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Docket Number

No. 85-0064

Attorney(S)

John A. O'Malley, of O'Malley O'Malley, Ltd., of Chicago, for appellants. Hinshaw, Culbertson, Moelmann, Hoban Fuller, of Chicago (D. Kendall Griffith, George W. Spellmire, Jr., Thomas P. McGarry, and Joshua G. Vincent, of counsel), for appellees.

Judges

JUSTICE JIGANTI delivered the opinion of the court:

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Smart Summary

Case Summary: Gelsomino v. Gorov, No. 85-0064 (Ill. App. Ct. 1986)

Factual and Procedural Background

The Riverside Restaurant, owned by Michael and Loretta Gelsomino and Milor, Inc., was destroyed by fire in April 1974. The Gelsominos' fire-loss claim to their carrier, Charter Oak Insurance Company, Inc., was denied. They filed a breach of contract action in the U.S. District Court for the Northern District of Illinois, initially represented by Michael B. Nash and his firm. Trial was scheduled for early September 1979. After scheduling disputes and a denied continuance request by Nash, the Gelsominos retained substitute trial counsel Arthur M. Gorov and the firm Berkson, Gorov Levin, Ltd. The federal jury returned a verdict for Charter Oak, specifically finding the plaintiffs guilty of arson and fraud; the Seventh Circuit affirmed. The Gelsominos then sued for legal malpractice in Cook County against Gorov and his firm (and against Nash and his firm, the latter not part of this appeal). Defendants moved for summary judgment; the trial court granted it. Plaintiffs filed a motion for reconsideration accompanied by additional memoranda and numerous affidavits (including two malpractice expert affidavits); the trial court denied reconsideration. The plaintiffs appealed the grant of summary judgment.

Legal Issues Presented

Whether the doctrine of collateral estoppel (estoppel by verdict) barred the plaintiffs from litigating the adequacy of their trial representation in the subsequent malpractice action.
Whether the defendants' alleged errors and omissions constituted a breach of the duty of care owed by counsel (i.e., negligence rather than protected matters of professional judgment).
Whether the plaintiffs established proximate causation — that the alleged breaches proximately caused the adverse jury verdict in the underlying action.

Arguments of the Parties

Appellants' (Plaintiffs') Arguments

The defendants negligently failed to investigate, prepare, and present their claim, including failing to interview, prepare, and present testimony of witnesses who could explain sales-tax discrepancies and rebut circumstantial evidence of arson.
Affidavits (including two legal-malpractice expert affidavits) and other evidence available before trial show there were witnesses and explanations the defendants failed to utilize; those omissions proximately caused the adverse verdict.
The additional affidavits and memoranda submitted on reconsideration should be considered and show disputed issues of fact precluding summary judgment.

