Montgomery et al v. Henderson et al

Filing 57

WRITTEN Opinion entered by the Honorable Ronald A. Guzman on 12/21/2012: For the reasons set forth in this order, the Court grants defendants' motion for leave to file an amended answer 41 . Mailed notice(cjg, )

Order Form (01/2005)

United States District Court, Northern District of Illinois
Name of Assigned Judge
or Magistrate Judge

Ronald A. Guzman

CASE NUMBER

11 C 7640

CASE
TITLE

Sitting Judge if Other
than Assigned Judge

DATE

12/212012

Spencer Montgomery vs. Douglas Arend, et al.

DOCKET ENTRY TEXT

For the reasons set forth in this order, the Court grants defendants’ motion for leave to file an amended answer
[41].

O[ For further details see text below.]

Docketing to mail notices.

STATEMENT
In this suit, plaintiff seeks to recover damages from his former lawyers for bad advice they allegedly gave
him about operating an options broker-dealer. Defendants seek leave, pursuant to Federal Rule of Civil
Procedure 15(a), to amend their answer to assert the affirmative defenses of unclean hands, comparative fault
and untimeliness. Plaintiff asks the Court to deny the motion because defendants unduly delayed in making it,
plaintiff would be prejudiced by the proposed amendment and it would be futile. See Foman v. Davis, 371 U.S.
178, 182 (1962) (stating that a motion to amend should be granted unless there is “undue delay, bad faith or
dilatory motive on the part of the movant, repeated failure to cure deficiencies by amendments previously
allowed, undue prejudice to the opposing party by virtue of allowance of the amendment [or] futility of
amendment”).
Even if, as plaintiff argues, defendants unduly delayed making their request to amend, that delay is a basis
for denying their motion only if it prejudices plaintiff. See Doherty v. Davy Songer, Inc., 195 F.3d 919, 922 (7th
Cir. 1999) (“[M]ere delay, without a showing of prejudice, is not sufficient to deny [leave to] amend[].”)
Because the Court has extended the discovery deadline, the only prejudice plaintiff identifies is the cost of
additional discovery. Plaintiff does not, however, estimate those costs, precluding the Court from assessing the
extent of this purported prejudice. Moreover, given that the proposed defenses are based on allegations made
in a suit the CFTC has been pursuing against plaintiff since March 2012, any additional discovery costs should
be minimal.
The Court is also not persuaded that the proposed amendment would be futile. See Glick v. Koenig, 766
F.2d 265, 268 (7th Cir. 1985) (stating that a proposed amendment is futile if it “could not withstand a motion to
dismiss”). Unclean hands is a viable defense to a legal malpractice claim based on lawyer’s failure to help
plaintiff commit or escape the consequences of wrongful conduct. See Makela v. Roach, 492 N.E.2d 191, 195
(Ill. App. Ct. 1992) (holding that unclean hands barred plaintiff from recovering for her lawyer’s alleged failure
to help her defraud medical creditors); Mettes v. Quinn, 411 N.E.2d 549, 551 (Ill. App. Ct. 1980) (holding that
11C7640 Spencer Montgomery vs. Douglas Arend, et al.

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STATEMENT
plaintiff could not “recover[] from her attorney because his faulty advice caused her fraud to be uncovered”).
Whether that is what happened in this case is an issue of fact that cannot be determined on motion to dismiss.
See Bucci v. Rustin, 592 N.E.2d 297, 300 (Ill. App. Ct. 1992) (stating that an unclean hands defense that “raises
factual issues attacking the allegations in the complaint . . . should not be resolved” on a motion to dismiss).
Because the viability of the unclean hands defense depends on facts that have yet to be determined, the Court
cannot say that it would be futile for defendants to assert it.
The same is true for the comparative fault defense. Illinois’ modified comparative fault statute, which
bars tort plaintiffs from recovering for bodily injury, death or property damage for which they are more than half
at fault, does not apply to legal malpractice claims. See 735 Ill. Comp. Stat. 5/2-1116(c) (“In all actions on
account of death, bodily injury or physical damage to property in which recovery is predicated upon fault, . . .
. [t]he plaintiff shall be barred from recovering damages if the trier of fact finds that the contributory fault on the
part of the plaintiff is more than 50% of the proximate cause of the injury or damage for which recovery is sought
. . . .”); Eastman v. Messner, 721 N.E.2d 1154, 1158 (Ill. 1999) (“The injuries resulting from legal malpractice
are not personal injuries but, instead, are pecuniary injuries to intangible property interests.”). However, the
doctrine of pure comparative fault, under which a tort plaintiff’s recovery is reduced by the percentage of fault
he bears for his injury, still applies. Nika v. Danz, 556 N.E.2d 873, 884 (Ill. App. Ct. 1990) (“[A] legal
malpractice case[] [is] no different from an ordinary negligence case where contributory negligence is an
affirmative defense.”); see Bd. of Trs. of Comty. Coll. Dist. No. 508 v. Coopers & Lybrand, 803 N.E.2d 460, 465
(Ill. 2003) (stating, in the context of an accountant malpractice suit, that the doctrine of pure comparative fault
is “applicable to tort actions for recovery of economic loss”); see also Carmel v. Clapp & Eisenberg, P.C., 960
F.2d 698, 703 (7th Cir. 1992) (“It is also well established that a plaintiff client’s failure to follow legal advice
may constitute contributory negligence in a legal malpractice case.”). Accordingly, defendants’ assertion of this
defense would not be futile.
Plaintiff also argues that, to the extent defendants assert it to the breach of fiduciary duty claim, the
proposed limitations defense is futile. (See Resp. Opp’n Mot. Defs.’ Mot. Leave File Am. Answer at 11.)
Defendants, however, seek to assert this defense solely to the malpractice claim. (See Defs.’ Mot. Leave File
Am. Answer at 10 & n.3.) Because plaintiff does not argue futility with respect to the malpractice claim, there
is no basis for denying defendants leave to assert this defense.

11C7640 Spencer Montgomery vs. Douglas Arend, et al.

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