A state appeals court has backed a circuit court’s decision
to dismiss a developer’s malpractice
complaint against a lawyer he accused of misconduct in a case involving a
collapsed deal to build a sports arena in Chicago’s northwest suburbs, with the
appellate justices saying the case was several years too late.
In an opinion issued May 23, the Illinois First District
Appellate Court upheld the ruling of Cook County Circuit Judge John P. Callahan,
who dismissed the complaint Prospect Development and a consultant, John G.
Wilson, filed against Schiff Hardin and one of its attorneys, Donald Kreger.
Justice Sheldon A. Harris wrote the opinion; justices Joy V.
Cunningham and Maureen E. Connors concurred.
The issue stems from a collapsed plan to build a sports
arena in Prospect Heights. According to the opinion, Wilson — hired in
1994 to conduct an arena feasibility study — and Prospect Development
previously filed a breach of contract lawsuit against Prospect Heights. Kreger was
general counsel for the city from 1977 until the arena deal fell through in
2003; he and Wilson became close after their sons were on the same hockey team.
Wilson and the developer successfully proved breach of
contract, Harris wrote, but were denied the chance to recover as much as $20
million on account of undisclosed loans the developer made to Kreger. Following
that ruling, Prospect Development and Wilson filed the malpractice claim.
In the original breach of contract complaint, Wilson and his
companies said Kreger approached Wilson “on multiple occasions to ‘request’ a
$100,000 loan in connection with a personal financial problem.” Wilson said he agreed
to lend the money out of fear a refusal would keep Prospect Development from
completing the arena project.
The plaintiffs argued “each time a loan was made from
1997-2001, they inquired as to the propriety of the loans and whether they
should be disclosed,” and, each time, Kreger “gave them negligent advice.” They
further contend Kreger hid that malpractice until the breach of contract action
was finalized on July 23, 2010.
On July 12, 2012, Wilson and his firm filed their complaint,
arguing Kreger’s advice regarding the loans constituted malpractice. Kreger and
Schiff Harden moved to dismiss, alleging the six-year statute of repose for
legal malpractice barred Wilson’s action.
In their second amended complaint, filed in 2013, the
plaintiffs acknowledged they filed the malpractice complaint after the repose
expired, but said Kreger’s statements regarding the propriety of the loans tolled
On May 23, 2014, the circuit court denied the motion to
dismiss, saying the statute of repose did not begin until the 2010 ruling. But
Kreger and Schiff Harden moved for reconsideration, explaining “repose runs
from the date of the negligent act, not the date the negligent act causes
injury.” The 2010 ruling, they continued, “established that by January 2005,
plaintiffs were on notice they could not rely upon the alleged advice from
The circuit court granted the motion to dismiss on Oct. 20,
2014. Wilson and his firm filed their own motion to reconsider; it was denied with
prejudice on Jan. 14, 2015. The First District opinion is on Wilson’s appeal of
Harris acknowledged the state’s repose laws can create “a
harsh result” and explained why Illinois courts don’t apply equitable estoppel
or fraudulent concealment to toll a statute of repose when the act should have
been discovered through general diligence and, as in this case, reasonable time
remained to lodge a complaint.
The justices said, even the developers’ suspicion in 2005
that Kreger’s 2001 advice was negligent would have been sufficient to begin the
Prospect Development was represented in the case by attorney
Saif R. Kasmikha, of Novi, Mich.
Kreger and Schiff Hardin were defended by the firm of Miller
Shakman & Beem, of Chicago.