Katz v. Hartz

2021 IL App (1st) 200331

195 N.E.3d 730

457 Ill.Dec. 594

P. Andre KATZ, Individually and as Limited Guardian for the Estate of Alyce K. Newman, Plaintiff-Appellant,

v.Michael HARTZ; Elizabeth Kreasy; and Katten Muchin Rosenman, LLP, Defendants-Appellees.

No. 1-20-0331

Appellate Court of Illinois, First District, SIXTH DIVISION.

Filed March 12, 2021

Michael Shiba, of Chicago, for appellant.

Timothy J. Patenode and Sarah M. Scruton, of Katten Muchin Rosenman LLP, of Chicago, for appellees.

PRESIDING JUSTICE MIKVA delivered the judgment of the court, with opinion.

¶ 1 In this appeal from the dismissal of claims against his mother's former lawyers, plaintiff P. Andre Katz (Andre) argues that the two-year period specified in the statute of limitations did not begin running until he had reason to believe that the lawyers were specific parties who had caused him injury. Andre maintains that, although he knew his brother Leonard Katz had caused their mother to change her estate plan to Andre's detriment, it was not until he deposed one of her lawyers that he discovered they had negligently failed to determine whether she had the requisite mental capacity to make those changes.

¶ 2 The attorneys, Michael Hartz, Elizabeth Kreasy, and their law firm, Katten Muchin Rosenman, LLP, in Chicago (collectively, Katten), argue that the limitations period began running at an earlier point—on the date Andre filed a petition to become his mother's temporary guardian. Andre knew at that time that Katten had represented his mother in connection with the changes to her estate plan and, Katten maintains, he was thus on inquiry notice to discover if the firm had some liability. The circuit court agreed with Katten that Andre's claims were time-barred and granted its motion to dismiss his complaint with prejudice pursuant to section 2-619 of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-619 (West 2018) ).

¶ 3 Andre argues that we should reverse the circuit court's dismissal of his claims because (1) the limitations period did not begin running until he learned during a deposition of the specific actions his mother's lawyers took or failed to take to verify that she had the requisite capacity to alter her estate plan and (2) the limitations period was tolled for claims Andre brought on his mother's behalf because she suffered from a disability.

¶ 4 For the following reasons, we reverse the judgment of the circuit court and remand for further proceedings consistent with this opinion.

¶ 5 I. BACKGROUND

¶ 6 In assessing the timeliness of Andre's complaint, we look to Andre's allegations, deposition testimony attached to and incorporated by reference into his complaint, and Andre's guardianship petition, which Katten attached to its motion to dismiss.

¶ 7 Andre alleged in his guardianship petition that his mother, Alyce K. Newman, lived with Andre's brother, Leonard, and provided Leonard with extensive financial support. Beginning in April 2016, Leonard began isolating Ms. Newman, who was, according to Andre's complaint in this matter, in the "early stages of dementia," and inserting himself into her personal and professional relationships. At the end of May 2017, Ms. Newman, accompanied by Leonard, made certain changes to her estate plan at Katten's Chicago offices that were to Andre's detriment and to Leonard's benefit. It is unclear from the record precisely when Andre learned of these changes, but he acknowledges that he was aware of them on June 9, 2017, when he filed his petition seeking appointment as Ms. Newman's temporary guardian, with the specific power to enjoin her from making any further changes to her estate plan.

¶ 8 In support of his guardianship petition, Andre alleged that he was already Ms. Newman's fiduciary (as he had long held a general power of attorney for her property and healthcare); that Leonard had a history of instability; and that Andre's access to Ms. Newman in the preceding six months had been "severely limited because of [Leonard's] physical, emotional, and mental control over [her]." Andre attached a number of documents in support of his claims that Leonard had pressured Ms. Newman to sign letters she did not understand and interfered with her relationships with her accountant, financial advisor, and legal counsel. Andre quoted extensively from the notes of a speech therapist who had treated Ms. Newman following a hip replacement in the fall of 2016. The therapist noted that at that time Ms. Newman "exhibit[ed] difficulty attending to tasks [and] comprehending conversation," demonstrated an "inability to reason [and] difficulty with recall of personal information," and had "difficulty expressing complex thoughts and ideas."

¶ 9 The probate court granted Andre's motion for temporary guardianship on the same day his petition was filed, and Andre promptly called Katten to inform Mr. Hartz of his appointment. Andre also e-mailed the appointment order to Mr. Hartz.

