{ "id": 5139903, "name": "ROSE GOULD, Plaintiff-Appellant, v. SACHNOFF & WEAVER, LTD., et al., Defendants-Appellees", "name_abbreviation": "Gould v. Sachnoff & Weaver, Ltd.", "decision_date": "1992-12-23", "docket_number": "No. 1-91-1017", "first_page": "243", "last_page": "249", "citations": [ { "type": "official", "cite": "240 Ill. App. 3d 243" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "154 Ill. 2d 48", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 4820169 ], "weight": 2, "pin_cites": [ { "page": "52" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/154/0048-01" ] }, { "cite": "421 N.E.2d 869", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "85 Ill. 2d 146", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5469943 ], "pin_cites": [ { "page": "156" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/85/0146-01" ] }, { "cite": "560 N.E.2d 1180", "category": "reporters:state_regional", "reporter": "N.E.2d", "opinion_index": 0 }, { "cite": "203 Ill. App. 3d 265", "category": "reporters:state", "reporter": "Ill. App. 3d", "case_ids": [ 2583619 ], "opinion_index": 0, "case_paths": [ "/ill-app-3d/203/0265-01" ] }, { "cite": "421 N.E.2d 864", "category": "reporters:state_regional", "reporter": "N.E.2d", "year": 1990, "opinion_index": 0 }, { "cite": "85 Ill. 2d 161", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5469841 ], "weight": 2, "year": 1990, "pin_cites": [ { "page": "170-71" }, { "page": "170-71" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/85/0161-01" ] }, { "cite": "152 Ill. 2d 480", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 5603015 ], "weight": 3, "pin_cites": [ { "page": "488-89" }, { "page": "488-89" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/152/0480-01" ] }, { "cite": "435 N.E.2d 443", "category": "reporters:state_regional", "reporter": "N.E.2d", "weight": 2, "opinion_index": 0 }, { "cite": "91 Ill. 2d 69", "category": "reporters:state", "reporter": "Ill. 2d", "case_ids": [ 3092944 ], "weight": 3, "pin_cites": [ { "page": "86-88" } ], "opinion_index": 0, "case_paths": [ "/ill-2d/91/0069-01" ] } ], "analysis": { "cardinality": 497, "char_count": 12226, "ocr_confidence": 0.773, "pagerank": { "raw": 4.867615379091887e-08, "percentile": 0.3063510652551558 }, "sha256": "40cffbde707dcb07251204cc6d03fc058333c7c98f988e01105542486baa3153", "simhash": "1:bf3fcb2f6e19a4dc", "word_count": 1938 }, "last_updated": "2023-07-14T17:58:37.771033+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "ROSE GOULD, Plaintiff-Appellant, v. SACHNOFF & WEAVER, LTD., et al., Defendants-Appellees." ], "opinions": [ { "text": "JUSTICE McMORROW\ndelivered the opinion of the court:\nPlaintiff Rose Gould (plaintiff) filed suit against Sachnoff & Weaver, Ltd., and Jeffrey Rubenstein (hereinafter collectively the defendants) for legal malpractice with respect to plaintiff\u2019s investment in a partnership allegedly recommended by defendants. According to plaintiff\u2019s complaint, the Internal Revenue Service determined that certain adjustments to income relating to the partnership, which had been declared by plaintiff on Federal income tax returns at the defendants\u2019 suggestion, did not qualify for such adjustments. The Internal Revenue Service assessed certain sums against plaintiff for past-due tax liability, including interest, which plaintiff ultimately remitted to the Internal Revenue Service. Plaintiff\u2019s legal malpractice suit alleged that defendants had given plaintiff erroneous advice regarding the investment, its tax consequences, and the consequences of settling the matter with the Internal Revenue Service. Plaintiff also alleged that defendants negligently failed to reveal to plaintiff that defendants held a proprietary interest in the partnership.\nDefendants filed a motion to dismiss plaintiff\u2019s complaint on the ground that it was barred by the applicable statute of limitations. The trial court granted the defendants\u2019 motion to dismiss and plaintiff appeals. We conclude that the record does not establish, as a matter of law, that plaintiff\u2019s complaint was filed after the expiration of the statute of limitations. We further determine that plaintiff\u2019s legal malpractice suit is not barred by the doctrine of Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 435 N.E.2d 443. Accordingly, we reverse and remand for further proceedings.\nPlaintiff\u2019s complaint against defendants made the following pertinent allegations. Plaintiff and her late husband allegedly engaged defendants as their counsel in 1974, and defendants recommended that plaintiff invest $20,000 in a partnership named \u201cAmber Manor Apartments,\u201d as a tax shelter to defer Federal income tax. Plaintiff alleged that she and her husband filed joint tax returns for the years of 1974 and 1975 and claimed certain adjustments to income based upon their interest in Amber Manor Apartments.\nPlaintiff alleged that the Amber Manor Apartments investment was subsequently investigated by the Internal Revenue Service (hereinafter the IRS), thereby causing an audit of the 1974 and 1975 Federal income tax returns filed by plaintiff and her husband. As a result of the audit, the IRS allegedly issued a notice of deficiency to plaintiff and her husband on March 18, 1982.