Doyle v. Thomas B. Hood & Thomas B. Hood Law Offices, P.C.

2018 IL App (2d) 171041

112 N.E.3d 1040

Michael A. DOYLE, as Trustee of the Patricia A. O'Malley Supplemental Trust, Plaintiff-Appellant,

v.Thomas B. HOOD and Thomas B. Hood Law Offices, P.C., Defendants-Appellees.

No. 2-17-1041

Appellate Court of Illinois, Second District.

Opinion filed September 28, 2018

Brian R. Holman and Dennis H. Stefanowicz Jr., of Holman & Stefanowicz, LLC, of Chicago, for appellant.

Daniel F. Konicek, Michael P. Hannigan, and Amanda J. Hamilton, of Konicek & Dillon, P.C., of Geneva, for appellees.

OPINION

JUSTICE JORGENSEN delivered the judgment of the court, with opinion.

¶ 1 Plaintiff, Michael A. Doyle, as trustee of the Patricia A. O'Malley Supplemental Trust (Supplemental Trust), sued defendants, Thomas B. Hood and Thomas B. Hood Law Offices, P.C., alleging legal malpractice in connection with defendants' preparation of the living trust of his father, Harry G. Doyle Jr. (through which the Supplemental Trust, a special-needs trust, was created) and his will. Defendants moved to dismiss Michael's complaint, alleging that it was time-barred under the special repose period in section 13-214.3(d) of the Code of Civil Procedure (Code) ( 735 ILCS 5/13-214.3(d) (West 2016) ). The trial court granted the motion and dismissed the complaint with prejudice. Michael appeals. We affirm.

¶ 2 I. BACKGROUND

¶ 3 In 2011, Harry retained defendants to prepare documents in connection with an estate plan for him and, according to Michael, his wife, Patricia A. O'Malley.

(Patricia suffered from Alzheimer's disease.) Defendants prepared the Harry G. Doyle Jr. Revocable Living Trust (Living Trust) and Harry's will. On December 15, 2011, Harry executed the two documents.

¶ 4 The Living Trust established the Supplemental Trust, with Patricia as its beneficiary. The Living Trust provided that Patricia

"has a disability which substantially impairs her ability to provide for her own financial and support needs. As a result of said disability, [Patricia] will have the right to receive certain benefits from public programs. Continued full access to the benefits of these programs is essential to meet [Patricia's] needs for basic maintenance, support services and medical care. At that same time, these programs may leave gaps in basic services, many provide adequately [sic ] in emergencies, and may not provide for needs, wants and opportunities beyond basic necessities."

The document further provided:

"It is the intent of the Grantor that the Trust assets are to be used to supplement and never supplant benefits of public programs, and that no distribution be made from this trust that would disqualify [Patricia] from receiving the benefits of public programs or that would reduce the level of such benefits. It is expressly provided that no payment should in any way jeopardize a Medicaid payment for care of any type including the care provided in a nursing home facility."

¶ 5 The Supplemental Trust was intended for Patricia to receive funds while retaining her eligibility for certain federal or state means-tested benefit programs. It was revocable by Harry during his lifetime and is irrevocable as to Patricia and her assigns. The Supplemental Trust will terminate upon Patricia's death.

¶ 6 On January 14, 2012, Harry died. Upon his death, Michael became the trustee of the Living Trust and the Supplemental Trust and the assets in the Living Trust were distributed to the Supplemental Trust. Also upon Harry's death, Michael became the executor of Harry's will.

¶ 7 On March 15, 2012, defendants filed Harry's will with the clerk of the circuit court of Lake County (case No. 12-W-312). No letters of office were issued, and Harry's will was not admitted to probate.

¶ 8 In late 2013, Patricia was admitted into a long-term-care facility in Wheeling. On July 22, 2014, an application for long-term-care benefits under the Aid to the Aged, Blind, or Disabled program ( 305 ILCS 5/3-1 et seq. (West 2012) ) was filed on Patricia's behalf, requesting that her benefits begin as of April 1, 2014.

¶ 9 On February 25, 2016, according to Michael, the Department of Human Services (DHS) issued a decision, finding that, as of April 1, 2014, the Supplemental Trust contained $238,437.67 to pay for Patricia's long-term care.¹ The DHS subtracted Patricia's asset allowance of $2000 from the $238,437.67 and imposed a spend-down of the remaining $236,437.67.

¶ 10 On May 4, 2016, an appeal was filed with the DHS on Patricia's behalf. On August 26, 2016, the DHS issued its final administrative decision (which was confirmed by an analyst recommendation on September 1, 2016, by the Department of Healthcare and Family Services), finding that, instead of requiring a spend-down, the assets held by Harry and transferred upon his death resulted in a penalty to Patricia, who "did not receive fair market value" for the assets.² The penalty was assessed at $234,561. Patricia's application for long-term-care benefits was approved subject to payment of the penalty from the funds in the Supplemental Trust.

