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THIRD DIVISION

November 12, 1998

No. 1-96-2659

JUSTICE LEAVITT delivered the opinion of the court:

Plaintiff Lawrence Lucey brought the present action for legal malpractice against defendantsTheodore Gertz and the law firm of Pretzel & Stouffer. The trial court dismissed plaintiff'samended complaint with prejudice on the basis that the statute of limitations on the malpracticeaction had expired. Plaintiff now appeals, arguing the trial court erred in dismissing his complaintand not permitting him to amend his complaint if it was properly dismissed.

Inasmuch as this case was dismissed pursuant to a motion brought under section 2-619 of theCode of Civil Procedure (Code) (725 ILCS 5/2-619 (West 1996)), we accept as true allwell-pleaded facts in plaintiff's complaint. See Hermitage Corp. v. Contractors Adjustment Co.,166 Ill. 2d 72, 85, 651 N.E.2d 1132 (1995). Plaintiff's first amended complaint alleged thefollowing. In July 1989, plaintiff was employed by The Chicago Corporation, which was in thebusiness of providing advice and brokerage services to individuals, trusts, and corporations.Michigan Physicians Mutual Liability Company (Michigan Physicians) was a client of TheChicago Corporation, and plaintiff was responsible for this account. As an integral part of hisduties at The Chicago Corporation, plaintiff would on occasion attend investment committeemeetings of Michigan Physicians and counsel the investment committee regarding the company'sportfolio. Michigan Physicians requested plaintiff attend its investment committee meetingscheduled for July 16, 1989.

That same month, plaintiff contemplated resigning from The Chicago Corporation and startinghis own firm. On July 19, 1989, plaintiff sought legal advice from Theodore Gertz and the lawfirm of Pretzel & Stouffer regarding the propriety of soliciting clients prior to his resignation.Specifically, plaintiff wanted to know whether he could attend an upcoming Michigan Physiciansmeeting and what information he would be entitled to disclose at that meeting regarding hisdecision to resign from The Chicago Corporation and start his own firm. Gertz advised plaintiffhe could attend the meeting if he did so in his individual capacity and not as an employee of TheChicago Corporation. Gertz suggested plaintiff pay his own expenses to attend the meeting. Hefurther advised plaintiff to inform The Chicago Corporation, prior to attending the meeting, hewas resigning to start his own firm and would be attending the meeting in his individual capacity.

In reliance on this advice, plaintiff attended the Michigan Physicians meeting in his individualcapacity and at his own expense. At that meeting, he disclosed his decision to leave The ChicagoCorporation and begin his own firm. On July 31, plaintiff informed The Chicago Corporation ofhis decision to resign, effective August 15. On August 7, Michigan Physicians informed TheChicago Corporation it would be transferring its portfolio to plaintiff's new firm. On August 25,The Chicago Corporation filed suit against plaintiff based upon the loss of the MichiganPhysicians account (the Chicago Corporation suit).

Plaintiff retained Gertz and Pretzel & Stouffer to defend him in the Chicago Corporation suit.Throughout plaintiff's representation by defendants in this suit, defendants continually advisedplaintiff he had a valid defense to the claims asserted by The Chicago Corporation. In June orJuly of 1994, for reasons unrelated to the Chicago Corporation suit, plaintiff requesteddefendants withdraw from representing him. Plaintiff then retained other counsel. At the time ofplaintiff's complaint, the Chicago Corporation suit was still pending.

Plaintiff filed the instant malpractice action against defendants on July 11, 1995. The only daterelevant to the statute of limitations in this complaint was July 1989, the date the allegedlynegligent advice was given. Defendants filed a motion to dismiss, arguing plaintiff's cause ofaction, having accrued in July 1989, was barred by the five-year statute of limitations applicableto legal malpractice actions accruing prior to January 1, 1991. See 735 ILCS 5/13-205 (West1992). In response to this motion, plaintiff filed his first amended complaint, the contents ofwhich we have just set forth.

