Preferred Pers. Serv. V. Meltzer, Purtill

• Decision Date: 23 January 2009
• Docket Number: No. 1-08-0389.,1-08-0389.
• Citation: 902 N.E.2d 146,387 Ill. App. 3d 933
• Parties: PREFERRED PERSONNEL SERVICES, INC., Plaintiff-Appellee, v. MELTZER, PURTILL AND STELLE, LLC, and Thomas R. Palmer, Defendants-Appellants, (Arthur J. Gallagher and Company, Inc., Defendant).
• Court: United States Appellate Court of Illinois

902 N.E.2d 146

387 Ill. App. 3d 933

PREFERRED PERSONNEL SERVICES, INC., Plaintiff-Appellee, v. MELTZER, PURTILL AND STELLE, LLC, and Thomas R. Palmer, Defendants-Appellants (Arthur J. Gallagher and Company, Inc., Defendant).

No. 1-08-0389.

Appellate Court of Illinois, First District, Fifth Division.

January 23, 2009.

Rehearing Denied February 20, 2009.

Daniel F. Konicek, Michael P. Hannigan, Konicek & Dillon, P.C., Geneva, IL, J. Timothy Eaton, Patricia S. Spratt, Shefsky & Froelich Ltd., Chicago, IL, for Defendants-Appellants.

Donald G. Peterson, John K. Hughes, Hughes Socol Piers Resnick & Dym, Ltd., Chicago, IL, for Plaintiff-Appellee.

Justice TOOMIN delivered the opinion of the court:

This matter is before us on interlocutory appeal pursuant to the provisions of Supreme Court Rule 308 (155 Ill.2d R. 308) to consider three questions certified by the trial court. Plaintiff, Preferred Personnel Services, Inc. (Preferred), brought the instant action against Arthur J. Gallagher and Company (the Company) for failure to obtain workers' compensation insurance, and against Meltzer, Purtill and Stelle, LLC, and Thomas Palmer (malpractice defendants) for failure to timely commence proceedings on behalf of Preferred against Gallagher. Gallagher filed a motion to dismiss asserting that the complaint was time-barred under the statute of limitations. The claims against Gallagher were dismissed and affirmed on appeal. However, Meltzer and Palmer did not join in the issue below and were not parties to the appeal. Preferred now seeks to collaterally estop or apply the doctrine of the law of the case against Meltzer and Palmer to bar them from litigating the bar of limitations. In turn, the trial court certified the following questions for our review:

"1. Did the Legal Malpractice Defendants in this action have standing to oppose the Company's Motion to Dismiss where the Legal Malpractice Defendants' motion based on prematurity was pending?

2. Are the Legal Malpractice Defendants in this action collaterally estopped from raising an issue that was decided in favor of the defendant Company where the Legal Malpractice Defendants' motion based on prematurity was pending and notwithstanding facts which might have changed the outcome?

3. Did the ruling on the statute of limitations when it was decided in favor of a separate defendant become the `law of the case' as it relates to the claims against the Legal Malpractice Defendants and notwithstanding facts which might have changed the outcome?"

We answer all three certified questions in the negative.

BACKGROUND

Preferred is a temporary staffing agency that employed and leased truck drivers. The states in which Preferred operated uniformly required it to provide workers' compensation insurance coverage for its employees. Defendant Gallagher, an insurance broker, was hired by Preferred to secure such insurance beginning in 1995. Upon the expiration of the July 2000 policy, Gallagher represented to Preferred that it had obtained coverage and accepted payment for its services. However, in September 2001, Preferred began receiving letters from the carriers recommended by Gallagher, to which it had paid premiums, regarding defective binders and other errors, and eventually discovered that there was no coverage in place. Preferred paid medical expenses for several workers' compensation claims and, at Gallagher's direction, also paid several hundred thousand dollars to the companies for nonexistent coverage. Additionally, due to the gap in coverage, Preferred was required to pay substantially higher premiums such that it was forced to cease operations. In January 2002, Preferred retained defendant law firm Meltzer, Purtill & Stelle, LLC (Meltzer), to file a lawsuit against Gallagher. Meltzer drafted a complaint, but never commenced the proceedings, and thereafter failed to respond to inquiries about the status of the case. In turn, Preferred retained new counsel and on April 26, 2004, filed the instant action against Gallagher and Meltzer and Palmer.

The first four counts of the complaint were against defendants Meltzer and attorney Palmer stemming from their failure to timely file suit against Gallagher, and the remaining counts were against Gallagher for breach of contract, negligence, and fraud. In its complaint, Preferred conceded that its causes of action against Gallagher accrued by the end of November of 2001, and that the claims therefore were time-barred. Gallagher filed a motion to dismiss based on the statute of limitations. In response, Preferred moved to stay, ostensibly to learn of a basis for opposing dismissal in Meltzer and Palmer's discovery responses.

