Gale v. Williams

8/31/98 No. 3--97--1008
_________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

THIRD DISTRICT

A.D., 1998

RUTH GALE, Individually and ) Appeal from the Circuit Court
as Administrator of the ) of the 10th Judicial Circuit,
Estate of DENNIS GALE, ) Tazewell County, Illinois,
Deceased, )
)
Plaintiff-Appellant, )
)
v. ) No. 97--L--24
)
DICK L. WILLIAMS, ) Honorable
) Donald C. Courson,
Defendant-Appellee. ) Judge, Presiding.
_________________________________________________________________

JUSTICE SLATER delivered the opinion of the court:
_________________________________________________________________

Plaintiff Ruth Gale, mother of decedent Dennis Gale, brought
a legal malpractice claim against defendant attorney Dick
Williams, who represented decedent in a divorce proceeding.
Plaintiff's complaint alleged that defendant was negligent in his
representation of Dennis Gale. Count I was brought by Ruth Gale,
individually, and count II was brought by Ruth Gale in her
capacity as administrator of the estate of Dennis Gale. The
court granted defendant Williams' motion to dismiss and found
that plaintiff's count I failed to state a claim for legal
malpractice and count II was time-barred by the applicable
statute of limitations. Plaintiff appeals.
 FACTS
Defendant Dick Williams represented Dennis Gale, deceased,
in a divorce proceeding between Dennis and his then wife, Mary
Gale. A decree for divorce was entered on March 24, 1994.
Dennis Gale died intestate on May 29, 1995, and his mother became
administrator of his estate.
Plaintiff's allegations of legal malpractice stem from an
"All Benefits Plan" beneficiary designation form, dated September
26, 1985, and signed by Dennis Gale, in which Dennis Gale
designated beneficiaries for certain employer-provided plans,
including group life insurance, employee thrift and a pension/
retirement plan. Mary Gale is the primary beneficiary and Ruth
Gale is designated as the contingent beneficiary.
It is undisputed that defendant had no knowledge of the "All
Benefits Plan" form. Dennis Gale knew of the existence of the
form and he signed the divorce decree, which contained no
provisions requiring any change in the beneficiary designations
of the employer-provided plans. The qualified domestic relations
orders (QDRO's), prepared by defendant after the entry of
judgment of dissolution, as well as other post-divorce
correspondence between defendant and decedent's employer, did not
involve a change of beneficiaries for any employer-provided plan.
Plaintiff alleges however, that, as part of defendant's
representation of the deceased in the divorce proceedings,
defendant was obligated to change the beneficiary designation to
name her, Ruth Gale, as the primary beneficiary to the employer-
sponsored plans. Additionally, as administrator of the estate of
Dennis Gale, plaintiff claims that defendant had a duty to name
the estate as the primary beneficiary to the employer-provided
plans.
Defendant filed a motion to dismiss plaintiff's complaint on
the basis that Ruth Gale, individually, lacked standing to bring
a legal malpractice claim, and that the estate's claim was time-
barred by the two-year statute of limitations. The trial court
granted defendant's motion and dismissed plaintiff's complaint
with prejudice. We affirm.
ANALYSIS
In resolving a motion to dismiss, a court must assume that
all well-pleaded facts are true and may consider all reasonable
inferences that can be drawn from those facts. Williams v. Board
of Education of the City of Chicago, 222 Ill. App. 3d 559, 584 N.E.2d 257 (1991). Mere conclusions of law and unsupported
conclusions of fact are not to be considered. Gilbert Brothers,
Inc. v. Gilbert, 258 Ill. App. 3d 395, 630 N.E.2d 189 (1994). A
motion to dismiss should only be granted where it clearly appears
that no set of facts can be proved which will entitle plaintiff
to recover. Ogle v. Fuiten, 102 Ill. 2d 356, 466 N.E.2d 224
(1984). The review of an order dismissing a complaint is de
novo. Zelenka v. Krone, 294 Ill. App. 3d 248, 689 N.E.2d 1154
(1997).
 I
The first issue we address is whether defendant attorney
owed a duty of reasonable care to the nonclient plaintiff.
In order to state a legally sufficient claim for negligence,
a plaintiff must set out facts that establish the existence of a
duty owed by the defendant to the plaintiff, a breach of that
duty, and an injury proximately caused by that breach. Pelham v.
Griesheimer, 92 Ill. 2d 13, 440 N.E.2d 96 (1982). Whether a duty
exists is a question of law for the determination of the trial
court. McLane v. Russell, 131 Ill. 2d 509, 546 N.E.2d 499
(1989). To conclude that a duty exists, the trial court must
