A pending state court lawsuit in Texas warrants attention. In Stewart v. Seyfarth Shaw LLP et al, the plaintiff bringing a legal malpractice claim against the law firm that unsuccessfully defended him in prior litigation has alleged that the defendant law firm violated the Texas Deceptive Trade Practices Act (DTPA) by misrepresenting their experience and qualifications to handle the case and omitting key facts (that the lawyers assigned to lead the defense “lacked any real trial experience”), omitting to disclose a conflict of interest that adversely affected the legal advice rendered to the plaintiff, omitting to disclose a settlement opportunity that would have been more advantageous than the later result, and omitting to disclose their specific knowledge that their client’s indemnitor had no intent of honoring the indemnity. These allegations in the Texas case could be made under the Uniform Deceptive Trade Practices Act (UDTPA) as enacted in Illinois and many other states.
Some quick research discloses that Texas DTPA claims have been alleged against Texas lawyers with some frequency, and UDTPA claims have been asserted against lawyers in some states other than Illinois, at least not in a reported decision. So, are UDTPA claims against lawyers coming to Illinois? The lure of recovering punitive damages and attorneys’ fees as a prevailing party provides the incentive for attempting to plead a UDTPA claim. But 735 ILCS 5/2-1115 protects legal (and medical) malpractice defendants in Illinois from punitive damages in malpractice cases. Would Section 2-1115 bar the recovery of punitive damages for a proven violation of the UDTPA by a lawyer overstating his or her qualifications, failing to disclose conflicts of interest, failing to communicate a settlement offer, or failing to disclose the lack of indemnity that the client was counting on, all for the purpose of persuading the client to allow the lawyers to try the case? Arguably Section 2-1115 would not provide a defense to lawyer defendants found liable under the UDPTA, as a UDPTA case is not a legal malpractice case. See Cripe v. Leiter, 291 Ill.App.3d 155, 158 (1997), which held that Section 2-1115 does not preclude the recovery of punitive damages against lawyers that commit fraud during an attorney/client relationship, such as intentional over-billing as occurred in Cripe. The difficulty has been in drawing the line between conduct rising to the level of fraud versus negligent conduct dressed up as fraud by adding an allegation of intent to the same conduct pled as negligence. See Kennedy v. Grimsley, 361 Ill. App. 3d 511, 514, 837 N.E.2d 131, 297 Ill. Dec. 351 (2005), where the court rejected the recovery of punitives for the lawyer/defendant’s failure to disclose his lack of knowledge and ability, holding these allegations constituted legal malpractice rather than fraud.
One prediction seems safe. The degree to which lawyers or doctors in Illinois can be subjected to liability for punitive damages and awards of attorneys’ fees under the UDTPA is likely to be tested sooner rather than later.