Defendants again filed a motion to dismiss, pursuant to section 2-619 of the Code (725 ILCS5/2-619(a)(5) (West 1996)), arguing plaintiff's action was barred by the applicable five-yearstatute of limitations. Defendants acknowledged plaintiff's first amended complaint did set forth anew date (June or July 1994--the date upon which plaintiff's representation by defendants ended)for statute of limitations purposes. They argued plaintiff's action was, nonetheless, still barred bythe five-year statute of limitations, since Illinois does not recognize the "continuousrepresentation rule." This rule, in theory, would toll the running of the statute of limitations untilrepresentation by the defendants ceased. See Witt v. Jones & Jones Law Offices, P.C., 269 Ill.App. 3d 540, 544, 646 N.E.2d 23 (1995). The trial court dismissed plaintiff's complaint, withprejudice, on the basis that the only harm alleged by plaintiff was the filing of the ChicagoCorporation suit on August 25, 1989, resulting in the statute of limitations expiring on August25, 1994.

The primary thrust of the parties' arguments on appeal, both in their briefs and at oral argument,concerns the application, under Jackson Jordan, Inc. v. Leydig, Voit & Mayer, 158 Ill. 2d 240,633 N.E.2d 627 (1994), of equitable estoppel, i.e., whether defendants should be equitablyestopped from asserting the statute of limitations defense because plaintiff's delay in bringing suitwas induced by defendants' reassurances that plaintiff had a valid defense to the claims made byThe Chicago Corporation. As plaintiff acknowledges in his brief, however, it appears from boththe trial judge's oral pronouncements and her written order that the judge was more concernedwith the fact that the underlying Chicago Corporation litigation was unresolved and plaintiff,therefore, could allege no damages at that point. Without damages, the trial court reasoned,plaintiff's malpractice action had not yet accrued, and both the statute of limitations and thedoctrine of equitable estoppel would be inapplicable. Cf. Jackson Jordan, 158 Ill. 2d at 253(discussing equitable estoppel in a case where the defendant law firm's representation of theplaintiff continued past date of entry of first ruling adverse to plaintiff).

We agree with the trial court that plaintiff's malpractice action was premature, at least in theprocedural context presented here. The elements of a legal malpractice claim are: (1) theexistence of an attorney-client relationship that establishes a duty on the part of the attorney; (2) anegligent act or omission constituting a breach of that duty; (3) proximate cause establishing that"but for" the attorney's negligence, the plaintiff would have prevailed in the underlying action;and (4) actual damages. Serafin v. Seith, 284 Ill. App. 3d 577, 586-87, 672 N.E.2d 302 (1996).The injuries resulting from legal malpractice are not personal injuries but pecuniary injuries tointangible property interests. Glass v. Pitler, 276 Ill. App. 3d 344, 349, 657 N.E.2d 1075 (1995).Damages must be incurred and are not presumed (Farm Credit Bank v. Gamble, 197 Ill. App. 3d101, 103, 554 N.E.2d 779 (1990)), and the plaintiff must affirmatively plead and prove that hesuffered injuries as a result of the attorney's malpractice. Bartholomew v. Crockett, 131 Ill. App.3d 456, 465, 475 N.E.2d 1035 (1985). Where the mere possibility of harm exists or damages areotherwise speculative, actual damages are absent and no cause of action for malpractice yetexists. See Farm Credit Bank, 197 Ill. App. 3d at 104.

Both parties have asserted at various times in the proceedings leading to this appeal thatplaintiff's cause of action accrued in July 1989, when the allegedly negligent advice was firstgiven. That is not the law in Illinois. Defendants may have breached a duty owed plaintiff whenthey gave him allegedly negligent advice in July 1989, but a cause of action for legal malpracticedoes not accrue until a plaintiff discovers, or within a reasonable time should discover, his injuryand incurs damages directly attributable to counsel's neglect. See Goran v. Glieberman, 276 Ill.App. 3d 590, 594-95, 659 N.E.2d 56 (1995). In Goodman v. Harbor Market, Ltd., 278 Ill. App.3d 684, 663 N.E.2d 13 (1995), this court commented upon the position taken by the parties inthis case:

"The relationship between an attorney and the client is one in which the attorney is charged witha duty to act skillfully and diligently on the client's behalf. Given the duty, the client is presumedunable to discern any misapplication of legal expertise. As the California Supreme Court hasstated:

'If [the client] must ascertain malpractice at the moment of its incidence, the client must hire asecond professional to observe the work of the first, an expensive and impractical duplication,clearly destructive of the confidential relationship between the practitioner and his client.' (Neelv. Magana, Olney, Levy, Cathcart & Gelfand (1971), 6 Cal. 3d 176, 188, 491 P.2d 421, 428, 98Cal. Rptr. 837, 844.)