Appellees' (Defendants') Arguments

The alleged errors and omissions were matters of professional judgment or tactical decisions, not actionable negligence.
The plaintiffs did not demonstrate that any alleged errors were the proximate cause of the adverse jury verdict.
The plaintiffs are collaterally estopped from relitigating the adequacy of representation because of the district court's denial of their post-trial motion in the underlying action.
The affidavits and materials submitted with the motion for reconsideration were untimely and should not be considered.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Schierer v. Sears Roebuck Co. (1980), 81 Ill. App.3d 90, 95, 400 N.E.2d 1072	Trial court's discretion to allow affidavits first presented on a motion to vacate a summary judgment.	The court applied this principle to conclude the trial court did not abuse its discretion in considering the plaintiffs' additional affidavits because defendants were not prejudiced and had opportunity to respond.
Lange v. Coca-Cola Bottling Co. of Chicago, Inc. (1969), 44 Ill.2d 73, 75, 254 N.E.2d 467	Estoppel by verdict (collateral estoppel) precludes relitigation of facts litigated in a prior action.	Used to state the general rule that collateral estoppel prevents parties and their privies from relitigating facts determined previously.
Oberman v. Byrne (1983), 112 Ill. App.3d 155, 160, 445 N.E.2d 374	Facts sought to be relitigated must have been specifically litigated and necessarily decided.	Applied to analyze whether the district court's denial of the post-trial motion amounted to a specific determination of the adequacy of representation (court found it did not).
People ex rel. Chicago Eastern Illinois R.R. Co. v. Fleming (1969), 42 Ill.2d 231, 235, 246 N.E.2d 275	For estoppel: matter of fact must conclusively appear to have been necessarily determined by the prior court.	Cited to emphasize the certainty required to invoke collateral estoppel; court found that certainty lacking here.
Fred Olson Motor Service v. Container Corp. (1980), 81 Ill. App.3d 825, 829, 401 N.E.2d 1098	Support for the requirement that a fact be specifically litigated and necessarily decided for estoppel to apply.	Referenced as part of the collateral-estoppel standard; court concluded the district court ruling did not meet that standard.
Bartholomew v. Crockett (1985), 131 Ill. App.3d 456, 465, 475 N.E.2d 1035	Elements of an attorney-malpractice action: attorney-client relationship, duty, breach, causation, and actual damages.	Used to state the elements; court noted duty and damages were undisputed, leaving breach and proximate cause as issues on appeal.
Woodruff v. Tomlin (6th Cir. 1980), 616 F.2d 924	Professional judgment/tactical decisions are generally not basis for liability, but an attorney remains bound to exercise reasonable skill and care.	Cited by defendants to support that tactical choices are nonactionable; the court nonetheless recognized that such choices are subject to the reasonableness standard and may present questions of fact.
Oda v. Highway Insurance Co. (1963), 44 Ill. App.2d 235, 194 N.E.2d 489	Authority for the proposition that decisions based on professional judgment cannot be the basis of liability.	Noted as supporting defendants' contention regarding professional-judgment protection; court explained such characterization does not end the inquiry.
Stevens v. Dexter (1870), 55 Ill. 151, 153	An attorney is not liable for every mistake; liability attaches when attorney fails to exercise reasonable care and professional skill.	Applied to frame the standard for malpractice liability: negligence measured by reasonable degree of care and skill.
House v. Maddox (1977), 46 Ill. App.3d 68, 71, 360 N.E.2d 580	Same principle: attorney liable only where failing to exercise reasonable care and skill.	Reinforced the standard that liability requires failure to meet reasonable professional standards.
People v. Wright (1986), 111 Ill.2d 18, 488 N.E.2d 973	Example of a tactical decision (whether a defendant should testify in a criminal case).	Used as an illustrative example that some decisions are tactical, though not dispositive of malpractice questions.
Spivack, Shulman Goldman v. Foremost Liquor Store, Inc. (1984), 124 Ill. App.3d 676, 683, 465 N.E.2d 500	Attorney judgment is not automatically protected; whether reasonable care was exercised is a question of fact normally requiring expert testimony.	Applied to conclude that breach-of-duty questions are typically factual and require expert proof; supports reversal of summary judgment as to breach.
Pioneer Bank Trust Co. v. Mitchell (1984), 126 Ill. App.3d 870, 876, 467 N.E.2d 1011	Support for the proposition that summary judgment is inappropriate where a genuine question of fact exists.	Relied upon in concluding the plaintiffs' expert affidavits created factual disputes precluding summary judgment on breach.
Ney v. Yellow Cab Co. (1954), 2 Ill.2d 74, 117 N.E.2d 74	Proximate causation is generally a question for the jury.	Applied to hold that proximate cause raises an issue of fact except where reasonable persons cannot disagree; court found a factual dispute here.

Court's Reasoning and Analysis

The court's analysis proceeded in distinct steps:

Timeliness of supplemental materials — The court acknowledged that the plaintiffs' additional memoranda and affidavits filed with their motion for reconsideration should have been filed earlier, but applying Schierer it concluded the trial court did not abuse its discretion in considering them because the defendants were not prejudiced and had opportunity to respond.
Collateral estoppel — The court reviewed the requirements for estoppel by verdict (citing Lange, Oberman, Fleming, and Fred Olson) and determined that the district court's denial of the plaintiffs' post-trial motion in the underlying action did not necessarily and specifically decide the issue of the adequacy of plaintiffs' trial representation. The post-trial motion only raised whether the district court erred in denying a continuance; it did not request a specific ruling on counsel's negligence. Therefore the requisite certainty to invoke collateral estoppel was lacking, and the plaintiffs were not barred from bringing the malpractice claim.
Breach of duty — The court stated the elements of malpractice (Bartholomew) and noted duty and damages were undisputed. It focused on whether defendants breached the standard of care. While acknowledging that some choices are matters of professional judgment or tactical decisions (citing Woodruff and Oda), the court emphasized that such characterization does not end the inquiry; the ultimate question is whether the attorney exercised a reasonable degree of care and skill (Stevens, House) — a factual question generally requiring expert testimony (Spivack). The plaintiffs submitted affidavits from two legal-malpractice experts opining that Gorov's conduct fell below the standard, identifying at least six witnesses whose favorable testimony should have been investigated and presented. Because defendants offered no evidence to rebut those expert opinions, the court found a genuine factual dispute precluding summary judgment as to breach.
Proximate cause — The court observed that proximate causation is typically a jury question (Ney) unless reasonable minds could not differ. The plaintiffs proffered affidavits, a deposition, and other statements indicating evidence that could have been presented to counter the arson and fraud findings and to explain sales-tax discrepancies; additionally, the Seventh Circuit had noted plaintiffs' failure to explain such discrepancies on appeal from the underlying case. Considering the proffered materials and that appellate statement, the court concluded an issue of fact remained as to proximate cause, so summary judgment on that ground was also improper.

