Posted on: 9/13/2012
Edward C. Eberspacher IV, O'Hagan Spencer
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On February 1, 2012, Illinois Senate Bill 2952 (the "Bill") was introduced to create new exception(s) to the statute of repose for attorney malpractice that currently limits actions to no later than six years after the date on which the attorney's act or omission occurred. As introduced, the exception would apply: (1) if the client is still represented by the attorney; or (2) the attorney knowingly conceals the act or omission giving rise to the claim. In such cases, the "period of limitations" would not begin to run until: (1) the person is no longer represented by the attorney; or (2) the client knows or should have known of the injury. See full text ofSB2952 at http://www.ilga.gov/legislation/.
I. Knowing Concealment
The Bill is interesting because the "knowing concealment" exception is already codified in Illinois:
If a person liable to an action fraudulently conceals the cause of such action from the knowledge of the person entitled thereto, the action may be commenced at any time within five years after the person entitled to bring the same discovers that he or she has such cause of action, and not afterwards.
735 ILCS 5/13-215. In addition to operating as an exception to the statute of limitation, Section 13-215 is also an exception to the statute of repose in legal malpractice actions. DeLuna v. Burciaga, 223 Ill. 2d 49, 74 (2006). Thus, the portion of the Bill creating a "knowing concealment" exception would appear to be unnecessary and duplicative of the previously-enacted statute.
In Illinois, there is an exception to the "knowing concealment" exception. If a party discovers the cause of action with sufficient time remaining in the original limitations period, the claim must be filed in that original period, regardless of any concealment, and Section 13-215 is of no consequence. Morris v. Margulis, 197 Ill. 2d 28, 38 (2001). See alsoAnderson v. Wagner, 79 Ill. 2d 295, 322 (1979) (despite concealment, Section 13-215 did not apply when seven months remained in the original limitation period at the time the concealment was discovered); Witt v. Jones & Jones Law Offices, P.C., 269 Ill. App. 3d 540, 544-45 (4th Dist. 1995) (Section 13-215 did not apply when three months remained in the original limitation period at the time the concealment was discovered); Smith v. Cook County Hospital, 164 Ill. App. 3d 857, 863-64 (1st Dist. 1987) (Section 13-215 did not apply when five and one-half months remained in the original limitation period at the time the concealment was discovered);Navistar Int'l Corp. v. Hagie Mfg. Co., 662 F. Supp. 1207, 1212-13 (N.D. Ill. 1987) (Section 13-215 did not apply when eleven and one-half months remained in the original limitation period at the time the concealment was discovered).
It is unclear from the synopsis or the Bill itself, and thus too early to tell, but perhaps the proposed legislation aims to upend Illinois' longstanding exception to the "knowing concealment" exception such that a party's discovery of a fraudulently concealed cause of action with sufficient time remaining in the original limitations period no longer must file in that original period. Or perhaps the Bill aims to extend the repose period in cases of knowing concealment from five years (the fraudulent concealment statute) to six years (the statute of repose for claims against attorneys). Or perhaps the portion of the Bill creating a knowing concealment exception is no real creation at all, insofar as a fraudulent concealment statute already exists in Illinois and is applicable to actions against attorneys arising out of the performance of professional services.
II. Continuous Representation
Although Illinois has long recognized a "knowing concealment" exception to the statute of repose (and limitation), the Bill's introduction of a "continuous representation" exception is undeniably new and, if enacted into law, would result in significant changes to the legal malpractice landscape.
The statute of repose is designed to put a limit on the period of time that one can commence an action. It begins to run from the time of the complained-of act or omission that gave rise to the injury, regardless of any continuous representation by the attorney thereafter. The statute of repose does not contain a "discovery rule" as is found in the statute of limitation, is not related to the accrual of any cause of action and the injury need not have occurred, much less have been discovered, for the statute of repose to apply.
By establishing a date-certain for the termination of actions, the repose period "enables malpractice insurers to predict future liabilities and alleviate their need to maintain loss reserves." Fricka v. Bauer, 309 Ill. App. 3d 82, 86 (1st Dist. 1999) (internal citation omitted). Moreover, statutes of repose "represent a pervasive legislative judgment that justice requires an adversary to be put on notice to defend for a specific period of time, after which the right to be free of stale claims in time comes to prevail over the right to prosecute them." Sorenson v. Law Offices of Theodore Poehlmann, 327 Ill. App. 3d 706, 709 (2d Dist. 2002)(internal citations omitted). Absent the statute of repose, the statute of limitation would be "essentially open-ended" or "a limitations period without a limit." Id.
For all of the above reasons, Illinois courts have heretofore rejected the "continuous representation" rule as an exception to the statute of repose. See, Sorenson v. Law Offices of Theodore Poehlmann, 327 Ill. App. 3d 706, 710 (2d Dist. 2002) (the continued existence of the attorney-client relationship after the acts or omissions alleged to have caused injury has no effect on the repose period); Witt v. Jones & Jones Law Offices, P.C., 269 Ill. App. 3d 540, 544 (4th Dist. 1995) (rejecting a continuous representation rule).
Not all jurisdictions follow Illinois' historical refusal to recognize a continuous representation rule. The justifications for applying the rule to toll the period of limitations and/or repose were summarized by one New York court as follows:
[T]he rule recognizes that a person seeking professional assistance has a right to repose confidence in the professional's ability and good faith, and realistically cannot be expected to question and assess the techniques employed or the manner in which the services are rendered. Neither is a person expected to jeopardize his pending case or his relationship with the attorney handling that case during the period that the attorney continues to represent the person. Since it is impossible to envision a situation where commencing a malpractice suit would not affect the professional relationship, the rule of continuous representation tolls the running of the Statute of Limitations on the malpractice claim until the ongoing representation is completed.
Glamm v. Allen, 57 N.Y.2d 87, 93-94 (N.Y. 1982)(internal citations omitted).
Illinois Senate Bill 2952, as it was introduced, raises a number of unanswered questions. Does the Bill's "knowing concealment" exception modify the previously-enacted fraudulent concealment statute for claims against attorneys by tolling the time to file suit from five years (Section 5/13-215) to six years (Section 5/13-214.3(c))? Does the Bill aim to upend Illinois' longstanding exception to the "knowing concealment" exception regarding a client's discovery of the fraudulent concealment during the original period of limitation rendering Section 13-215 of no consequence?
Similarly, the Bill's "continuous representation" exception raises a number of additional unanswered questions. If enacted, would the continuous representation rule only apply to toll the statute of repose, or would it also toll the statute of limitation? Although the proposed amendment is found in Illinois' statute of repose, the language in the Bill uses the phrase "period of limitations." If the Bill's continuous representation rule only aims to toll the period of repose, can a client's malpractice cause of action accrue prior to the termination of the attorney-client relationship if he or she knew or reasonably should have known of the injury for which damages are sought and that they were caused by the attorney's wrongful acts or omissions?
Whatever the answers to these questions, Illinois may soon find itself joining the ranks of those jurisdictions that recognize and apply the continuous representation rule to toll the time for filing malpractice claims against attorneys. Irrespective of the Bill's passage or demise, it is both good business practice, and good risk management, to keep your client notified in writing regarding the status of his or her case at all times. If you receive an adverse ruling from the court or miss an important deadline, communicate that information to your client and, when necessary, withdraw from the case. Doing so may not insulate the lawyer from legal malpractice claims, but written status updates provide a service to the client and at the same time provide evidence regarding the precise point in time when the client knew or should have known of the injury for which damages are sought.