Editor's note: This story has been revised from a previous version to clarify that attorney Ryan Rappa has no professional relationship to the law firm of Massey & Gail. A previous version did not clearly render that distinction.
A state appeals panel has refused to undo a verdict in which a jury ordered a Chicago lawyer to pay $700,000 to former clients who said his legal advice cost them up to $2.7 million.
According to court documents, the legal malpractice claim dates to March 2017, when Midwest Mailing & Shipping Systems, a postage meter company, sued the Chicago law firm of Schoenberg, Finkel, Newman & Rosenberg and two attorneys, Robert Goldberg and Leonard Gambino.
Midwest Mailing, a Wisconsin corporation using downstate Bloomington as its principal place of business, had retained the law firm several years earlier in part due to disputes with Neopost, to act as a dealer of Neopost equipment. Schoenberg, Finkel, Newman & Rosenberg represented Midwest Mailing in 2002 during a breach of dealership agreement resolved in a 2004 settlement. The malpractice claims step from a 2015 lawsuit alleging another breach of the agreement as well as of the settlement.
Concurrent with that litigation, according to records, the law firm also advised Midwest Mailing to corporately reorganize by incorporating a new entity in Illinois and terminating its Wisconsin incorporation. But under the dealership agreement with Neopost, an unauthorized assignment of Midwest Mailing’s rights — such as from the original Wisconsin business to the new Illinois entity — would allow Neopost to terminate the dealership contract.
Neopost took that step in September 2015, and although the companies ultimately resolved their differences, Midwest Mailing relinquished a territorial exclusivity right in exchange for the payment of $300,000. When the company sued the law firm, it alleged the reorganization advice was the ultimate cause of substantial legal fees and compromising contractual rights.
Schoenberg, Finkel, Newman & Rosenberg denied those allegations and filed a third-party contribution complaint against Midwest Mailing’s new legal team, Massey & Gail and attorney Eli Kay-Oliphant. That contribution complaint also named as a defendant attorney Ryan Rappa, identified in the decision as "the son of Midwest’s owners and the 'outside general counsel to Midwest.'” A judge dismissed that complaint with prejudice in late 2019, and the First District Appellate Court affirmed that dismissal in March 2021.
With that matter resolved, Schoenberg, Finkel, Newman & Rosenberg sought summary judgment on the malpractice litigation, saying Midwest Mailing provided no evidence to show the alleged malpractice caused the company to lose exclusivity rights. In that motion, the firm noted Midwest Mailing damages expert Christopher Alexander testified that, without the malpractice, Neopost would’ve paid $2.73 million for the company to relinquish its rights.
Cook County Circuit Court Judge Daniel Kubasiak denied the motion for summary judgment as well as a subsequent motion to bar Alexander from testifying at the jury trial and objections before and following his testimony. After Midwest Mailing presented its evidence, Kubasiak entered a directed verdict in favor of the law firm on the allegations of breach of fiduciary duty. After Schoenberg, Finkel, Newman & Rosenberg presented evidence, the jury found in favor of the law firm and Gambino on the legal negligence claim, but against Goldberg, for which it awarded Midwest Mailing $700,000.
Justice Mary Rochford wrote the panel’s decision on Goldberg’s appeal of that verdict and damages, issued Jan. 26. Justices Bertina Lampkin and LeRoy Martin concurred. The order was issued under Supreme Court Rule 23, which may restrict its use as precedent.
Goldberg’s appeal argued Judge Kubasiak abused discretion by admitting Alexander’s testimony, alleging it was “based upon guess, speculation and conjecture.”
However, Rochford wrote, “as the record clearly reflects and as Midwest correctly notes in its brief, Goldberg never filed a posttrial motion raising this or any other issue prior to filing his notice of appeal.” She further explained case law consistently results in the opinion “Goldberg forfeited any issue on appeal when he failed to file a posttrial motion following the jury verdict.”
Goldberg argued he retained a right to challenge Alexander’s testimony because the motion for summary judgment incorporated that issue, but the panel said Judge Kubasiak denied that motion, and Goldberg’s request amounted to an inappropriate appeal of that denial.
The panel also rejected Goldberg’s arguments that rulings on admissions of expert testimony aren’t subject to forfeiture as the per the panel’s finding, but Rochford explained “numerous cases have specifically found issues regarding the admission of expert testimony to be forfeited on appeal where they were not raised in a posttrial motion.”
Furthermore, she wrote, even if the panel had agreed with Goldberg on any of his arguments on the validity of his appeal, it still wouldn’t rule in his favor based on a determination the admitted testimony didn’t substantially prejudice the jury toward a verdict in Midwest Mailing’s favor. The justices also said the financial award was at the jury’s discretion. They noted, among other reasoning, the $700,000 is a steep discount from the $2.7 million Alexander said Midwest Mailing lost resulting from the reorganization advice.