Supreme Court Summaries

Opinions filed February 21, 2014

 

 

 

Evanston Insurance Co. v. Riseborough, 2014 IL 114271

 

 

Appellate citation: 2011 IL App (1st) 102660-U.

 

            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.

 

 

      This Cook County appeal deals with the applicability of a statute of repose. Section 13-214.3 of the Code of Civil Procedure, entitled “Attorneys,” states that an “action for damages based on tort, contract, or otherwise *** against any 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 *** but *** not *** in any event more than 6 years after the date on which the act or omission occurred.” A statute of repose extinguishes an action after a defined period of time and is not tolled by the discovery rule.

      The plaintiff in the action, Evanston Insurance Co., was the excess insurer of subcontractor International Crown, one of whose employees was injured in 1996 in the construction of a Green Oaks warehouse for which Kiferbaum Construction was the general contractor. There were several other subcontractors and insurers. In the employee’s personal injury action against general contractor Kiferbaum, that company was represented by the attorneys who are the defendants here. The personal injury action was settled for $4,887,500 in 2000.

      Plaintiff Evanston Insurance Co. and other involved insurers denied coverage and sought declaratory relief in a separate action, known as the “coverage action,” in which their claims of noncoverage were eventually consolidated. In 2000, after the settlement, various insurers entered into a “Fund and Fight Agreement” in which they agreed to contribute their respective policy limits to fund the settlement and reserved the right to litigate policy and coverage defenses among themselves. Kiferbaum was a party to that agreement, stating the terms on which it would reimburse the contributors. On Kiferbaum’s behalf, the agreement was signed by defendant George E. Riseborough of the firm of Jacobsen & Riseborough. Plaintiff Evanston, as excess insurer, contributed $1 million to the personal injury settlement, but would later claim that primary coverage from Statewide Insurance Company should have been exhausted first, and it sought reimbursement from Kiferbaum. In 2003, the president of Kiferbaum executed an affidavit stating that he had no knowledge of the agreement and that attorney George Riseborough had signed the agreement without authority. Based on this, plaintiff Evanston filed suit against the defendant attorneys in 2005, alleging breach of implied warranty of authority, fraudulent misrepresentation, and negligent misrepresentation. Legal malpractice was not alleged. In 2009, Evanston filed its second amended complaint, which is the pleading at issue here. The same claims were reasserted.

      The issue in this case is whether the six-year repose period in the statute quoted above applies only to professional services rendered to a client, i.e., to legal malpractice claims. The supreme court held in this decision that the statute unambiguously is not so limited. Rather, the six-year repose period applies to all claims against attorneys concerning their professional services, even if brought by nonclients. Plaintiff Evanston was not George Riseborough’s client. The second amended complaint, filed in 2009, was based on the agreement executed in 2000, and, thus was filed more than three years after the expiration of the six-year statute of repose.

      Plaintiff Evanston had alternative theories, including that the second amended complaint related back to earlier pleadings and that there was error in an earlier dismissal of its claim as premature. These were found by the supreme court to have been forfeited. In addition, Evanston could not successfully argue that the earlier dismissal without prejudice for prematurity allowed it to circumvent the statute of repose by filing an amended complaint after the repose period had expired.

      The circuit court’s dismissal of the second amended complaint with prejudice as barred by the statute of repose was affirmed. The appellate court, which had interpreted the statute differently and held otherwise, was reversed.