find that the defendant and the plaintiff stood in such a
relationship to one another that the law imposed upon the
defendant an obligation of reasonable conduct for the benefit of
the plaintiff. Pelham, 92 Ill. 2d 13, 440 N.E.2d 96.
The general rule in Illinois is that an attorney can only be
liable in negligence to his client and not to nonclient third
parties. Pelham, 92 Ill. 2d 13, 440 N.E.2d 96. A contract for
professional services between an attorney and a client does not
create a professional obligation between the attorney and a third
party (Byron Chamber of Commerce, Inc. v. Long, 92 Ill. App. 3d
864, 415 N.E.2d 1361 (1981)), unless the attorney was hired by
the client with the intent and purpose of benefitting that third
party (Pelham, 92 Ill. 2d 13, 440 N.E.2d 96).
The exception carved out by the Pelham court expands an
attorney's liability to nonclients but only in certain limited
circumstances. The "key consideration" for determining if the
attorney owes a duty to the third party is whether the attorney
"act[ed] at the direction of or on behalf of the client to
benefit or influence [the] third party." Pelham, 92 Ill. 2d at
21, 440 N.E.2d at 100. In other words, for a nonclient plaintiff
to succeed in a negligence action against an attorney, the
nonclient must prove that the primary intent and purpose of the
attorney-client relationship was to benefit or influence the
nonclient. Pelham, 92 Ill. 2d 13, 440 N.E.2d 96.
Applying these principles to the facts of this case, we find
that the primary and direct reason that decedent hired attorney
Williams was to obtain a divorce, not to represent plaintiff's
interests. No facts were introduced that would establish any
duty owed by defendant attorney to plaintiff or that plaintiff
was the intended beneficiary of the attorney-client relationship.
Plaintiff simply cannot allege that the primary reason her son
hired the defendant attorney was to change her status from
contingent beneficiary on the employer-provided plans to primary
beneficiary. At best, plaintiff is only an incidental
beneficiary of the attorney-client relationship, and an
incidental beneficiary is not qualified to bring a malpractice
action of this character. York v. Stiefel, 99 Ill. 2d 312, 458 N.E.2d 488 (1983). The fact that plaintiff may have indirectly
benefitted from defendant's representation of her son does not
mean, as plaintiff argues, that the attorney thereby owes a duty
to her. See Schechter v. Blank, 254 Ill. App. 3d 560, 627 N.E.2d 106 (1993).
In support of her argument that attorney defendant owed her
a duty, plaintiff cites Zelenka, 294 Ill. App. 3d 248, 689 N.E.2d 1154, Simon v. Wilson, 291 Ill. App. 3d 495, 684 N.E.2d 791
(1997), Jewish Hospital of St. Louis v. Boatman's Bank of
Belleville, 261 Ill. App. 3d 750, 633 N.E.2d 1267 (1994), McLane,
131 Ill. 2d 509, 546 N.E.2d 499, and Ogle, 102 Ill. 2d 356, 466 N.E.2d 224, wherein the courts found a duty between the attorneys
and the nonclient plaintiffs. These post-Pelham cases concern
nonclient plaintiffs who were the intended beneficiaries to wills
or trust agreements prepared by the defendant attorneys at the
specific request of the clients. These cases are factually
distinguishable and inapplicable to the instant case, where the
primary purpose of the attorney-client relationship was to assist
the client in obtaining a divorce.
We have carefully considered plaintiff's remaining
contentions, including her argument in reliance on dicta in the
Pelham case, and believe that no further discussion is necessary.
For these reasons, we conclude as a matter of law that
defendant owed no duty to the nonclient plaintiff. The trial
court properly dismissed count I of plaintiff's complaint for
failure to state a cause of action.
 II
The second issue we address is whether plaintiff's claim on
behalf of the estate of Dennis Gale is barred by the statute of
limitations.
The parties agree that the applicable statute of limitations
governing personal actions against attorneys is found in the Code
of Civil Procedure and states in pertinent part as follows:
"An action for damages based on tort *** must be
commenced within 2 years from the time the person
bringing the action knew or reasonably should have
known of the injury for which damages are sought." 735
ILCS 5/13-214.3(b) (West Supp. 1997).
When a party knew or should have known that an injury occurred
and that the injury was wrongfully caused is generally a question
of fact which should go to the jury. Zelenka, 294 Ill. App. 3d
248, 689 N.E.2d 1154; Goran v. Glieberman, 276 Ill. App. 3d 590,
659 N.E.2d 56 (1995). Where the facts are undisputed and only
