaints as Premature
¶ 38 Evanston argues that the circuit court erred in dismissing its original and first
amended complaints as premature. It asserts that, for purposes of a breach of implied
warranty of authority, a plaintiff is injured at the time that the plaintiff learns that the
agent lacked authority, or when the plaintiff suffers damages or fails to gain the
anticipated benefits, whichever occurs first. See Joe & Dan International Corp. v.
United States Fidelity & Guaranty Co., 178 Ill. App. 3d 741, 746 (1988); Restatement
(Second) of Agency § 329 cmt. k (1958). Accordingly, Evanston argues that it was
injured, and its cause of action accrued, on December 22, 2003, when Kiferbaum
asserted in an affidavit filed in the coverage action that defendants did not have
authorization to execute the Fund and Fight Agreement on Kiferbaum’s behalf. In the
alternative, Evanston argues that its claims fully accrued prior to its original complaint
because its cause of action for breach of implied warranty of authority is akin to a
breach of contract action, which accrued at the time of the breach and is subject to the
discovery rule.
¶ 39 Evanston’s assertion that it was injured, and its claims accrued, prior to filing the
original complaint, also was raised for the first time in Evanston’s motion for
reconsideration of the dismissal of the second amended complaint. In fact, the circuit
court found the argument “waived” in its order denying the motion for reconsideration.
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Evanston’s arguments regarding prematurity were fully available but were not raised at
the time the dismissal orders were entered on its original and first amended complaints.
Accordingly, these contentions have been forfeited, and we decline to consider them on
review. See Continental Casualty Co. v. Security Insurance Co. of Hartford, 279 Ill.
App. 3d 815, 821 (1996).
¶ 40 Conclusion
¶ 41 For the foregoing reasons, we reverse the judgment of the appellate court and
affirm the judgment of the circuit court dismissing plaintiff’s second amended
complaint with prejudice.
¶ 42 Appellate court judgment reversed.
¶ 43 Circuit court judgment affirmed.
¶ 44 JUSTICE KILBRIDE, dissenting:
¶ 45 I respectfully dissent from the majority opinion because I disagree with the
majority’s statutory analysis. I believe the majority erroneously concludes that section
13-214.3 of the Code of Civil Procedure (Code) (735 ILCS 5/13-214.3 (West 2008)), is
not restricted to legal malpractice claims or to actions brought by a client of the
attorney. Supra & 23.
¶ 46 I agree with the appellate court’s reasoning that section 13-214.3 “contemplates an
action where a client brings suit against his or her attorney arising out of an
attorney-client relationship” and is not applicable to bar a suit brought by a nonclient
against an attorney in a case that does not allege legal malpractice. 2011 IL App (1st)
102660-U, & 28. Accordingly, I would affirm the judgment of the appellate court.
¶ 47 Before this court, defendants submit that the appellate court failed to apply the
plain language of section 13-214.3 and, instead, improperly limited the application of
section 13-214.3 only to those situations where a claim for legal malpractice is asserted
against the attorney by a client. Evanston contends that the appellate court properly
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construed the plain language of section 13-214.3 in finding that it is inapplicable to
claims by nonclients that do not involve legal malpractice.
¶ 48 This case involves a motion to dismiss pursuant to section 2-619 of the Code (735
ILCS 5/2-619 (West 2008)). A motion to dismiss under section 2-619 “admits the
legal sufficiency of the plaintiff=s claim, but asserts certain defects or defenses outside
the pleading that defeat the claim.” Solaia Technology, LLC v. Specialty Publishing
Co., 221 Ill. 2d 558, 579 (2006). The circuit court=s dismissal of a complaint pursuant
to section 2-619 is reviewed de novo. Solaia Technology, 221 Ill. 2d at 579. Likewise,
the interpretation and construction of a statute is subject to de novo review. Krautsack
v. Anderson, 223 Ill. 2d 541, 553 (2006).
¶ 49 Section 13-214.3 of the Code provides, in relevant part:
“(b) 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 *** 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.
