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Published On: Thu, Sep 26th, 2019

The Injustices of the Discovery Rule: Case of Geoffrey Hammond

When Geoffrey Hammond hired David F. Wentzel and Scott Blake, he hoped the two attorneys would represent his interests in a lawsuit and settlement negotiation involving his family’s $125 million estate. Instead, legal malpractice and fraud on the part of the two lawyers may have cost Hammond $5 million, as well as possible undiscovered damages.

The dispute over the family’s assets had been developing over the course of several decades. Hammond’s grandparents, Daniel P. O’Brien Sr. and Mary D. O’Brien had amassed a small fortune over their lifetime, including fast-food franchises, gas stations, hotels, warehouses, many other business interests and a large amount of capital. The total value of the O’Brien family’s assets was estimated to be $125 million as of March 2013.

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The O’Brien’s had six children Dan Jr., Maureen, Kathleen, Margaret, Peter and Hammond’s mother, Patricia in addition to at least 14 other grandchildren. After the death of Dan Jr. in 1989, the grandparents named Peter, their only living son, as their agent and controlling trustee of their revocable trusts and businesses.

After Peter was appointed, the family engaged in disagreements and protracted litigation over the control and disposition of the family assets for years. In a lawsuit filed against Peter and their estate planning attorney, the grandparents claimed Peter had tricked them into giving him control of the majority of the family assets.

In 2012, Hammond and his half-brother Daniel joined with two surviving O’Brien children, Peggy and Maureen, and one grandson, Dan III, to file a lawsuit against Peter, alleging that Peter had breached his fiduciary duties as a trustee while in control of the family’s assets.

In the lawsuit, Hammond and Daniel were both represented by Wentzel and Blake. When the brothers hired the lawyers and throughout their representation, Hammond would “repeatedly” explain to Wentzel that his goal in the lawsuit was “to obtain assets equal in value to [his] respective interest in the family assets, free from other family members’ control.”

Through mediation and arbitration, the parties came to an agreement on the basic terms of a settlement in March 2013 of which Hammond was not even present. The final global settlement would be closed in November 2013.

Hammond contends that the lawyers agreed to a settlement on his behalf without representing his interests and expressed directions. According to Hammond, the two lawyers coerced him to settle the suit contrary to his instructions by continually misrepresenting to address divestiture before the global settlement.

In October 2015, Hammond filed an instant cause of action against the lawyers, twice amending the complaint alleging that the lawyers negligently and fraudulently misrepresented in the negotiations and ultimately agreed to terms that contradicted his desires and requests.

However, Hammond’s malpractice claims were dismissed by the Illinois appellate court as being time-barred under the state’s two-year civil statute of limitations for legal malpractice actions. The court found that Hammond should have discovered the malpractice and fraud after the mediation settlement in March 2013.

“The plaintiff’s injury accrued, at the very latest, upon the entry of the binding arbitration award that determined the enforceability of the March mediation settlement that he ‘vehemently’ disagreed with,” the judges said. “The fact that the amount of the plaintiff’s monetary damages was not yet fixed or known at that point does not mean that the damages themselves were speculative.”

Hammond alleged that Wentzel and Blake continually misrepresented requests to divest before the closing would occur on November 27. Wentzel withdrew just eight days before the closing on November 19, but Hammond could not know about the injury until his attorney withdrew.

Illinois Civil Statute of Limitation Laws for Legal Malpractice

The unfavorable outcome of Hammond’s appeal spotlights an injustice in the Illinois civil statute of limitation laws. As established in 13-214.3 of the Code (735 ILCS 5/13-214.3 (West 2016)):

 “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 or against a non-attorney employee arising out of an act or omission in the course of his or her employment by an attorney to assist the attorney in performing 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.”

Effectively, a litigant has only two years to file an action against a lawyer for legal malpractice or other injuries. The two-year window begins as soon as that individual knows or “reasonably” should have known of the injury for which they are filing a lawsuit.

In Hammond’s case, the malpractice claim against the attorneys who may have cost him millions was dismissed largely because the clock ran out, despite filing before two years from the closing. Filing an appeal was complex and expensive, Hammond recalls, and finding quality legal representation during the short window was a significant obstacle.

“While in theory the justice system provides equality under law, in practice only the rights you can afford to enforce are not lost,” reflects Hammond. “The appellate court should have a higher standard for the expense and time of bringing controversies to their attention.”

Appellate courts exist to review the procedures and decisions of the trial court to determine that the law was applied correctly. For many litigants, appellate courts represent a forum of last resort. Considering the time, effort and expense that goes into filing an appeal due to a potential error by the trial court, petitioners should be allowed a reasonable amount of time to file a claim.

A petition for leave to appeal to the Illinois Supreme Court is pending.

Author: James Daniel

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