¶ 10 It was not until June 27, 2019, that Andre, "as limited guardian of the estate" of his mother, Ms. Newman, filed a three-count complaint against Katten, seeking to recover both the legal expenses that had been incurred in unwinding the changes that Katten had made to Ms. Newman's estate plan and the legal fees it had charged her for making those changes. Count I alleged legal malpractice, count III alleged unjust enrichment, and in count II, apparently on his own behalf, Andre alleged a claim for tortious interference with testamentary expectancy. Andre alleged that Katten assisted Ms. Newman in amending her estate plan, which was at that time less than a year old and that, "[h]ad [Katten] bothered to evaluate [Ms. Newman]’s capacity to modify her estate plan, they would have discovered she was in the early stages of dementia and was not capable of making these decisions on her own." Andre asserted that, "[u]pon discovering Leonard's scheme and [Katten]’s participation in these improper modifications to the estate plan," he sought appointment as her guardian and "incur[red] significant amounts of time and money" unwinding the estate changes.

¶ 11 Andre attached to his complaint a transcript of the November 16, 2017, deposition of Mr. Hartz taken in the guardianship action. Mr. Hartz testified that he was first contacted by Leonard calling on Ms. Newman's behalf. In addition to one or more telephone calls in which Leonard assured Mr. Hartz that Ms. Newman was "standing right here," Leonard also brought Ms. Newman to Katten's offices on two occasions in late May 2017. Mr. Hartz acknowledged that Katten usually only handles estates worth $75 million or more but explained that the firm was willing to assist Ms. Newman with her more modest holdings, so long as she was willing to pay the firm's rates.

¶ 12 Mr. Hartz mentioned to "Lenny" that he knew Andre, who is also a lawyer, professionally. Either Ms. Newman or Leonard (Mr. Hartz could not remember who) expressed concern that Mr. Hartz would report back to Andre the changes Ms. Newman was making to her estate. Mr. Hartz assured them that if he represented Ms. Newman, he would not disclose anything she did not want disclosed. Mr. Hartz was under the impression that Ms. Newman wanted to make these changes before she had an upcoming medical procedure or surgery and wanted to do it without Andre getting involved.

¶ 13 At their initial meeting, Ms. Newman met for some time with Mr. Hartz alone. He asked her why she had not gone back to the lawyer who drafted her estate plan several months before, and she said that, when she described the changes she wanted to make, that lawyer "got upset with her" and contacted Andre. Ms. Newman probably told Mr. Hartz more about the change and why it had upset the lawyer, but he could not remember the whole conversation. According to her, the change was something her former lawyer "didn't think was fair to do." She explained that she had signed off on some changes that the lawyer had prepared in October because they were better than nothing, but they were not what she fully wanted and that was why she was making another change so soon. Mr. Hartz did not know, however, whether the changes he and his firm made were the ones the previous lawyer had refused to make.

¶ 14 Mr. Hartz acknowledged that although he regularly practices in the area of estates and trusts, he has no standard practice for determining a client's mental capacity. He concluded that Ms. Newman had the requisite capacity because, in his words, "she exhibited knowledge of what [was] going on in the room, the general conversation, you know, what do you do, what kind of things do you like to do in life, and where do you go and about friends." Mr. Hartz said, "I asked. She answered. So I felt there was knowledge of her everyday existence. She told me about where her investments were and the approximate value. It's just the way she carried herself and talked about what she wanted to do with her estate." Ms. Newman revealed to Mr. Hartz her motivation for making the changes to her estate plan, explaining how much Leonard helped her and that, although she was proud of Andre for being so successful in his career, she felt he treated Leonard poorly and at times treated her poorly too.

¶ 15 One change that Ms. Newman and Leonard wanted made was the insertion of a provision stating that she could only be deemed incompetent upon the agreement of three doctors who had treated her. Mr. Hartz explained why this would be "awkward" and possibly difficult to implement. On his recommendation, a provision was instead included that Ms. Newman could only be deemed incompetent with the concurrence of a "physician of Leonard's choosing."

¶ 16 Mr. Hartz testified that he received a call from Andre on June 9, 2017. According to Mr. Hartz, Andre was "very professional about it." He understood that his mother had had estate planning done at Katten, and whether that was by Mr. Hartz or someone else in his group, he just wanted to let the firm...