\nPlaintiff alleged in her complaint that based upon the advice of defendants, plaintiff and her husband filed a petition in the Tax Court of the United States for a redetermination of the deficiency that had been issued on March 18, 1982. According to plaintiff\u2019s complaint, the defendants and the IRS negotiated a settlement of the matter in 1988, wherein it was agreed that plaintiff would pay an increase in tax in the amount of $10,290.19 for the 1974 tax year and $367.25 for the 1975 tax year.\nPlaintiff alleged that on approximately June 15, 1989, plaintiff received from the IRS a notice of change to her account. The notice stated that plaintiff owed interest in the sum of $24,460.44 for the 1974 tax year and interest in the amount of $367.25 for the 1975 tax year. Plaintiff alleged that she paid these amounts.\nOn January 9, 1990, plaintiff filed her legal malpractice suit against defendants. She alleged that defendants had not properly advised her and her late husband of the tax consequences of the investment in the Amber Manor Apartments, and that defendants had given plaintiff and her late husband incorrect advice regarding the consequences of their settlement with the IRS upon receipt of the notice of deficiency in 1982. Plaintiff also alleged that defendants had negligently failed to disclose the defendants\u2019 proprietary interest in Amber Manor Apartments. Plaintiff requested damages in the amount of $55,279.88, i.e., her initial investment ($20,000) plus accrued interest liability she had paid ($35,279.88).\nThe defendants responded to plaintiff\u2019s pleading with a motion to dismiss the complaint because it had not been filed within the applicable five-year statute of limitations. (Ill. Rev. Stat. 1989, ch. 110, par. 13 \u2014 205 (five-year statute of limitations); Ill. Rev. Stat. 1989, ch. 110, par. 2 \u2014 619(a)(5) (motion to dismiss for failure to file suit within applicable statute of limitations).) Following briefing and a hearing, the trial court allowed defendants\u2019 motion and dismissed plaintiff\u2019s complaint with prejudice. Plaintiff appeals.\nAt the time of its filing, plaintiff's pleading was governed by a five-year statute of limitations. (See Ill. Rev. Stat. 1989, ch. 110, par. 13 \u2014 205.) Plaintiff and the defendant agree that the discovery rule applies to the five-year statute of limitations governing plaintiff\u2019s legal malpractice claims. (See, e.g., Superior Bank F S B v. Golding (1992), 152 Ill. 2d 480.) Under the discovery rule, the statute of limitations begins to run when the plaintiff knew, or in the exercise of reasonable diligence should have known, that the defendant committed a tortious act. (Superior Bank F S B, 152 Ill. 2d at 488-89; Nolan v. Johns-Manville Asbestos (1981), 85 Ill. 2d 161, 170-71, 421 N.E.2d 864; see also Belden v. Emmerman (1990), 203 Ill. App. 3d 265, 560 N.E.2d 1180.) This question is generally a factual issue, although its disposition as a matter of law is appropriate where the facts are not contradicted and establish that the movant is entitled to summary adjudication of the question. See Superior Bank F S B, 152 Ill. 2d at 488-89; Nolan, 85 Ill. 2d at 170-71; Witherell v. Weimer (1981), 85 Ill. 2d 146, 156, 421 N.E.2d 869.\nIn the present case, the defendants argue that plaintiff did not file suit within five years of the date on which she knew, or reasonably should have known, of the defendants\u2019 alleged negligence in the legal advice they provided to plaintiff and her late husband. Plaintiff submits that she did not become aware of defendants\u2019 malpractice until after she received the 1989 IRS notice that she owed additional interest for her 1974 and 1975 income tax returns. Specifically, according to plaintiffs complaint, defendants committed legal malpractice when they failed to inform plaintiff that additional interest would be owed even though plaintiff and her late husband were to settle with the IRS. Plaintiff also asserts that defendants were negligent because they failed to raise before the IRS or the Tax Court that the notice of deficiency issued by the IRS was time-barred, and because the defendants failed to advise plaintiff and her late husband that contesting the notice of deficiency \u201cin other courts\u201d would have eliminated the possibility that interest would be assessed. Plaintiff further contends that the defendants were negligent because they did not disclose the existence of defendants\u2019 proprietary interest in Amber Manor Apartments, in violation of the Code of Professional Responsibility. Lastly, plaintiff claims that defendants failed to advise that the purchase of Amber Manor Apartments as a tax shelter would be unacceptable by the IRS to offset Federal income taxation.