(c) An action described in subsection (b) may not be commenced in any
event more than 6 years after the date on which the act or omission occurred.”
(Emphasis added.) 735 ILCS 5/13-214.3(b), (c) (West 2008).
¶ 50 Although this court is asked to address the applicability of subsection (c), I
believe our analysis must necessarily focus on the meaning of the language in
subsection (b). This court=s primary objective in construing the meaning of a statute is
to ascertain and give effect to the intent of the legislature. Solon v. Midwest Medical
Records Ass’n, 236 Ill. 2d 433, 440 (2010). The plain language of a statute is the most
reliable indication of legislative intent. DeLuna v. Burciaga, 223 Ill. 2d 49, 59 (2006).
“[W]hen the language of the statute is clear, it must be applied as written without
resort to aids or tools of interpretation.” DeLuna, 223 Ill. 2d at 59.
¶ 51 I agree with the appellate court that section 13-214.3(b) is unambiguous because
the plain language indicates the intent of the legislature. See Cotton v. Private Bank &
Trust Co., No. 01 C 1099, 2004 WL 526739, at *3 (N.D. Ill. Mar. 12, 2004) (the
language of section 13-214.3 is “unambiguous with respect to its exclusive
application to attorney malpractice claims”). The language “in the performance of
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professional services” clearly limits the applicable actions to those situations when
the act or omission arose while providing “professional services” to a client.
¶ 52 As a matter of law, the attorney-client relationship is a fiduciary relationship. In
re Schuyler, 91 Ill. 2d 6, 11 (1982). As this court stated in Cornelius v. Wash, 1 Ill.
98, 100 (1825), “[t]he confidence reposed in counsel is of a personal nature, and can
not be delegated without the consent of the client.” In Morgan v. Roberts, 38 Ill. 65,
84 (1865), this court again noted that the attorney=s duty to his client “is a personal
duty and trust which cannot be delegated or performed by another.” Thus, an attorney
has a personal, professional, and fiduciary duty only to the client. See Pelham v.
Griesheimer, 92 Ill. 2d 13, 19 (1982) (“The traditional, general rule has been that the
attorney is liable only to his client, not to third persons.”).
¶ 53 The language of section 13-214.3 clearly contemplates a duty arising from an
attorney-client relationship and that the alleged injury arose out of the attorney’s
representation of the person for whom the professional services were rendered. There
is no language in section 13-214.3 suggesting that the legislature intended it to apply
in the context of a claim by a nonclient with whom the attorney never had a
professional fiduciary relationship, and to whom the attorney never owed a legal duty.
To the contrary, the plain meaning of section 13-214 demonstrates that it
unambiguously applies exclusively to legal malpractice claims arising out of acts or
omissions in the performance of professional services.
¶ 54 This conclusion is consistent with the attorney’s duty to the client in the
adversarial process. As this court has recognized:
“Where a client=s interest is involved in a proceeding that is adversarial in
nature, the existence of a duty of the attorney to another person would
interfere with the undivided loyalty which the attorney owes his client and
would detract from achieving the most advantageous position for his client.
(R. Mallen & V. Levit, Legal Malpractice sec. 80, at 159 (2d ed. 1981).) Our
code of professional responsibility requires that a lawyer represent his client
with undivided fidelity (84 Ill. 2d R. 5-107), and Canon 7 provides that a
lawyer should represent a client zealously within the boundaries of the law (84
Ill. 2d Canon 7). In cases of an adversarial nature, in order to create a duty on
the part of the attorney to one other than a client, there must be a clear
indication that the representation by the attorney is intended to directly confer
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a benefit upon the third party.” Pelham v. Griesheimer, 92 Ill. 2d 13, 22-23
(1982).
¶ 55 Here, Evanston’s complaint set forth claims for breach of implied warranty of
authority, fraudulent misrepresentation, and negligent misrepresentation, alleging
defendants falsely or negligently asserted that they had authority to bind their client,
Kieferbaum, to the FFA. Evanston’s complaint does not claim legal malpractice or
clearly indicate that the defendants “intended to directly confer a benefit upon”
Evanston (Pelham, 92 Ill. 2d at 23).
