Mauer v. Rubin

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Mauer v. Rubin

State: Illinois

Court: 1st District Appellate

Docket No: 1-08-3211 Rel

Case Date: 03/26/2010

Preview:SIXTH DIVISION March 26, 2010 No. 1-08-3211

MARSHALL MAUER, Plaintiff-Appellant, v. ROGER RUBIN and BEERMAN, SWERDLOVE, WOLOSHIN, BAREZKY, BECKER, GENIN & LONDON, Defendants-Appellees.

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Appeal from the Circuit Court of Cook County, Illinois.

No. 07 L 10338

Honorable Barbara A. McDonald, Judge Presiding.

JUSTICE JOSEPH GORDON delivered the opinion of the court: This is a legal malpractice action brought by plaintiff Marshall Mauer on October 1, 2007, against his former attorney, Roger Rubin, and Rubin's law firm, Beermann, Swerdlove, Woloshin, Barezky, Becker, Genin & London (the Beermann firm). The issue before us on appeal is whether plaintiff's suit is barred by the six-year statute of repose for legal malpractice actions (735 ILCS 5/13-214.3 (West 2009)). Rubin, as a member of the Beermann firm, represented Mauer in the underlying action, in which Mauer obtained a divorce from his wife, Frances Mauer (Frances). Mauer was the president of Dynamic Healthcare Consultants, Inc., and he possessed interests in various health care entities valued at millions of dollars, as well as various debts and liabilities in connection with those interests. After negotiating, Mauer and Frances reached an understanding regarding the division of these assets and obligations. Defendants then drew up a written marital settlement agreement (Agreement) which the parties signed and which was incorporated into the

No. 08-2311 judgment of dissolution entered on June 18, 2001. Mauer alleges that this Agreement was defective. Specifically, he argues that defendants negligently omitted certain obligations that were attached to the divided marital properties, thus leaving him responsible for more than his proper share of the obligations. Mauer further alleges that when he brought this error to defendants' attention, defendants negligently delayed filing a petition for relief from judgment, and that they later withdrew that petition without Mauer's knowledge or consent on February 16, 2005, the date it was set for hearing. After February 16, 2005, defendants' representation of Mauer ended, and Mauer hired new counsel. Meanwhile, the Wedgewood Nursing Pavilion, LLC, a company subject to the Agreement, was liquidated in March 2005. Under the Agreement, Frances was entitled to $831,275 of the liquidation proceeds. Mauer refused to give her this amount. He claimed that he was entitled to keep it as a set-off against her unpaid obligations that she should have borne under the understanding they reached regarding the division of their marital assets, but that were erroneously omitted from the Agreement. Frances then brought an action for conversion (hereinafter, the conversion suit) against him. On October 11, 2005, Frances prevailed in the conversion suit, and judgment in the amount of $831,275 plus interest was entered against Mauer. Subsequently, on October 1, 2007, Mauer brought the instant legal malpractice lawsuit against Rubin and the other defendant attorneys in this case, seeking damages that he allegedly incurred as a result of the defective Agreement, including the judgment rendered against him in the conversion suit. Defendants filed motions to dismiss pursuant to 735 ILCS 5/2-619 (West 2009). They

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No. 08-2311 contended, in relevant part, that Mauer's action was time-barred by the six-year statute of repose, since the action was filed over six years after the judgment of dissolution incorporating the allegedly defective Agreement. The trial court granted these motions. Mauer now appeals. For the reasons that follow, we affirm. I. BACKGROUND In his complaint for legal malpractice, Mauer alleged that on January 1998, he retained the Beermann firm to represent him in a dissolution of marriage proceeding. The marital estate included interests in various partnerships and entities involved in the health care business. Many of these entities were indebted to lenders. Mauer and his ex-wife agreed to a distribution of these assets and debts whereby each of them would be responsible for the debts attached to the properties they received in the settlement, or where the parties remained co-owners of a property, they were to have joint responsibility for any debt attached to that property. Defendants then drew up the Agreement for Mauer and his ex-wife to sign. Mauer alleged that in this document, defendants inadvertently failed to attach the complete list of debts that should have been divided between him and his ex-wife, thus leaving him with more than his proper share of the debts. Mauer further alleged that Rubin assured him that all aspects of the settlement had been properly documented in the Agreement, so Mauer did not scrutinize the details of the Agreement before signing. A copy of the Agreement, dated June 18, 2001, is attached to the complaint. It identifies Mauer as the president of Dynamic Healthcare Consultants, Inc., provides a list of ownership interests in companies that Mauer has, and provides a one-page list of loans and guarantees

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No. 08-2311 attached to those interests. It also sets forth the division of those ownership interests and liabilities. The Agreement is initialed on every page by Mauer and Frances and bears their signatures at the end. On that same day, June 18, 2001, the trial court entered a judgment for dissolution of marriage that incorporated the terms of the Agreement. After this judgment had been entered, Mauer allegedly realized that the Agreement was defective and called this matter to the attention of Rubin and Rubin's senior partner Beermann. In the complaint, he stated that this meeting occurred in July 2002. However, in a subsequently filed affidavit, he changed this date to July 2001, placing it a couple weeks after the divorce judgment. At this time, according to Mauer, Rubin assured him that he would file an appropriate motion to vacate the judgment so that the accurate list could be made part of the Agreement. However, Rubin did not actually file a postjudgment motion, styled a "motion to correct," until September 12, 2002. A copy of this motion is attached to the complaint. It states that it is being brought pursuant to section 2-1203 of the Code of Civil Procedure (735 ILCS 5/2-1203 (West 2009)), which provides for modification of a judgment in a non-jury case within 30 days after entry of the judgment, and section 2-1401 of the Code of Civil Procedure (735 ILCS 5/2-1401 (West 2009)), which provides for relief from judgments after the 30-day period has passed. The motion seeks modification of the divorce settlement on grounds of mutual mistake.1 The trial