Therefore, it is 'the realized injury to the client, not the attorney's misapplication of the expertise,[which] marks the point in time for measuring compliance with a statute of limitations period.'"Goodman, 278 Ill. App. 3d at 689-90, quoting Hermitage Corp., 166 Ill. 2d at 89-90 (Freeman,J., dissenting).

The trial court justifiably questioned whether the statute of limitations had even begun to run inthis case.

If no cause of action accrued in July 1989, the question becomes when (if at all) did plaintiff'scause of action against defendants accrue? Neither party in this case has provided us with muchargument or citation to authority on this point, although it clearly appears to have been theforemost concern of the trial court in dismissing this case. Plaintiff (without citation to authority)and defendants (in a footnote) both assert that, even if we find no cause of action accrued at thetime the allegedly negligent advice was given, plaintiff's malpractice action accrued when hedismissed defendants as counsel and began incurring attorney fees to defend himself in theChicago Corporation litigation. That argument has some superficial support in the caselaw,primarily from this court's decision in Goran. See Goran, 276 Ill. App. 3d at 595; Zelenka v.Krone, 294 Ill. App. 3d 248, __, 689 N.E.2d 1154 (1997) (following Goran); Palmros v.Barcelona, 284 Ill. App. 3d 642, 647, 672 N.E.2d 1245 (1996) (following Goran).

In Goran, the plaintiff was represented by the defendant attorney in an appeal from anadjudication of marriage dissolution and child custody. The defendant filed an appellant's briefbut then withdrew from the appeal. The plaintiff subsequently hired other counsel to representher. The subsequently retained attorneys were required by the appellate court to redo theappellate brief written by the defendant, as well the record on appeal, to bring them both intocompliance with court rules. Subsequent counsel incurred fees of $11,000 reviewing the case and$1,297 in redoing the record and appellant's brief. The plaintiff eventually lost her appeal andfiled a malpractice action against the defendant.

The appellate court in Goran held the plaintiff incurred actionable damages--and, thus, her causeof action accrued--when she paid $1,297 in attorney fees to bring her brief into compliance withcourt rules, as ordered by the appellate court. Goran, 276 Ill. App. 3d at 595-96. The court wascareful to distinguish the $11,000 in fees, which "was not actionable as a result of [defendant]'sneglect but was simply incurred as a result of his permitted withdrawal from the case ***."Goran, 276 Ill. App. 3d at 596. Thus, although the $1,297 in attorney fees triggered the runningof the statute of limitations, the only reason these damages were actionable was that a clearfinding of attorney neglect had already been made in that case. As the defendant argued, and theappellate court impliedly accepted, "regardless of whether the [trial court's] decision was reversedor affirmed, [the plaintiff] sustained damages" when she paid to have her brief redone. Goran,276 Ill. App. 3d at 595. Thus, the Goran holding is a limited one: the incurring of additionalattorney fees may trigger the running of the statute of limitations for legal malpractice purposes,but only where it is clear, at the time the additional fees are incurred, that the fees are directlyattributable to former counsel's neglect (such as through a ruling adverse to the client to thateffect). We reject the parties' thinly supported assertion that subsequently incurred attorney feeswill, in every case, automatically give rise to a cause of action for legal malpractice againstformer counsel.

Admittedly, where an attorney's neglect is a direct cause of the legal expenses incurred by theplaintiff, the attorney fees incurred are recoverable as damages. National Wrecking Co. v.Coleman, 139 Ill. App. 3d 979, 983-84, 487 N.E.2d 1164 (1985); Sorenson v. Fio Rito, 90 Ill.App. 3d 368, 373-74, 413 N.E.2d 47 (1980). However, the converse of this rule is equally true:where an attorney's neglect is not a direct cause of the legal expenses incurred by the plaintiff(i.e., the plaintiff prevails when sued or loses for reasons other than incorrect legal advice), theattorney fees incurred are generally not actionable. Since it is also possible the former client willprevail when sued by a third party, damages are entirely speculative until a judgment is enteredagainst the former client or he is forced to settle. When uncertainty exists as to the very fact ofdamages, as opposed to the amount of damages, damages are speculative, Goran, 276 Ill. App.3d at 595, and no cause of action for malpractice can be said to exist.