¶ 56 Other courts interpreting section 13-214.3 have similarly concluded that it applies
exclusively to legal malpractice actions. In Ganci v. Blauvelt, 294 Ill. App. 3d 508,
515 (1998), a decedent=s children brought suit against the son of the decedent=s
deceased wife, alleging that he deprived them of a portion of the wife=s estate. The
defendant son then filed a third-party complaint against his deceased mother’s
attorney seeking contribution. The trial court dismissed the third-party complaint as
untimely. The appellate court rejected the attorney’s argument that section
13-214.3(b) applied to bar the third-party complaint because the action against him
was one “ ‘arising out of an act or omission in [his] performance of professional
services.’ ” Ganci, 294 Ill. App. 3d at 515. Specifically, the court found that “the
third-party complaint does not set forth a failure of [the attorney’s] professional duty
to [the third-party plaintiff] but rather conduct on [the attorney’s] part whereby he
shared culpability for the injuries to plaintiffs.” Ganci, 294 Ill. App. 3d at 515. The
court concluded that the third-party complaint was not an action for legal malpractice
and, therefore, section 13-214.3 did not apply. Ganci, 294 Ill. App. 3d at 515.
Accordingly, the appellate court held that the third-party complaint was not barred
under section 13-214.3. Ganci, 294 Ill. App. 3d at 519.
¶ 57 In Cotton, 2004 WL 526739, the defendant filed a motion to dismiss, arguing that
the plaintiff’s claims for tortious interference, interference with economic expectancy,
inducement to breach fiduciary duty, conversion of assets, and conspiracy to breach
fiduciary duty were time-barred under section 13-214.3’s statute of limitations for
attorney malpractice actions. The plaintiff argued that section 13-214.3 applies only
within the context of traditional attorney malpractice and does not bar claims alleging
attorney wrongdoing outside the attorney-client fiduciary relationship. The court
found the language of section 13-214.3 “unambiguous with respect to its exclusive
application to attorney malpractice claims.” Cotton, 2004 WL 526739, at *3.
Specifically, the court noted:
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“Section 5/13-214.3(b) provides explicitly for a limited reach. The statute
provides for a two-year statute of limitations not merely for ‘an act or
omission of the attorney’ *** but rather for ‘an act or omission in the
performance of professional services.’ An attorney who provides professional
services assumes a fiduciary duty to the person contracting for her services.”
(Emphasis in original.) Cotton, 2004 WL 526739, at *3.
Accordingly, the court held that a professional attorney-client relationship must exist
between a plaintiff and a defendant attorney for the attorney to invoke section
13-214.3. Cotton, 2004 WL 526739, at *4.
¶ 58 In Bova v. U.S. Bank, N.A., 446 F. Supp. 2d 926 (S.D. Ill. 2006), the plaintiffs
brought an action against the defendant bank and the bank’s attorneys, alleging they
violated the Consumer Fraud and Deceptive Business Practices Act (815 ILCS 505/1
to 12 (West 2006)) in connection with mortgage foreclosure proceedings. The
defendant attorneys argued that all claims under Illinois law against an attorney are
governed by the limitations period of section 13-214.3. The court, following Ganci
and Cotton, held that section 13-214.3 applies only to actions for legal malpractice
where a defendant attorney renders legal services to the plaintiff. Bova, 446 F. Supp.
2d at 934. Since the complaint was not for legal malpractice, the court held that the
limitations period of section 13-214.3 did not apply. Bova, 446 F. Supp. 2d at 934.
¶ 59 In Wilbourn v. Advantage Financial Partners, LLC, No. 09-CV-2068, 2010 WL
1194950 (N.D. Ill. Mar. 22, 2010), the plaintiff brought a complaint alleging that a
loan company’s attorney committed fraud. The attorney claimed that section 13-214.3
barred the claim against him. Relying on Ganci and Cotton, the court held that section
13-214.3 did not apply because the defendant never served as the plaintiff’s attorney.