Holding and Implications

Holding: Reversed and remanded.

Implications: The appellate court concluded the trial court erred in granting summary judgment for the defendants both on the issues of breach of duty and proximate cause. The case was remanded for further proceedings consistent with the opinion (i.e., the malpractice claims may be litigated on the merits). The opinion does not announce a broader rule beyond applying established principles for collateral estoppel, the standard for attorney malpractice (reasonable care and skill), and the treatment of proximate cause as a factual issue for trial.

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MICHAEL GELSOMINO et al., Plaintiffs-Appellants, v. ARTHUR M. GOROV et al., Defendants-Appellees (Michael B. Nash et al., Defendants).

JUSTICE JIGANTI delivered the opinion of the court:

The plaintiffs, Michael and Loretta Gelsomino and Mi-lor, Inc. (Gelsominos), brought this professional malpractice action against attorney Arthur M. Gorov and the law firm of Berkson, Gorov Levin, Ltd. (Gorov). The complaint alleged that Gorov was negligent in the investigation, preparation and presentation of the plaintiffs' lawsuit against their insurance carrier, Charter Oak Insurance Company, Inc. The defendants moved for summary judgment and the trial court granted this motion. The plaintiffs now appeal.

The Riverside Restaurant owed by the Gelsominos was destroyed by fire in April of 1974. The fire-loss claim filed by the Gelsominos with Charter Oak was denied. Thereafter, the Gelsominos filed a breach of contract action in the Federal District Court for the Northern District of Illinois against Charter Oak. In this suit the plaintiffs were represented by Michael B. Nash and the law firm of Burke, Nash Shea, Ltd.

The jury trial was scheduled to begin on September 4, 1979, before Judge Leighton. However, on August 31, 1979, an attorney for Charter Oak sought a continuance based upon the fact that trial counsel, Ronald Lev, was not scheduled to return from Israel until September 17, 1979. Judge Leighton ordered Charter Oak to have Lev return immediately. Lev appeared ready for trial on September 7, 1979, at which time the trial was set for September 12, 1979. On September 11, 1979, plaintiffs' counsel, Michael Nash, appeared before the court and requested a continuance based upon the fact that he was about to commence another trial before Judge Marshall. Judge Leighton denied the request and stated that the action would be dismissed for want of prosecution if it did not begin on schedule. Consequently, that same day, the plaintiffs retained as substitute counsel for the trial Arthur M. Gorov and the law firm of Berkson, Gorov Levin.

After a jury trial, the jury found in favor of Charter Oak and specifically found that the plaintiffs were guilty of arson and fraud in submitting false and exaggerated sales tax figures. The United States Court of Appeals for the Seventh Circuit affirmed. The plaintiffs subsequently brought this professional malpractice action in the circuit court of Cook County against Gorov and the law firm of Berkson, Gorov Levin, Ltd., in addition to the plaintiffs' initial counsel, Nash and the law firm of Burke, Nash Shea, Ltd. The defendants Nash and his firm are not part of this appeal.

In this action the plaintiffs allege that the defendants negligently failed to investigate, prepare and present their claim. Specifically, the plaintiffs contend that the defendants erred in failing to interview, prepare and present the testimony of certain witnesses to explain the discrepancies in the sales tax figures and to controvert the circumstantial evidence of arson. The defendants filed a motion for summary judgment. In this motion the defendants alleged that the errors and omissions charged in the complaint were errors of judgment rather than errors of negligence and therefore were not actionable; that the plaintiffs did not show that the errors were the proximate cause of the adverse jury verdict; and that the plaintiffs were collaterally estopped from raising the issue of adequacy of representation. The trial court granted the defendants' motion. The plaintiffs filed a motion for reconsideration along with additional memoranda and numerous affidavits including the affidavits of two experts in the field of legal malpractice. After reviewing the additional materials filed, the trial court denied the motion and affirmed its prior decision. The plaintiffs now appeal.