\nDefendants argue that plaintiff and her late husband were placed on notice in 1982, when the IRS issued its notice of deficiency, that the investment in Amber Manor Apartments did not satisfy the goal of purchasing a tax shelter for Federal income tax purposes. Defendants also assert that it was in 1982, upon the IRS\u2019s issuance of the notice of deficiency, that plaintiff and her late husband learned that they would have to pay interest with respect to their 1974 and 1975 Federal income tax returns.\nTo support this assertion, defendants point to the notice of deficiency sent from the IRS to plaintiff and her late husband. However, we have reviewed this document and do not find that it explicitly advises plaintiff or sufficiently puts her on notice that she would owe interest on her 1974 or 1975 Federal income taxes in the event that she filed suit or settled the matter with the IRS. Consequently, we cannot say, as a matter of law, that this document establishes that plaintiff was aware, or should have been aware, in 1982, that she would have to pay additional interest on her outstanding tax liability.\nTo further support their position, defendants also refer to documents written by defendants to plaintiff and her late husband. However, these documents are not included in the record on appeal and therefore do not support defendants\u2019 position.\nIn light of these considerations, we conclude that plaintiff\u2019s suit was not barred by the five-year statute of limitations. Plaintiff alleged that it was in 1989, when she received notice from the IRS of the amount of interest that she had to pay, that plaintiff first learned that she would be required to pay interest with respect to her 1974 and 1975 Federal income taxes. Defendants have not presented evidence to show, as a matter of law, that plaintiff should have known at an earlier date that interest would also be due and owing for the 1974 and 1975 Federal tax years. Although plaintiff received the notice of deficiency from the IRS in 1982, we do not believe that this event, considered in isolation, is sufficient to establish as a matter of law that plaintiff should have realized, at that time, that defendants had been negligent in their advice regarding the Amber Manor Apartments as a Federal tax shelter. As a result, we find defendants\u2019 arguments inadequate ground to justify the trial court\u2019s dismissal of plaintiff\u2019s complaint for failure to file suit within the appropriate statute of limitations.\nWe also note that defendants have wholly failed to respond to plaintiff\u2019s allegation that defendants were negligent because they allegedly failed to advise plaintiff and her late husband that defendants held a proprietary interest in Amber Manor Apartments. Defendants present no evidence with regard to when plaintiff knew or should have known of the defendants\u2019 proprietary interest in the matter. As a result, the record does not establish that plaintiff\u2019s claim in this respect was filed beyond the five-year statute of limitations.\nDefendants also contend that plaintiff\u2019s suit is barred by the Moorman doctrine. In Moorman Manufacturing Co. v. National Tank Co. (1982), 91 Ill. 2d 69, 435 N.E.2d 443, the Illinois Supreme Court held that a plaintiff cannot recover solely economic damages in an action sounding in negligence, but is limited to recovery based upon breach of contract. (91 Ill. 2d at 86-88.) According to defendants, plaintiff\u2019s suit seeks damages for economic loss, which can only be recovered in contract, not tort.\nThe Illinois Supreme Court addressed this question in Collins v. Reynard (1992), 154 Ill. 2d 48, and held that Moorman does not extend to legal malpractice claims. (154 Ill. 2d at 52.) In light of this precedent, we conclude that plaintiff\u2019s legal malpractice suit against defendants is not barred by the Moorman doctrine.\nBecause we find that defendants have failed to establish as a matter of law that plaintiff\u2019s suit was barred by the statute of limitations, we need not and do not address plaintiff\u2019s argument that defendants should be equitably estopped from raising the statute of limitations defense as a bar to plaintiff\u2019s claims.\nFor the reasons stated, the order of the circuit court of Cook County is reversed and the cause remanded for further proceedings consistent herewith.\nReversed and remanded.\nLINN, and JOHNSON, JJ., concur.\nJustice McMorrow participated in the disposition of this case prior to her becoming a member of the supreme court of Illinois.\nJustice Linn participated in the disposition of this case prior to his retirement.", "type": "majority", "author": "JUSTICE McMORROW" } ], "attorneys": [ "Howard F. Davis, of Chicago, for appellant.", "Marvin A. Tenenbaum, of Tenenbaum & Senderowitz, of Chicago, for appellees." ], "corrections": "", "head_matter": "ROSE GOULD, Plaintiff-Appellant, v. SACHNOFF & WEAVER, LTD., et al., Defendants-Appellees.\nFirst District (4th Division)\nNo. 1 \u2014 91\u20141017\nOpinion filed December 23, 1992.\nHoward F. Davis, of Chicago, for appellant.\nMarvin A. Tenenbaum, of Tenenbaum & Senderowitz, of Chicago, for appellees." }, "file_name": "0243-01", "first_page_order": 261, "last_page_order": 267 }