Wilbourn, 2010 WL 1194950, at *10.
¶ 60 Thus, my interpretation that section 13-214.3 is unambiguous and applies only to
claims for legal malpractice is in accord with Ganci, Cotton, Bova, and Wilbourn. In
fact, this court has recognized that with the passage of section 13-214.3 “ ‘a two-year
limitations period and a six-year repose period applied—without exception—to all
attorney malpractice actions.’ ” (Emphasis in original and added.) DeLuna, 223 Ill.
2d at 75 (quoting Perlstein v. Wolk, 218 Ill. 2d 448, 452 (2006)).
¶ 61 The majority opinion, however, rejects the interpretation advanced by Ganci,
Cotton, Bova, Wilbourn, and the appellate court in this case that section 13-214.3(c)
applies solely to claims brought by a client against an attorney who owes professional
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or fiduciary duties to the plaintiff. The majority reasons that this “narrow” reading
overlooks the language in the statute that the repose period applies to claims “arising
out of an act or omission in the performance of professional services.” (Emphasis in
original.) Supra & 23. The majority concludes that 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. Supra & 23. The
majority makes this conclusion, however, with absolutely no citation to any authority
to support this overly broad interpretation of the “arising out of” language of section
13-214.3.
¶ 62 I believe the majority opinion places too much emphasis on the “arising out of”
language, while ignoring the fundamental “in the performance of professional
services” language. 735 ILCS 5/13-214.3(6) (West 2008). It is a tenant of basic
statutory construction that to determine legislative intent a court should read the
statute as a whole and consider all relevant parts. Advincula v. United Blood Services,
176 Ill. 2d 1, 16-17 (1996). I disagree with the majority’s focus on one part of the
statute and its failure to read the statute as a whole. As this court has indicated “[a]
fundamental principle of statutory construction is to view all provisions of a statutory
enactment as a whole. Accordingly, words and phrases should not be construed in
isolation, but must be interpreted in light of other relevant provisions of the statute.
[Citation.]” DeLuna, 223 Ill. 2d at 60.
¶ 63 In my view, the phrase “in the performance of professional services,” clearly
indicates legislative intent to limit the applicability of the statute of repose to legal
malpractice claims by clients. The majority simply ignores the plain language of the
statute. I therefore disagree with the majority’s interpretation that no limitation is
contained in the statute.
¶ 64 The majority rejects the interpretation advanced by the appellate court as well as
all other courts that have thoughtfully analyzed and interpreted section 13-214.3 as
contemplating an attorney client relationship and, instead relies on Uldrych v. VHS of
Illinois, Inc., 239 Ill. 2d 532 (2011), Hayes v. Mercy Hospital & Medical Center, 136
Ill. 2d 450 (1990), Polsky v. BDO Seidman, 293 Ill. App. 3d 414 (1997), Donnybrook
Investments Ltd. v. Arthur Andersen LLP, No. 05 C 4883, 2006 WL 1049588 (N.D.
Ill. Apr. 20, 2006), and Citgo Petroleum Corp. v. McDermott International, Inc., 368
Ill. App. 3d 603 (2006). Uldrych and Hayes both interpreted the medical malpractice
statute of repose. Polsky and Donnybrook involved the statute of limitations for
actions against public accountants. Citgo addressed the applicability of the statute of
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repose for actions against persons in the design, planning, supervision, observation, or
management of construction. Notably, none of those cases involved interpretation of
section 13-214.3.
¶ 65 The majority relies primarily on Hayes in concluding that section 13-214.3(c)
applies to bar Evanston’s claims. In Hayes, this court addressed whether the medical
malpractice statute of repose bars third-party claims against physicians for
contribution. The relevant medical malpractice statute of repose provided, in relevant
part:
“[N]o action for damages for injury or death against any physician, dentist,
registered nurse or hospital duly licensed under the laws of this State, whether
based upon tort, or breach of contract, or otherwise, arising out of patient care
shall be brought *** more than 4 years after the date on which occurred the
act or omission or occurrence alleged in such action to have been the cause of
such injury or death.” (Emphasis added.) Ill. Rev. Stat. 1987, ch. 110, &
13-212(a).