The trial court in this case recognized these concerns. The following colloquy occurred prior tothe judge's ruling:

"THE COURT: If [plaintiff] wins the litigation with The Chicago Corporation, then the advice hegot from Pretzel & Stouffer was not malpractice. He has to have damages to have a malpracticeclaim, doesn't he?

***

MR. GOODMAN [Plaintiff's counsel]: There are two problems: The question is whether or notthey are quantified. I do believe there are damages.

THE COURT: What are they?

MR. GOODMAN: Well, the damages, at this point, would be the attorney fees.

THE COURT: But if he wins the litigation -- I thought about that too. If he wins the litigation,the attorney fees are not as a result of any malpractice. They are the result of being sued bysomeone. Pretzel & Stouffer never guaranteed he would not be sued."

Plaintiff himself acknowledges that he may never have a cause of action against defendants in theprayer for relief in his first amended complaint. Tellingly, plaintiff struggled to put a finger onhis damages when forced to state the relief he sought. In each count of his complaint, plaintifffirst seeks "[a]n award for damages exceeding $30,000 as a result of any judgment for monetarydamages that may be entered against the Plaintiff" in the Chicago Corp. litigation. (Emphasisadded.)

Illinois courts have frequently recognized, either expressly or implicitly, a cause of action forlegal malpractice will rarely accrue prior to the entry of an adverse judgment, settlement, ordismissal of the underlying action in which plaintiff has become entangled due to the purportedlynegligent advice of his attorney. See Hermitage Corp., 166 Ill. 2d at 84-87 (where plaintiffsalleged defect in mechanics lien prepared by defendants, statute of limitations began runningwhen circuit court first entered order reducing the amount of the lien); Jackson Jordan, 158 Ill.2d at 253 (mere filing of a lawsuit against client insufficient to trigger running of statute oflimitations); Glass, 276 Ill. App. 3d at 354-55 (where plaintiffs claimed that, contrary to theadvice of defendant attorneys, their pension funds would not have been protected from creditorshad they filed a petition for bankruptcy, damages were speculative, and malpractice actionproperly dismissed, since there was no ruling by a bankruptcy court and law was unsettled);Goran, 276 Ill. App. 3d at 595-96 (attorney fees incurred after court order finding defendant hadnegligently performed legal work triggered cause of action); Belden v. Emmerman, 203 Ill. App.3d 265, 269-70, 560 N.E.2d 1180 (1990) (statute of limitations in legal malpractice action startedto run when the circuit court entered the order that was the subject of the legal malpractice action,not when the circuit court declined to vacate the order or thereafter); Zupan v. Berman, 142 Ill.App. 3d 396, 399, 491 N.E.2d 1349 (1986) ("the adverse result at the time of the end of the trialis the operative factor" in determining when statute of limitations in legal malpractice actioncommenced, not the date of the denial of post-trial motions); Bartholomew, 131 Ill. App. 3d at465 (where attorney's negligence resulted in dismissal of one of two tortfeasors in plaintiff's suit,malpractice action properly dismissed as premature since actual damages would occur only ifplaintiff failed to recover or failed to fully recover against remaining tortfeasor); Gruse v. Belline,138 Ill. App. 3d 689, 698, 486 N.E.2d 398 (1985) (evidence of two judgments entered againstplaintiff, allegedly due to attorney's negligence, was sufficient proof of damages, regardless ofwhether judgments had been paid or collected yet); Bronstein v. Kalcheim & Kalcheim, Ltd., 90Ill. App. 3d 957, 959-60, 414 N.E.2d 96 (1980) (dismissing as premature plaintiff's malpracticecomplaint against attorneys for negligent tax advice, since issuance of a Notice of Deficiency didnot establish plaintiff had suffered a loss; plaintiff would have actionable damages only after aliability determination was made by Tax Court). But see Goodman, 278 Ill. App. 3d at 690(finding date plaintiff was sued due to attorney's alleged negligence to be date plaintiff's cause ofaction accrued, where that was the "undisputed date" of discovery).

