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Can legal malpractice claims survive statute of repose? The role of fraudulent concealment and equitable estoppel

9/28/23

By: Donald Patrick Eckler and Adelaide Bell

In the recent case of Comprehensive Marketing, Inc. v. Huck Bouma P.C., and Mark Bishop, 2023 IL App (1st) 220694-U, the court examined allegations of legal malpractice and breach of contract, emphasizing the interplay among the statute of repose, fraudulent concealment, and equitable estoppel.   

Plaintiff Comprehensive Marketing, Inc. (CMI) retained defendants, Huck Bouma P.C. and Mark Bishop, seeking advice on compliance with the Telephone Consumer Protection Act of 1991 (TCPA) and specifically to advise on the language required for opt-out notices. In 2010, when a claim arose against CMI, defendants advised CMI to defend based on the notice’s legal compliance rather than settle, which CMI relied on. However, CMI alleged that the legal advice provided by Huck Bouma and Bishop was flawed and that the defendants knew the opt-out language was not compliant, intending to conceal this fact. Despite challenges in 2017 over the opt-out notice’s legality, CMI continued to rely on defendants’ counsel until at least August 29, 2018.   

CMI filed suit against its former counsel alleging legal malpractice and breach of contract. Defendants moved to dismiss the complaint, arguing that it was barred by both the statutes of limitations and repose. In response, the defendants moved to dismiss contending that plaintiff’s allegations lacked factual support and failed to sufficiently plead fraudulent concealment and equitable estoppel to avoid the statute of response. Defendants argued that the statute of repose had expired by the time CMI filed suit in 2019 because the alleged malpractice occurred in 2010 when they provided the initial advice on TCPA compliance. CMI, on the other hand, contended that the statute did not begin to run until 2017 when it first realized the consequences of the alleged malpractice.  

The circuit court dismissed the complaint based upon the six-year statute of repose. The circuit court did not address CMI’s arguments related to fraudulent concealment and equitable estoppel. The appellate court found that CMI had alleged sufficient facts to avoid application of the statute of repose based upon fraudulent concealment and equitable estoppel.  

Unlike statutes of limitations, statutes of repose establish an absolute deadline beyond which no claims can be pursued. In Illinois, Section 13-214.3 of the Illinois Code of Civil Procedure establishes a six-year statute of repose for legal malpractice claims.   

In an effort to avoid the statute of repose, CMI raised an alternative argument: the statute should be tolled due to the defendant’s fraudulent concealment of the plaintiff’s cause of action. This argument hinged on the principle set forth in Clay v. Kuhl, 189 Ill.2d 603, 613 (2000) that held that fraud can suspend the statute of repose if the plaintiff can plead that the fraud prevented the discovery of the cause of action. Mere silence does not ordinarily constitute fraudulent concealment, but a plaintiff may proceed on a claim when an attorney fails to fulfill his duty to disclose material facts concerning the existence of a cause of action.    

Despite the finding that the statute of repose began to run in 2010, citing Jackson Jordan, Inc. v. Leydig, Voit & Mayer, 158 Ill.2d 240 (1994), the appellate court held that CMI pled sufficient facts to go forward on a claim that fraudulent concealment and equitable estoppel tolled the statute of repose. Just as in Jackson Jordan, where the plaintiff had relied on the advice of their attorneys, CMI alleged that it was misled or provided with inaccurate information by the defendants. Specifically, that defendants encouraged CMI to not settle the 2010 claim, encouraged CMI to defend the 2017 lawsuits, provided false representations regarding compliance issues, failed to correct their mistakes to ensure CMI was counseled on compliant TCPA opt-out language, and caused CMI to believe it had no reason to take action against defendants based on their failure to take such measures.  

This case emphasizes the importance of understanding statutes of repose for attorneys to navigate when legal malpractice claims can be pursued and when the statute of repose may be tolled.  

For more information, please contact Donald Patrick Eckler at patrick.eckler@fmglaw.com or your local FMG attorney.