¶ 66 This court interpreted the provision “action for damages” to bar “any action after
the period of repose seeking damages against a physician or other enumerated
health-care provider for injury or death arising out of patient care, whether at law or
in equity.” Hayes, 136 Ill. 2d at 456. We recognized the legislative history of the
medical malpractice statute of repose indicated that the General Assembly perceived
a medical malpractice insurance crisis. Hayes, 136 Ill. 2d at 457-58. We found that
the term “or otherwise” in the medical malpractice statute of repose includes actions
for contribution because it “expose[d] insurance companies to the same liability as if
the patient were to have brought a direct action against the insured.” Hayes, 136 Ill.
2d at 458. This court therefore concluded that the General Assembly intended to limit
a physician’s exposure to liability for damages for injury or death arising out of
patient care under all theories of liability, including a third-party action for
contribution. Hayes, 136 Ill. 2d at 459.
¶ 67 In my opinion, Hayes is clearly distinguishable. The language of the medical
malpractice statute of repose differs significantly from section 13-214.3. The medical
malpractice statute of repose does not contain language requiring the action to arise
out of an act or omission “in the performance of professional services.” Rather, the
language of the medical malpractice statute of repose is much broader than section
13-214.3, and bars actions against a physician or other enumerated health-care
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provider for injury or death arising out of patient care. In contrast, section 13-214.3
limits the legal malpractice statute of repose to actions for damages arising out of an
act or omission “in the performance of professional services,” indicating a duty
arising from an attorney-client relationship and an injury arising from the attorney=s
representation of the person for whom the professional services were rendered.
¶ 68 Moreover, the medical malpractice statute of repose was enacted in 1982, under
entirely different circumstances than section 13-214.3. When section 13-214.3 was
enacted, the General Assembly was not faced with a perceived legal malpractice
insurance crisis. Rather, the legislative history of section 13-214.3 indicates the
General Assembly simply intended to provide a statute of limitation on attorney
malpractice actions between an attorney and a client because there was no prior
statute of limitations for legal malpractice. See 86th Ill. Gen. Assem., House
Proceedings, May 18, 1990, at 55 (statements of Representative Cullerton) (“This Bill
creates a statute of limitations in a malpractice action brought against an attorney.
Right now there is no malpractice statute of limitation. *** It provides a two year
statute of limitation on attorney malpractice actions with a six year period of repose.”
(Emphases added.)). See also 86th Ill. Gen. Assem., House Proceedings, May 18,
1990, at 59-60 (statements of Representative Preston) (It “is providing for legal
malpractice ***. *** [T]here is no reason why someone who leaves for any reason,
the practice of law, should have to continue to buy malpractice insurance, ten,
twenty, thirty, forty years after they no longer practice law.” (Emphases added.)).
There is nothing in the legislative history indicating that the legislature intended to
bar other types of claims by nonclients. Without a clear expression of intent, this
court should decline to read the statute to bar a third-party action that does not
involve legal malpractice.
¶ 69 The majority cites to only one case that has considered the applicability of section
13-214.3 and rejected the reasoning of Ganci: 800 South Wells Commercial, LLC v.
Horwood Marcus & Berk Chartered, 2013 IL App (1st) 123660. South Wells cited
absolutely no legal authority for its statutory interpretation and conflicted with all
other published decisions on the issue. See Ganci, 294 Ill. App. 3d 508; Cotton, 2004
WL 526739; Bova, 446 F. Supp. 2d 926; Wilbourn, 2010 WL 1194950.
¶ 70 Ultimately, I would hold that the limitations period for actions against attorneys
performing professional services (735 ILCS 5/13-214.3 (West 2008)), applies only to
legal malpractice actions and does not bar other types of actions brought by a
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nonclient against an attorney. I would, therefore, affirm the judgment of the appellate
court.
¶ 71 For the foregoing reasons, I respectfully dissent.
¶ 72 JUSTICE THEIS joins in this dissent.
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