Sound policy reasons exist in opposition to a rule which would require the client file aprovisional malpractice action against his attorney whenever the attorney's legal advice has beenchallenged. Among them are judicial economy and preservation of the attorney-clientrelationship. As our supreme court recognized in Jackson Jordan:

"The mere assertion of a contrary claim or the filing of a lawsuit [by a third party] [a]re [sic] not,in and of themselves, sufficiently compelling to induce [a] client to seek a second legal opinion.Meritless claims and nuisance lawsuits are, after all, a fairly commonplace occurrence. It wouldbe a strange rule if every client were required to seek a second legal opinion whenever it founditself threatened with a lawsuit." Jackson Jordan, 158 Ill. 2d at 253.

See also International Engine Parts, Inc. v. Feddersen & Co., 888 P.2d 1279, 1287 (Cal. 1995)(where client brought accountant malpractice action based upon accountant's negligent filing oftax returns, rule that cause of action does not accrue until date of deficiency tax assessmentconserves judicial resources); ITT Small Business Finance Corp. v. Niles, 885 P.2d 965, 972(Cal. 1994) (holding it would be a waste of judicial resources to require both the underlyinglitigation and the legal malpractice action to be litigated simultaneously, rejecting argument that"actual injury" occurred when client incurred attorney fees due to attorney's alleged negligence);T. Ochoa & A. Wistrich, Limitation of Legal Malpractice Actions: Defining Actual Injury andthe Problem of Simultaneous Litigation, 24 Sw. U.L.Rev. 1, 22-23 (1994) (noting "[i]t makeslittle sense to clog court dockets and expend limited judicial time and resources in litigatingmalpractice actions which may be avoided completely by a favorable result in the pendingproceeding"). Simultaneous litigation raises the possibility of inconsistent verdicts and may wellbe disadvantageous to both the attorney and client. See United States National Bank of Oregon v.Davies, 548 P.2d 966, 968-70 (Or. 1976) (simultaneous litigation may be "disastrous" to bothattorney and client, since client will be taking polar positions in each suit permitting hisimpeachment in his defense of the underlying suit); Dearborn Animal Clinic v. Wilson, 806 P.2d997, 1005-6 (Kan. 1991) (following Davies, rejecting argument that malpractice action accruedwhen plaintiff's incurred attorney fees due to attorney's alleged negligence); 24 Sw. U.L.Rev. at19-23 (noting that exposing the attorney's error by filing a malpractice action may alert the otherparty in the underlying action to potentially beneficial information or defenses and causedamages which might not otherwise have arisen; malpractice action also may waiveattorney-client privilege to client's detriment in the pending litigation).

In light of the foregoing principles, we believe the trial court correctly dismissed plaintiff's actionin this case as premature. This is not a case where it is plainly obvious, prior to any adverseruling against the plaintiff, that he has been injured as the result of professional negligence. SeeDancor Int'l v. Friedman, Goldberg & Mintz, 288 Ill. App. 3d 666, 674, 681 N.E.2d 617 (1997)(where client brought malpractice action against certified public accounting firm alleging firmfailed to detect warehouse fraud and embezzlement, professional opinion of new accountants wasnot required to start the limitations period running, since plaintiff had enough informationwithout a professional opinion to file a 35-page federal RICO complaint alleging fraud andembezzlement by perpetrators); Kaplan v. Shure Bros., No. 96C982, 1996 WL 411448, at *8(N.D. Ill. July 18, 1996) (where plaintiff brought breach of contract claim against attorney whorepresented him in purchase of property later found to be environmentally contaminated,malpractice action arose when plaintiff learned of contamination, not when related environmentallitigation terminated). Inasmuch as "the client is presumed unable to discern any misapplicationof legal expertise," Goodman, 278 Ill. App. 3d at 689-90, it cannot be said plaintiff, as a layman,knew or reasonably should have known defendants' legal advice was actionably erroneous whenhe was sued by The Chicago Corporation. In fact, defendants assured plaintiff to the contrarythrough June 1994, according to plaintiff's complaint. Although plaintiff may have been alertedto the possibility defendants had given him incorrect legal advice when he dismissed them andretained other counsel in June or July 1994, his tentative damages would not become actionableunless and until the Chicago Corp. litigation ended adversely to him. See Glass, 276 Ill. App. 3dat 349 (injuries resulting from legal malpractice are pecuniary, not personal); see also HermitageCorp., 166 Ill. 2d at 86-87 (malpractice statute of limitations started to run when trial courtreduced value of plaintiffs' mechanic lien, not when court ruled on motion to reconsider); Belden,203 Ill. App. 3d at 269-70 (statute of limitations in legal malpractice action started to run whenthe circuit court entered the order that was the subject of the legal malpractice action, not whenthe circuit court declined to vacate the order or thereafter); Zupan, 142 Ill. App. 3d at 399 (statuteof limitations in legal malpractice action started to run from the date of judgment, not from thedenial of the post-trial motions). As actionable damages were a mere potentiality prior toresolution of the Chicago Corp. litigation, plaintiff failed to state a claim for legal malpractice,and his first amended complaint was properly dismissed. Although the time at which amalpractice plaintiff knew or should have known that he has been injured and that his injury waswrongfully caused is normally a question of fact, a court may decide the issue as a matter of lawwhere the facts are undisputed and only one conclusion may be drawn from them. Nolan v.Johns-Manville Asbestos, 85 Ill. 2d 161, 171, 421 N.E.2d 864 (1981).

