Construction Systems, Inc. v. Fagelhaber, LLC
2015 IL App (1st) 141700
Ill. App. Ct.2015Background
- Construction Systems filed a mechanic’s lien on 6 North Michigan Ave. and hired FagelHaber to perfect it; lien was not properly served on Cosmopolitan and was subordinated to a mortgagee’s lien.
- A second tract index search revealed Cosmopolitan as an interested party after the lien was filed; FagelHaber failed to update the search in time.
- Construction Systems later sued FagelHaber for legal malpractice alleging failure to perfect the lien and cause damages.
- In November 2004, the parties executed a broad general release in a fee dispute; the release referenced only the Indebtedness and claimed to settle disputes arising from legal services.
- The trial court granted summary judgment to FagelHaber on the release, but the court also dismissed or未 addressed prejudgment interest and extra work issues; on appeal, the release was deemed not to bar the malpractice claim, prejudgment interest was found available, and extra-work recovery remained unresolved.
- The matter was remanded for further proceedings.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did the general release bar the malpractice claim? | CS contends the release only settled fee disputes and did not anticipate malpractice. | FagelHaber argues the release broadly barred all claims related to its representation. | Issues of fact on release scope; order reversed. |
| Is prejudgment interest recoverable in this legal malpractice action? | Interest is recoverable under the Illinois Mechanics Lien Act, not barred as in typical malpractice actions. | Prejudgment interest is not available in legal malpractice actions. | Prejudgment interest is recoverable as part of damages. |
| Did judicial estoppel warrant summary judgment for FagelHaber? | CS’s Pinnacle positions create inconsistency; estoppel should apply. | No clear inconsistent positions; estoppel not warranted. | Judicial estoppel did not apply. |
| Whether CS is entitled to partial summary judgment on extra work within the lien? | Owner-approved extras support recovery for extra work. | No written owner approval required to prove extras; issues of fact remain. | No partial summary judgment on extra work; genuine issues of material fact exist. |
Key Cases Cited
- Whitlock v. Farm Credit Bank of St. Louis, 144 Ill. 2d 440 (Ill. 1991) (releases construed narrowly; unknown claims not barred)
- Thornwood, Inc. v. Jenner & Block, 344 Ill. App. 3d 15 (Ill. App. 1st Dist. 2003) (fiduciary must disclose relevant information in releases)
- Rizzo v. Rizzo, 3 Ill. 2d 291 (Ill. 1954) (duty of full disclosure in fiduciary relations)
- Carlile v. Snap-on Tools, 271 Ill. App. 3d 833 (Ill. App. 2d Dist. 1995) (intent of release determined by surrounding circumstances)
- Doctor’s Associates, Inc. v. Duree, 319 Ill. App. 3d 1032 (Ill. App. 1st Dist. 2001) (contract interpretation of releases includes surrounding context)