• 1 Preliminarily, the defendants claim that the additional memoranda and affidavits filed by the plaintiffs with their motion for reconsideration were untimely and therefore should not be considered by this court. Generally, the decision of whether to allow a party to present affidavits for the first time on a motion to vacate a summary judgment is within the discretion of the trial court. ( Schierer v. Sears Roebuck Co. (1980), 81 Ill. App.3d 90, 95, 400 N.E.2d 1072.) In this case the defendants were not prejudiced by the inclusion of the additional affidavits. There was ample opportunity for the defendants to respond to any new matters set forth in those materials in writing and orally at the hearing. Thus, although we agree that this information should have originally been filed in response to the defendants' motion for summary judgment, the trial court did not abuse its discretion in considering these additional materials.

The first substantive issue we will address is whether the doctrine of collateral estoppel is a bar to litigating the question of legal malpractice. In the underlying action, the plaintiffs filed a post-trial motion asserting that the district court erred in denying their request for a continuance and that as a result of the court's denial plaintiffs' counsel, Nash, was ill-prepared. The district court denied the post-trial motion. In the instant malpractice action, the defendants contend that the doctrine of collateral estoppel bars the plaintiffs from bringing this action because the denial of the plaintiffs' post-trial motion in the underlying action effectively decided the issue of adequacy of representation.

• 2, 3 Estoppel by verdict or collateral estoppel precludes parties and their privies from relitigating facts in one action that were litigated in a prior action. ( Lange v. Coca-Cola Bottling Co. of Chicago, Inc. (1969), 44 Ill.2d 73, 75, 254 N.E.2d 467.) In order to operate as an estoppel, the facts sought to be relitigated must have been specifically litigated and necessarily decided. ( Oberman v. Byrne (1983), 112 Ill. App.3d 155, 160, 445 N.E.2d 374.) There must have been a decision with respect to a specific fact in the prior judgment that was material and controlling in that case and also material and controlling in the pending case. "It must also conclusively appear that the matter of fact was so in issue that it was necessarily determined by the court rendering the judgment interposed as a bar by reason of such estoppel." People ex rel. Chicago Eastern Illinois R.R. Co. v. Fleming (1969), 42 Ill.2d 231, 235, 246 N.E.2d 275; Fred Olson Motor Service v. Container Corp. (1980), 81 Ill. App.3d 825, 829, 401 N.E.2d 1098.

• 4 Applying these principles to the instant case, we believe that the district court's ruling on the post-trial motion lacks the certainty necessary to invoke the doctrine of collateral estoppel. The plaintiffs' motion raised the issue of whether the district court erred in not continuing the case. The motion did not, as defendants state, seek a determination as to whether the defendants were negligent in their handling of the case. Accordingly, in denying that motion, the district court did not specifically rule on the alleged errors and omissions now being raised by plaintiffs in this action. Consequently, the plaintiffs are not barred from bringing this legal malpractice action. Having decided that the plaintiffs are not estopped from asserting this claim, the question before this court is whether the trial court properly entered summary judgment in favor of the defendants.

• 5 In a cause of action for professional malpractice, the plaintiff must prove the existence of an attorney-client relationship, a duty arising out of that relationship, a breach, causation and actual damages. ( Bartholomew v. Crockett (1985), 131 Ill. App.3d 456, 465, 475 N.E.2d 1035.) There is no issue as to whether a duty arose out of the attorney-client relationship between the Gelsominos and the defendant Gorov, or that the Gelsominos suffered damage by the adverse jury verdict. The issues remaining to be decided in this appeal are whether the defendants' conduct breached the duty of care owing to the plaintiffs and whether the alleged errors and omissions were the proximate cause of the adverse jury verdict in the underlying action.

The plaintiffs allege that the defendants breached their duty by failing to properly investigate and prepare the plaintiffs' claim, in addition to failing to introduce certain evidence in support of that claim. The defendants counter that the alleged errors and omissions were matters of professional judgment rather than errors of negligence and therefore were not actionable. The defendants cite Woodruff v. Tomlin (6th Cir. 1980), 616 F.2d 924, and Oda v. Highway Insurance Co. (1963), 44 Ill. App.2d 235, 194 N.E.2d 489, in support of the proposition that decisions based upon professional judgment cannot be the basis of liability.

