Accountant’s Assertion that Plaintiff “Potentially [had] A Real Problem” Amounts to Inquiry Notice

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In a nineteen-page opinion, the Illinois Appellate Court for the First District affirmed the dismissal of a legal malpractice case against the law firm of Michael Best & Friedrich, LLP as time barred.  The court stated that legal malpractice claims must be brought within the two-year statute of limitations period set forth in section 13-214.3(b) of the Illinois Code of Civil Procedure.  It added that this statute of limitations incorporates the “discovery rule,” and that discovery “may rest upon so-called inquiry notice.”  Carlson v. Michael Best & Friedrich LLP, 2021 IL App (1st) 191961, ¶ 81.  A party is on inquiry notice when s/he knows or reasonably should have known of an injury and that the injury was wrongfully caused.  Inquiry notice starts the statute of limitations clock.

In this case, the court held that the Plaintiff should have been aware that he was wrongfully injured when his accountant informed him that he “potentially [had] a real problem” regarding a proposed settlement agreement and further stated, “I don’t know what happened here… but you left 12 million on the table.  You should be able to go back and get it.”  Id. at ¶ 82.  The court rejected Plaintiff’s claim that he believed these statements were made in “jest” and were not reasonably calculated to put him on notice of a potential legal malpractice claim.  Id.  Instead, the court concluded that the statements put the Plaintiff on inquiry notice and he should have investigated his attorneys’ actions.

Carlson v. Michael Best & Friedrich LLP, 2021 IL App (1st) 191961

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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