During the pendency of Gallagher's motion to dismiss, Meltzer and Palmer also filed a motion to dismiss, based on the principle that malpractice claims are premature while the underlying claim providing potential liability or an appeal from that claim remains viable. The trial court granted Gallagher's motion to dismiss, but later denied Meltzer and Palmer's motion.

Preferred appealed the dismissal of the claims against Gallagher. On appeal, we affirmed the dismissal, as Preferred was bound by its attorneys' inaction and it did not identify any legal basis that would justify granting relief from the limitations bar. See Preferred Personnel Services, Inc. v. Arthur J. Gallagher & Co., No. 1-05-1855 (September 29, 2006) (unpublished order pursuant to Supreme Court Rule 23). On remand, Preferred filed a motion for partial summary judgment as to Meltzer and Palmer, seeking to foreclose them from arguing that the statute had not run on Preferred's claims against Gallagher. In turn, the trial court granted the motion and also entered a finding under Supreme Court Rule 308, certifying the questions for immediate appeal and review by this court.

ANALYSIS

Supreme Court Rule 308 provides a remedy of permissive appeal for interlocutory orders where the trial court has deemed that they involve a question of law as to which there is substantial ground for difference of opinion and where an immediate appeal from the order may materially advance the ultimate termination of the litigation. 155 Ill.2d R. 308. We apply a de novo standard of review to legal questions presented in an interlocutory appeal brought pursuant to Supreme Court Rule 308(a). Anthony v. City of Chicago, 382 Ill.App.3d 983, 987, 321 Ill.Dec. 202, 888 N.E.2d 721, 725 (2008).

In addition to the three certified questions we are asked to review, Meltzer and Palmer urge us to reverse the grant of partial summary judgment in favor of Preferred. However, our review is strictly limited to the certified questions presented; we do not render any opinion on the propriety of any underlying rulings of the trial court. Anthony, 382 Ill.App.3d at 987, 321 Ill.Dec. 202, 888 N.E.2d at 725. Consequently, we proceed to analyze and answer only the certified questions, each in turn.

Standing

We note, as did the trial court, that the instant case is in an unusual posture, in that the malpractice defendants Palmer and Meltzer were joined in the same underlying litigation against Gallagher in which Preferred sought to establish the harm it suffered as a result of its attorneys' deficient representation. Preferred asserts that joinder of the malpractice defendants was permissible as pleading in the alternative. Because the malpractice defendants were parties to the litigation, Preferred posits they had standing to present argument on the statute of limitations issue as it related to the claims against Gallagher, and they should now be foreclosed from litigating the issue. Conversely, the malpractice defendants contend that they did not have standing to present such argument where they were improperly joined in a multifarious pleading because the litigation against Gallagher was separate and distinct from the malpractice claims. They likewise assert that the malpractice action was premature because Gallagher had not as yet sustained any adverse ruling.

Preferred acknowledges that it can find no case where the underlying action and legal malpractice case were joined in one lawsuit. Nevertheless, Preferred reasons that Meltzer and Palmer were proper defendants because the Illinois Code of Civil Procedure allows joinder of multiple defendants. 735 ILCS 5/2-614 (West 2000). However, Preferred's position tacitly overlooks the abiding principle that a cause of action against multiple defendants must arise from the same transaction or series of transactions in order to permit joinder of the defendants. Jaffke v. Anderson, 162 Ill.App.3d 290, 294, 113 Ill.Dec. 536, 515 N.E.2d 345, 348 (1987), appeal denied, 118 Ill.2d 545, 117 Ill.Dec. 225, 520 N.E.2d 386 (1988). "Multifariousness is found where distinct and independent matters are joined which require separate briefs and defenses, and the joinder of separate claims against two or more defendants." Jaffke, 162 Ill.App.3d at 293, 113 Ill.Dec. 536, 515 N.E.2d at 348.

Here, we find merit in the malpractice defendants' argument that they were inappropriately joined in the underlying case, thereby rendering Preferred's complaint multifarious. Meltzer and Palmer further discern that Preferred's motive for joinder and affirmatively pleading the bar of limitations in their case against Gallagher was to use the ruling offensively against them in the malpractice action. This conclusion is claimed to find support in Preferred's stated reasons for their appeal in the Gallagher litigation: "to foreclose Meltzer-Palmer from arguing that Preferred prematurely abandoned a viable claim against Gallagher." Preferred Personnel Services, Inc. v. Arthur J. Gallagher & Co., No. 1-05-1855, slip op. at 4 (September 29, 2006) (unpublished order pursuant to Supreme Court Rule 23).

Given the unusual posture of the case, although they are defendants, Meltzer and Palmer are asserting their own lack of standing to have joined in the argument on the...