Shrock v. Ungaretti & Harris Ltd., 2019 IL App (1st) 181698

Background

BSM (manager-managed LLC) was controlled by manager Robert Meier, who owned 87.5%; Shrock owned 12.5%.
In May 2010 the state court entered an injunction prohibiting Meier from further "profit sharing" payments to himself and family and capped certain salaries; Shrock repeatedly alleged post‑injunction transfers to Meier and his family.
From 2010–2014 Meier (through Ungaretti lawyers Ruskusky and Miller) repeatedly denied violations, characterized transfers as "accruals," then as "bonuses," and submitted affidavits; Shrock filed motions accusing Meier and his counsel of evading the injunction.
A jury found Meier liable in March 2014; Meier filed bankruptcy on March 20, 2014; in bankruptcy proceedings Meier admitted the transfers in his November 7, 2014 answer and plaintiffs objected to Ungaretti’s fee claim alleging conspiracy to evade the injunction.
Shrock and BSM sued Ungaretti, Nixon Peabody, Ruskusky, and Miller on November 18, 2016. The trial court dismissed the complaint with prejudice as time‑barred under the two‑year limitations period in 735 ILCS 5/13‑214.3(b). BSM argued adverse‑domination tolling; the court rejected that defense.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Scope of 735 ILCS 5/13‑214.3(b) (two‑year statute for attorney‑related claims)	"Arising out of" should be limited to acts a lawyer is reasonably expected to perform; tortious conspiratorial acts outside the statute	§13‑214.3 broadly covers claims that arise from an attorney’s provision of professional services, regardless of label	§13‑214.3 applies to these claims (malpractice, fraud, aiding and abetting); statute governs the suit
Accrual / discovery rule — when did claim arise for Shrock?	Injuries discovered later; plaintiffs lacked actual knowledge until after bankruptcy proceedings	Shrock had sufficient information by Aug 2013 and, at the latest, by Nov 7, 2014 (Meier’s bankruptcy answer); suit filed Nov 18, 2016 is >2 years	Shrock had enough information to trigger the discovery rule by Nov 7, 2014 (and earlier); claims are time‑barred
Judicial notice of filings from the underlying suits and bankruptcy	Court should not accept the substantive allegations of other pleadings as established facts	Court may judicially notice that those pleadings were filed and thus that Shrock possessed those allegations and information	Court properly relied on filings to show Shrock’s knowledge (not to accept their substantive truth)
Adverse‑domination tolling for BSM (toll while wrongdoer controls LLC)	Tolling should apply until Meier lost control in 2015, so BSM’s suit (Nov 2016) is timely	Presumption of no knowledge is rebutted because Shrock (non‑wrongdoing member) had knowledge, motive, and ability to sue well before 2015	Presumption rebutted: Shrock had motive, knowledge, and authority to bring derivative suit by Nov 7, 2014 (and earlier); BSM’s claims are time‑barred

Key Cases Cited

Evanston Insurance Co. v. Riseborough, 2014 IL 114271 (Illinois Supreme Court: §13‑214.3 covers all claims arising from attorney professional services)
Janousek v. Katten Muchin Rosenman LLP, 2015 IL App (1st) 142989 (applying §13‑214.3 to aiding‑and‑abetting claims against law firm)
Dancor Int’l, Ltd. v. Friedman, Goldberg & Mintz, 288 Ill. App. 3d 666 (discovery rule: accrual delayed until plaintiff reasonably should have known injury was wrongfully caused)
Castello v. Kalis, 352 Ill. App. 3d 736 (knowledge of injury does not require knowledge of specific defendant)
Lease Resolution Corp. v. Larney, 308 Ill. App. 3d 80 (explaining adverse‑domination tolling and rebuttable presumption)
Independent Trust Corp. v. Stewart Info. Servs. Corp., 665 F.3d 930 (7th Cir.) (applying adverse‑domination principle; presumption can be rebutted)
People v. Davis, 65 Ill.2d 157 (judicial‑notice principles for court records)
Caparos v. Morton, 364 Ill. App. 3d 159 (demand futility excusing derivative demand where controllers are alleged wrongdoers)