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When the court approves a marital settlement agreement concerning property rights and

incorporates it into the divorce judgment, the agreement is merged into the judgment, and the parties' rights thereafter rest upon that judgment. Sondin v. Bernstein, 126 Ill. App. 3d 703, 708, 467 N.E.2d 926, 931 (1984). Illinois courts have recognized a 2-1401 petition as a proper avenue -4-

No. 08-2311 court struck the portion of the petition brought pursuant to section 2-1203 as untimely, leaving it as a pure 2-1401 petition. (For this reason, we shall refer to it as "the 2-1401 petition.") In her response to the 2-1401 petition, Frances argued that modification of the judgment should be denied because Mauer's counsel waited more than 15 months after the entry of the divorce decree to file the petition and therefore did not act with due diligence. She also contended that the petition did not allege a meritorious claim, in that she had never intended to be responsible for the additional obligations that Mauer sought to attach to the Agreement, so no mutual mistake had occurred. The record does not reflect what, if any, response defendants made to these contentions. However, Mauer alleged that on February 16, 2005, the date that the section 2-1401 petition was set for hearing, Rubin advised the court and opposing counsel that he was voluntarily withdrawing the petition. According to Mauer, Rubin took this action without first informing him or obtaining his consent. Mauer further alleged that his ex-wife filed a suit for conversion (the conversion suit) against him in 2005. He did not elaborate upon the nature of this suit in his complaint except to aver that she sought relief which would have been precluded if the defendants had handled his

for reformation of such an agreement where it fails to express the parties' real intentions due to mutual mistake. See In re Marriage of Johnson, 237 Ill. App. 3d 381, 394, 604 N.E.2d 378, 38788 (1992); In re Marriage of Shelton, 127 Ill. App. 3d 775, 780-81, 469 N.E.2d 618, 623 (1984). The petitioner bears the burden of showing, by clear and convincing evidence, that the settlement was written in terms that violate the understanding of both parties. Johnson, 237 Ill. App. 3d at 394, 604 N.E.2d at 388. -5-

No. 08-2311 case with ordinary care. In October 2005, Mauer's ex-wife prevailed in her suit, and judgment in the amount of $831,000 plus interest was rendered against Mauer. Based upon these allegations, the complaint stated that defendants had fallen short of the standard of care in the following ways: "19. A reasonably careful attorney handling Plaintiff's matter would have: (a) made certain the transaction was documented properly; (b) upon learning there was inadequate documentation to reflect the true agreement of the Plaintiff and his ex-wife, filed a timely post-judgment motion; and (c) would have prosecuted the 2-1401 petition; or (d) obtain the consent of the client before withdrawing the petition." Mauer therefore sought damages in the amount of $831,000 plus interest, plus an unspecified sum for the various obligations that he alleged should have been allocated to his ex-wife but which he remained solely responsible for, by reason of the Agreement as drawn up by defendants. Defendants each filed separate motions to dismiss under section 2-619 of the Code of Civil Procedure (735 ILCS 5/2-619 (West 2009) (allowing involuntary dismissal of actions not commenced within the time allowed by law)). They each contended that Mauer's action was barred by the six-year statute of repose for legal malpractice actions (735 ILCS 5/13-214.3 (West 2009)), since his complaint, filed on October 1, 2007, came over six years after judgment was entered in the dissolution of marriage case on June 18, 2001. They further contended that Mauer could not establish damages, because the judgment rendered against him in the conversion suit was a result of his own actions, not the actions of defendants.

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No. 08-2311 In response to defendants' statute of repose argument, Mauer contended that defendants had been engaged in a continuous course of negligent representation that continued until defendants withdrew the 2-1401 petition on February 16, 2005. Therefore, he argued, the statute of repose did not begin to run until that date. He further averred, in an attached affidavit, that Rubin assured him on multiple occasions that the error with the Agreement would be corrected and that, even under the current version of the Agreement, his ex-wife was responsible for the guarantees and contingent liabilities attendant to the business interests which she was awarded in the divorce, despite the fact that the full list of such obligations was not attached. In response to defendants' contention that he could not prove damages, Mauer argued that his loss in the conversion suit was, in fact, a result of defendants' negligence. He pointed out that the suit was triggered by the March 2005 liquidation of the Wedgewood Nursing Pavilion, LLC, which was one of the health care companies that Mauer had an interest in, and which was subject to the Agreement. Under the Agreement, Frances was entitled to receive $831,275 from the liquidation of the company. Mauer, in his capacity as representative of the company, wrote a check payable to Frances for $831,275, but he then refused to tender the check to her. He asserted that he was entitled to keep part of those funds as a set-off against Frances' unpaid obligations

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