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Tuesday, October 15, 2019

Appeals court upholds dismissal of $14 million legal malpractice case vs Katten Muchin by heir of Harold Price

By Dana Herra | Sep 17, 2015

An appellate court has upheld a lower court’s ruling against the granddaughter of business luminary Harold C. Price,  rejecting the woman's suit against her attorney for legal malpractice based on claims his legal advice caused her to lose $14 million of an $18 million inheritance.

The First Judicial District Appellate Court ruled against plaintiff Lisa Vitti Beshkov in her case filed in Cook County Circuit Court against Katten Muchin Rosenman LLP, the Chicago law firm with which her previous attorney, Victor Bezman, was affiliated.

Beshkov sued in April 2014, seeking $14 million in damages stemming from counts of breach of fiduciary duty and legal malpractice against Bezman and the Katten firm. 

Cook County Associate Judge William Gomolinski approved Katten’s motion to dismiss, agreeing the legal malpractice charge was time barred and the breach of fiduciary duty charge was just a duplicate of the malpractice charge under a different name. 

On Sept. 11, a three-justice panel from the appellate court upheld the lower court’s decision.

Bezman began advising the family, whose members included Beshkov, her sister, their mother and stepfather, in estate planning matters in 2002. He advised Beshkov to revoke a document she had filed in 2000 that said any money she inherited would be placed in a trust rather than given to her directly. In a letter excerpted in the court’s opinion, Bezman explained that once the money was in the trust, Beshkov would not have access to it or control over it except at the discretion of the single trustee. Court documents said Bezman drafted a revocation, but there is no evidence Beshkov signed it and returned it to him.

In 2004, Beshkov’s grandfather Harold Price died. 

Price is credited with leading the Joe Lowe Corporation, which popularized the Popsicle, and a related business, Cottage Donuts, during the mid-20th Century. He eventually negotiated a merger with the company that would become Sara Lee Corp. 

On Price's death, Beshkov and her sister became the beneficiaries of a family trust. Beshkov’s share of the inheritance was $18 million, according to court documents. That same year, Beshkov executed an agreement with the trustee of the family trust which stated that any inheritance from the family trust would be held in the trust she established in 2000.

Beshkov said Bezman failed to represent her by not disclosing the revocation of the 2000 trust to the family trustee, but Katten responded that she should have realized when she signed the agreement with the trustee that the revocation had not taken place.

Bezman then orchestrated a network of trusts and partnerships among the various members of the family, court documents said. In her suit, Beshkov says she was under the impression this planning was beneficial and was protecting her assets and those of her family.

In 2009, Deutsche Bank became the new trustee of Beshkov’s trust, and she learned that only about $3.5 million of the initial $18 million remained in the trust. Beshkov said it was at that time she began to realize how little control over the money she truly had, though she had been executing agreements and establishing trusts for nearly five years at that point.

There is a two-year statute of limitations and a six-year statute of repose for actions against an attorney arising from their professional services, the justices said. In upholding the circuit court’s dismissal, the appellate justices noted that even at the latest date Beshkov could reasonably say she had become aware of her injury, she still had at least six to nine months in which to file a claim before the statute of limitations ran out, but had not.

The appellate order upholding the lower court was issued under Supreme Court Rule 23, which prohibits it from being cited as precedent except in specific circumstances. Justice Stuart E. Palmer delivered the court’s opinion, and justices Robert E. Gordon and Jesse Reyes concurred.

Beshkov was represented by attorney Matthew R. Davison, of Arlington Heights.

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Organizations in this Story

Deutsche Bank Illinois First District Appellate Court Katten Muchin Rosenman LLP Matthew R. Davison LLC

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