Plaintiff argues that even if we find his complaint was properly dismissed, it should not havebeen dismissed with prejudice. While we concur in the trial court's reasons for dismissingplaintiff's complaint, we believe the trial court abused its discretion in dismissing the complaintwith prejudice (see City of Elgin v. County of Cook, 169 Ill. 2d 53, 71-72, 660 N.E.2d 875 (1995)(trial court's refusal to allow filing of an amended complaint reviewed under an abuse ofdiscretion standard)), at least to the extent that the court's order suggested plaintiff would not bepermitted to refile if and when the Chicago Corp. litigation is resolved adversely to him. Thefacts of the present case are similar to those in Superior Bank FSB v. Golding, 152 Ill. 2d 480,605 N.E.2d 514 (1992).

In Golding, the defendant law firm issued a legal opinion assuring the plaintiff bank that theborrowers, partners in a partnership, would be personally liable on a loan being issued to thepartnership by the bank. The firm further guaranteed the genuineness of all the loan guaranteesand signatures. When the bank was forced to sue the individual partners on the loan guaranty, onepartner defended on the ground his guaranty was a forgery. The bank then amended its complaintto add the law firm as defendants. The supreme court, noting that the record did not revealwhether the matter of the forgery defense had been resolved, ruled that it would be inequitable tosummarily dismiss, with prejudice, the bank's action against the firm, since the accuracy of thefirm's legal opinion was assumed "pending and undetermined." Golding, 152 Ill. 2d at 485. Thecourt noted the bank would be without a remedy if its complaint was dismissed with prejudiceand the firm's legal opinion was later found to be inaccurate. In reaching this conclusion, theGolding court relied upon the purpose of the Code--"to encourage the trial of cases on theirmerits and to avoid premature summary dismissals which would frustrate the search for truth."Golding, 152 Ill. 2d at 488. Under the rationale of Golding, plaintiff's complaint in this caseshould not have been dismissed with prejudice.

Since the issue is likely to arise if plaintiff's cause of action does eventually accrue and he refileshis complaint, we address the potential application of the statute of limitations.

As already discussed, the parties have both contended plaintiff's cause of action accrued in July1989, when the allegedly negligent advice was first given. Having assumed this date of accrual,both parties limit their discussion to the application the five-year statute of limitations in effectfor legal malpractice actions accruing before January 1, 1991 (see Ill. Rev. Stat. 1991, ch. 110,par. 13-205), and argue over whether equitable estoppel was sufficiently pled to toll the runningof the statute.

Nevertheless, as the trial court correctly found, plaintiff's cause of action will accrue, if at all,well after January 1, 1991, the effective date of the most recent statute of limitations applicable tolegal malpractice actions. See 735 ILCS 5/13-214.3 (West 1992). Section 13-214.3 of the Codeprovides:

"(b) An action for damages based on tort, contract, or otherwise *** against an attorney arisingout of an act or omission in the performance of professional services *** must be commencedwithin 2 years from the time the person bringing the action knew or reasonably should haveknown of the injury for which damages are sought.

(c) *** An action described in subsection (b) may not be commenced in any event more than 6years after the date on which the act or omission occurred.