one conclusion is evident, however, the court may determine the
date of the commencement of the statute of limitations as a
matter of law. Goran, 276 Ill. App. 3d 590, 659 N.E.2d 56.
Plaintiff initially contends there is a distinct
disagreement as to the time Dennis Gale, the decedent, actually
knew or should have known of the negligence of the defendant.
She claims that the earliest date the negligence could have been
known was May 29, 1995, at the death of Dennis Gale. It was only
after Dennis Gale died that it was discovered, albeit by the
plaintiff mother, that the beneficiaries had not been changed and
the proceeds went to the decedent's ex-wife, Mary Gale. Citing
the Zelenka case, plaintiff urges us to find that the statute of
limitations began to run when she, the contingent beneficiary,
knew or should have known of the attorney's negligence.
Plaintiff's argument is flawed because she attempts to
attribute knowledge of the attorney's alleged negligence to
herself rather than to the decedent. Count II of plaintiff's
complaint was brought on behalf of the estate of Dennis Gale,
which means that for purposes of count II, it is as if Dennis
Gale, himself, is bringing the cause of action for legal
malpractice. Therefore, it is Dennis Gale's knowledge of the
injury that is at issue and the statute of limitations begins to
toll when the decedent knew or reasonably should have known that
the alleged act of negligence occurred.
The facts show that Dennis Gale, as a signatory to the
judgment for dissolution, knew or reasonably should have known
that the judgment did not contain any provisions concerning
changes to the beneficiary designation on his employer-provided
life insurance policy. In other words, the attorney's alleged
negligence in failing to change the distribution of benefits was
known or should have been known to Dennis Gale on March 24, 1994,
the date the judgment of dissolution was entered. Count II of
plaintiff's complaint, originally filed on March 5, 1997, is thus
barred under the two-year statute of limitations.
Plaintiff argues that attributing knowledge of the alleged
injury to Dennis Gale on March 24, 1994, assumes that he should
have been aware of the negligence at the moment it occurred. She
cites Goran to remind us that it is against public policy and
contrary to law to expect a client to ascertain malpractice at
the moment it occurs. Goran, 276 Ill. App. 3d 590, 659 N.E.2d 56. She correctly asserts that the statute of limitations begins
to toll when the client knew or should have known that the
negligence occurred. However, she neglects the fact that the
discovery rule protects a plaintiff only until he knows or
reasonably should know of the injury, not until he has actual
knowledge. Hitt v. Stephens, 285 Ill. App. 3d 713, 675 N.E.2d 275 (1997). Since the discovery rule does not require that
decedent had actual knowledge of the injury, the statute of
limitations began to toll on March 24, 1994, when decedent knew
or reasonably should have known of the alleged act of negligence.
Plaintiff also argues that decedent had no reason to know
that the failure to change the beneficiary was negligent or
wrongfully done by defendant. She claims that decedent could
reasonably have believed that defendant was continuing to work on
the matter. This argument implicitly admits that decedent had
knowledge of the attorney's alleged omission. Decedent's belief
that the matter was being worked on necessarily implies knowledge
that the matter remained unresolved.
Finally, we believe that plaintiff's reliance on Zelenka is
misplaced. In that case, the plaintiff wife was an intended
beneficiary of her husband's inter vivos trust and brought
individual claims for legal malpractice against the attorneys who
were hired to draft and review the trust agreement. Focusing on
the plaintiff's knowledge of the injury, we found that her cause
of action accrued when she incurred an obligation to pay legal
fees due to her attorneys' negligent conduct. In the instant
case, plaintiff mother mistakenly assumes that it is her
knowledge of the alleged negligence that is relevant, when in
fact, as discussed above, it is the knowledge of the decedent
that is dispositive in determining the commencement date of the
limitations period.
We conclude as a matter of law that decedent knew or
reasonably should have known of the alleged injury on March 24,
1994. Count II of plaintiff's complaint, brought on behalf of
the estate of Dennis Gale on March 5, 1997, is thus time-barred
by the two-year statute of limitations.
For the reasons stated above, the judgment of the circuit
court of Tazewell County is affirmed.
Affirmed.
BRESLIN and HOLDRIDGE, J.J., concur.