• 6, 7 Generally an attorney cannot be held liable for every mistake in the practice of law. Liability attaches only when that attorney fails to exercise a reasonable degree of care and professional skill. ( Stevens v. Dexter (1870), 55 Ill. 151, 153; House v. Maddox (1977), 46 Ill. App.3d 68, 71, 360 N.E.2d 580.) An attorney's judgment in the preparation and handling of a case is not, however, always and automatically protected under the rubrics of "matters of professional judgment" or "tactical decisions." Certainly an attorney uses professional judgment and makes tactical decisions, for example, in determining whether the defendant should testify in a criminal case. (See, e.g., People v. Wright (1986), 111 Ill.2d 18, 488 N.E.2d 973.) Nevertheless, there may be cases where the combined wisdom of the bar is that a reasonably competent attorney would not permit his client to testify. Thus, merely characterizing an act or omission as a matter of judgment does not end the inquiry. The issue remains as to whether the attorney has exercised a reasonable degree of care or skill in representing his client. This is a question of fact to be determined through expert testimony and usually cannot be decided as a matter of law. Spivack, Shulman Goldman v. Foremost Liquor Store, Inc. (1984), 124 Ill. App.3d 676, 683, 465 N.E.2d 500; see also Woodruff v. Tomlin (6th Cir. 1980), 616 F.2d 924, 930 (an attorney is not liable for choice of trial tactics based on professional judgment; however, he is still bound to exercise a reasonable degree of skill and care in his professional dealings).

• 8 In this case, with regard to the issue of breach of duty, the plaintiffs submitted the affidavits of two legal malpractice experts. It was the opinion of these experts that the defendants' conduct did, in fact, fall below the appropriate standard of conduct. Specifically, the experts pointed to the favorable testimony of at least six persons which, in the experts' opinions, should have been investigated and presented. Defendants have offered no evidence to discredit these experts nor have they provided any reason why this court should not accept the experts' opinions on this question. Thus, we believe these affidavits are sufficient to demonstrate the existence of a question of fact as to breach of duty. Accordingly, although we express no opinion as to whether Gorov breached a duty owing to the plaintiffs, we believe that summary judgment was inappropriate on this issue because it cannot be said as a matter of law that the movant was entitled to judgment. See Pioneer Bank Trust Co. v. Mitchell (1984), 126 Ill. App.3d 870, 876, 467 N.E.2d 1011.

• 9, 10 The trial court also granted summary judgment on the basis that there was no material issue of fact as to the issue of proximate cause. The jury in the underlying action found that the plaintiffs, through their representatives, participated in the arson which destroyed the restaurant and the the plaintiffs were guilty of fraud in submitting false and exaggerated claim figures. The plaintiffs argue that but for the alleged errors and omissions, the circumstantial evidence supporting the arson verdict could have been negated and the charge of fraud explained. Also, the plaintiffs point to testimony which could have been elicited at trial from various people which would have rebutted the evidence of motive necessary for the arson charge. In addition, plaintiffs point to testimony which the defendants failed to bring forth which would have reasonably explained the discrepancies in the sales tax figures.

Specifically, the plaintiffs submitted the affidavits of Louis Ritter, an insurance adjuster, Michael and Loretta Gelsomino, Frank Callero, a certified public accountant, and Clara Weiss, a former employee of the Riverside Restaurant. These affidavits apparently recite facts, circumstances and testimony not presented at trial and also attest to the alleged lack of investigation by the defendant Gorov. In addition, the plaintiffs filed the deposition of Allen Hertz, statements from Thomas Cernock and Ronald Radar and the affidavit of Michael Gelsomino, all of which were available before trial. The failure to utilize this evidence at trial, the plaintiffs argue, was the proximate cause of the adverse jury verdict.

Generally, the issue of proximate causation raises an issue of fact, except where reasonable men cannot disagree. ( Ney v. Yellow Cab Co. (1954), 2 Ill.2d 74, 117 N.E.2d 74 (proximate cause is a question for the jury); R. Mallen V. Levit, Legal Malpractice sec. 659, at 824 (2d ed. 1981).) As delineated above, in this case the plaintiffs presented numerous examples of evidence that allegedly could have been presented at trial. Moreover, on appeal to the United States Court of Appeals for the Seventh Circuit, that court specifically noted the "failure by the plaintiffs to explain that discrepancy" in the sales tax figures which the plaintiffs now allege that the defendants could have explained at trial. Taken together, we believe that the proffered testimony by the plaintiffs in addition to the statement of the court of appeals, indicate that an issue of fact as to proximate cause remains. Consequently, the trial court erred in granting summary judgment on this basis.

For the reasons stated above, the decision of the trial court is reversed and the matter is remanded for proceedings consistent with this opinion.

Reversed and remanded.

LINN, P.J., and JOHNSON, J., concur.

GELSOMINO v. GOROV