***

(f) This Section applies to all causes of action accruing on or after its effective date." 735 ILCS5/13-214.3 (West 1992).

The effective date of the statute was January 1, 1991.

Were the older statute applicable in the present case, plaintiff would have five years from the dateof the discovery of his cause of action (i.e., the date he settles or has an adverse judgmentrendered against him in the Chicago Corp. litigation) to bring suit, regardless of how distant intime the filing of his complaint was from the date defendants allegedly gave plaintiff negligentadvice--the older statute had no repose period. However, under section 13-214.3, plaintiff hastwo years from the date of discovery, subject to a six-year statute of repose, which runs from "thedate on which the [negligent] act or omission occurred." 735 ILCS 5/13-214.3(c) (West 1992).Thus, in this case, the statute of repose would have commenced running on July 19, 1989, whendefendants allegedly gave plaintiff inaccurate advice. Assuming no tolling of the statute of repose(see Cunningham v. Huffman, 154 Ill. 2d 398, 405-6, 609 N.E.2d 321 (1993) (rejectingcontinuous course of treatment doctrine as tolling medical malpractice statute of repose butinterpreting "act or omission or occurrence" broadly so as to encompass "a continuous andunbroken course of negligent treatment" where the treatment is "so related as to constitute onecontinuing wrong")), plaintiff's cause of action would be barred by the statute of repose on July19, 1995, unless he could successfully assert the previously non-existent statute of repose cut offhis cause of action before he had a reasonable time in which to file (see Mega v. Holy CrossHosp., 111 Ill. 2d 416, 420, 490 N.E.2d 665 (1986) (in the wake of a statute shortening a reposeperiod or providing one where one did not exist previously, a plaintiff whose cause of action isbased upon events occurring prior to the effective date of the new statute will be allowed areasonable period of time in which to bring his action); Goodman, 278 Ill. App. 3d at 694-95 (thereasonable period of time in which a plaintiff may bring suit for injuries sustained prior to theeffective date of a statute of repose can never be more than the repose period itself, computedfrom the effective date of the statute)).

We note that while a malpractice plaintiff who is injured by his attorney's negligent advice in thecourse of representation in a litigation setting will rarely be troubled by the new statute of repose,a six-year repose period, running from the date of the negligent advice, may cut off many legalmalpractice actions before they accrue when the malpractice occurs in a transactional setting. In atransactional setting, an attorney gives his client advice relevant to some transaction, which maybe challenged, if at all, at some indefinite time in the future. Since the client in a transactionalsetting is infrequently in control of these outside events which call into question the accuracy ofthe legal advice he received, and since he generally must await a legal finding in other litigationbefore he can be reasonably certain he has damages directly attributable to the transactionalattorney, a short statute of repose, such as that of section 13-214.3, may cut off manytransactional malpractice actions before they accrue.

The effects of the new repose period on transactional malpractice actions may not, however, be asharsh as they first appear. The Code permits persons in plaintiff's position to seek third-partyrelief in situations such as this. Plaintiff essentially has alleged contingent liability here. SeeBlack's Law Dictionary 223 (6th ed. 1990) (defining contingent liability as "[o]ne which is notnow fixed and absolute, but which will become so in case of the occurrence of some future anduncertain event. A potential liability; e.g., pending lawsuit ***") (Emphasis added). Section2-406 of the Code permits a defendant to bring a third-party action against anyone who "is ormay be liable" to the defendant as a result of the plaintiff's claim against the defendant. See 735ILCS 5/2-406(b) (West 1996); Federal Deposit Insurance Corporation v. Wells, 164 F.R.D. 472,474 (N.D. Ill. 1995).

In Wells, the FDIC as plaintiff brought an action against the defendants, former officers anddirectors of a bank, alleging the defendants were grossly negligent in approving loans andtransactions, and in failing to supervise the bank's lending function. The defendants filedthird-party complaints against their former attorneys, who provided legal counsel to the bank andits directors prior to the bank's failure. The third-party complaints alleged reliance upon the faultyadvice of their attorneys and that such erroneous advice amounted to malpractice. Wells, 164F.R.D. at 473.