¶ 11 On May 1, 2017, Michael, as trustee of the Supplemental Trust, sued defendants, alleging professional negligence. In a first amended complaint, he alleged that defendants breached the duties they owed to Harry during their attorney-client relationship, in that they created the Supplemental Trust through the Living Trust, failed to create the Supplemental Trust through Harry's will, failed to prepare the necessary estate-planning documents to maximize funds available for Patricia's care and maintenance, and failed to exercise reasonable and ordinary care and diligence in preparing Harry's and Patricia's estate plan. Michael claimed that, had defendants created the Supplemental Trust through the will, as opposed to the Living Trust, the transfer of the funds from the Living Trust to the Supplemental Trust upon Harry's death would have been exempt and no penalty would have been imposed. 42 U.S.C. §§ 1382b(e)(2)(A), 1396p(d)(2)(A)(ii) (2012) ; 89 Ill. Adm. Code § 120.347(c) (2013).

¶ 12 On October 5, 2017, defendants moved to dismiss Michael's complaint. 735 ILCS 5/2-619, 13-214.3(d) (West 2016). They argued that the claim was time-barred and that Patricia's disability had no bearing on the application of the statute of repose. Defendants' position was that the injury occurred upon Harry's death, in 2012, and that Michael's complaint, filed in 2017, was beyond the two-year repose period in section 13-214.3(d). They noted that the complaint alleged that the attorney-client relationship was between Harry and defendants. As to Patricia's condition, defendants argued that the tolling provisions of subsections (e) and (f) of section 13-214.3 did not apply, because she was a beneficiary of the Supplemental Trust and the provisions apply only to persons entitled to bring an action, which, here, was plaintiff as the trustee. 735 ILCS 5/13-214.3(e), (f) (West 2016). Further, subsection (f), by its own terms, did not toll or avoid the repose period in subsection (d).

¶ 13 On November 28, 2017, the trial court granted defendants' motion and dismissed Michael's complaint with prejudice.³ Michael appeals.

¶ 14 II. ANALYSIS

¶ 15 Michael argues that the trial court erred in dismissing his complaint as time-barred. For the following reasons, we disagree.

¶ 16 A motion to dismiss under section 2-619 admits the legal sufficiency of the complaint and raises defects, defenses, or other affirmative matters that appear on the face of the complaint or are established by external submissions that act to defeat the claim. Becker v. Zellner , 292 Ill. App. 3d 116, 122, 226 Ill.Dec. 175, 684 N.E.2d 1378 (1997). All pleadings and supporting documents are interpreted in the light most favorable to the nonmoving party. Wackrow v. Niemi , 231 Ill. 2d 418, 422, 326 Ill.Dec. 56, 899 N.E.2d 273 (2008). We review de novo a trial court's ruling on a section 2-619 motion to dismiss. Id.

¶ 17 To prevail on a legal-malpractice claim, a plaintiff must plead and prove that (1) the defendant attorneys owed the plaintiff a duty of due care arising from the attorney-client relationship, (2) the defendants breached that duty, and (3) as a direct and proximate result of that breach, the plaintiff suffered injury. Sexton v. Smith , 112 Ill. 2d 187, 193, 97 Ill.Dec. 411, 492 N.E.2d 1284 (1986).

¶ 18 Section 13-214.3 of the Code contains the limitations and repose periods for actions for legal malpractice. Addressing these concepts in a general sense, the supreme court has explained:

"In contrast to a statute of limitations, which determines the time within which a lawsuit may be brought after a cause of action has accrued, a statute of repose extinguishes the action after a defined period of time, regardless of when the action accrued. DeLuna v. Burciaga , 223 Ill. 2d 49, 61 [306 Ill.Dec. 136, 857 N.E.2d 229] (2006) (citing Ferguson v. McKenzie , 202 Ill. 2d 304, 311 [269 Ill.Dec. 188, 780 N.E.2d 660] (2001) ). It begins to run when a specific event occurs, ‘regardless of whether an action has accrued or whether any injury has resulted.’ Ferguson , 202 Ill. 2d at 311 [269 Ill.Dec. 188, 780 N.E.2d 660]. Thus, the statute of repose limit is ‘ "not related to the accrual of any cause of action; the injury need not have occurred, much less have been discovered." ’ CTS Corp. v. Waldburger , 573 U.S. 1, 8, 134 S.Ct. 2175, 2182-83 [189 L.Ed.2d 62] (2014) (quoting 54 C.J.S. Limitations of Actions § 7, at 24 (2010) ). The purpose of a repose period is to terminate the possibility of liability after a defined period of time. After the expiration of the repose period, there is no longer a recognized right of action. Evanston Insurance Co. v. Riseborough , 2014 IL 114271, ¶ 16 [378 Ill.Dec. 778, 5 N.E.3d 158]." Folta v. Ferro Engineering , 2015 IL 118070, ¶ 33, 397 Ill.Dec. 781, 43 N.E.3d 108.

¶ 19 Turning to the statutory framework at issue here, section 13-214.3 of the Code states, in relevant part:

"(b) An action for damages based on tort,

...