The attorneys in Wells were impleaded pursuant to Fed. R.Civ. P. 14(a), which, like its Illinoiscounterpart, section 2-406(b), permits a defendant to bring into a suit any party "who is or may beliable" to him for all or part of plaintiff's claim against defendant. The attorneys in Wells objectedto impleader on the grounds that the defendants had failed to state a cause of action against them,since defendants had not yet been found liable in the principal action and, therefore, could notallege actual damages as required for a claim of legal malpractice in Illinois. Wells, 164 F.R.D. at474.

In denying third-party defendants' motion to dismiss, the court initially noted that in each of thecases cited by the attorneys in support of their motion, the defendant in the primary action (likeplaintiff in the present case) brought a separate suit for malpractice, rather than impleading thethird-party defendants. Wells, 164 F.R.D. at 474. Finding this distinction to be "crucial," theWells court found the purposes of the federal and Illinois impleader rules to be identical andconcluded that allowing dismissal of a third-party legal malpractice complaint simply becausedamages were contingent upon resolution of the primary action would undercut the very purposeof the impleader statute:

"Allowing the 'actual damages' requirement of a given cause of action to prevent impleader ***would effectively eviscerate th[e impleader] statute, as most civil causes of action require that theplaintiff have suffered damages as a result of the defendant's acts or omissions. Accordingly,Illinois courts have recognized generally the distinction which controls here: although adefendant may not bring a separate action for indemnification while the primary lawsuit ispending, a defendant does have 'a choice of filing a third party complaint against a party whomay be liable to indemnify him as part of the original action, or of waiting until the originalaction is over and filing a separate action for indemnity if he is found liable.'" Wells, 164 F.R.D.at 474, quoting Anixter Bros., Inc. v. Central Steel & Wire, 123 Ill. App. 3d 947, 953, 463 N.E.2d913 (1984) (citation omitted).

Cf. Farm Credit Bank, 197 Ill. App. 3d at 104 (where defendant alleged he might one day besued by his mother's heir due to attorney's negligent advice, third-party complaint properlydismissed on the basis of speculative damages, but defendant not foreclosed from impleadingattorney if and when defendant is sued by mother's heir). Thus, as Wells makes clear, impleadermay be available to persons in plaintiff's position. See Anixter Bros., 123 Ill. App. 3d at 953 ("Ineffect, Illinois law allows the third-party indemnity claim to be filed before it accrues, in order topromote settlement of all claims in one action").

This court has previously recognized that a legal malpractice action may be brought via athird-party complaint on an implied indemnity theory. The facts in Kerschner v. Weiss & Co.,282 Ill. App. 3d 497, 667 N.E.2d 1351 (1996) are strikingly similar to those of the present case.In Kerschner, the defendants were partners employed by the plaintiff firm. The defendants wereconsidering leaving the firm and forming a new accounting partnership, and they sought legaladvice from a law firm regarding these proposed actions. When defendants left their former firmand took a client with them, plaintiff sued them. Defendants then filed a third-party complaintagainst their attorney, alleging he gave them negligent advice. The appellate court reversed asummary judgment finding in favor of the law firm, holding that defendants had stated a cause ofaction for implied indemnity based upon quasi-contractual principles:

"Although not falling precisely within the classic forms of derivative liability, the claims assertedby the plaintiffs and by [the defendants] are sufficiently interrelated to allow a third-party action.A finding of liability against [the defendants] in the underlying action is a necessary predicate toa determination of liability in the third-party action against [the law firm]. Consequently, thebroad purposes of judicial economy are best served by having both actions tried together. In lightof the procedural posture of this case, our resolution avoids the fundamental unfairness ofallowing the entry of summary judgment in favor of [the law firm], which constitutes anadjudication on the merits, to forever bar a claim for legal malpractice by [the defendants]."Kerschner, 282 Ill. App. 3d at 507.

As of January 1, 1995, actions for contribution and indemnity have their own statute oflimitations which preempt all other statutes of limitation and repose, except in medicalmalpractice cases. See 735 ILCS 5/13-204 (West 1996); Ganci v. Blauvelt, __ Ill. App. 3d __,690 N.E.2d 649, 652-53 (1998) (finding section 13-204 to be inherently inconsistent andincapable of being applied retroactively). Thus, plaintiff in this cause and others similarlysituated are not without a remedy within the framework of the present statutory scheme.

AFFIRMED AS MODIFIED.

CAHILL, P.J., and GORDON, P.J., concurring.