The Fifth District Appellate Court has affirmed the dismissal of Madison County Circuit Judge Richard Tognarelli, his former law partner and their now-defunct firm as defendants in a legal malpractice complaint.
Although the appeals panel agreed with the St. Clair County Circuit on its dismissal of Tognarelli, Bonnie Levo and Tognarelli & Levo, it reversed the lower court’s entry of summary judgment in favor of Daniel Cody, another attorney involved in the probate matter that spurred the suit at issue.
The appellate court, in an unpublished order released this week, remanded Cody’s matter for further proceedings, determining that questions remain over his legal duty to the minor at the center of the case.
Associate Judge Andrew Gleeson and Circuit Judge Stephen McGlynn both presided over the matter. Gleeson’s ruling was affirmed while McGlynn’s was reversed by the appeals panel consisting of Justices Melissa Chapman, James Donovan and Stephen Spomer.
The probate case dates back 16 years and stems from the 1996 death of Robert Goodman Jr., the father of the minor.
At the time of his death, Goodman and the minor’s mother, Brenda Goodman, were divorced and shared joint custody of their son. He lived in St. Clair County and she lived in Alabama.
Goodman’s last will noted that he wanted his parents to be appointed guardian and trustee of his son, Robert Goodman III, and did not want his ex-wife to be in charge of his estate.
Goodman’s parents, Robert and Willie, hired Tognarelli and his law firm to establish a trust for their grandson. Tognarelli joined the Madison County bench in 2002 as an associate judge. He was elected circuit judge in 2008.
In August 1996, the minor’s grandparents filed a petition for guardianship of both the minor and the estate.
The trial court denied their petition for guardianship of the minor, but held off on ruling on their request for guardianship of the estate until it had more information on how much money was at stake.
According to the appeals panel, Goodman had two life insurance policies, both of which listed his son as the sole beneficiary and totaled about $158,739.
After the court appointed Dennis Watkins as guardian ad litem (GAL) and he filed a petition to determine the allocation of the funds, Brenda Goodman retained Cody to represent her.
In her response to Watkins’ petition, Brenda Goodman proposed that the court enter an order granting her money to buy a home in Alabama and a $1,000 monthly stipend for her son’s care.
The probate court in 1997 entered an order detailing the terms of the trust, which included giving Brenda Goodman $5,000 plus closing costs
for a down payment for a home and either $1,000 per month or the amount of monthly investment interest, whichever was less.
The trust agreement was filed with the probate court in March 1997. Brenda Goodman signed it as trustor and Watkins signed it as a trustee, the appellate court order notes.
Chapman wrote that the final agreement included additional terms offered by the court and gave the trustee “broad and sole discretion in disbursing monies for the best interests of the minor over and above the monthly stipend granted to his mother.”
Shortly after the agreement was filed, Watkins invested about $147,370 of the minor’s trust in three different funds through A.G. Edwards as ordered by the agreement.
A few years later, an Alabama attorney representing Brenda Goodman reached out to Watkins for information regarding the trust.
Watkins responded in writing, saying that the investment funds paid Brenda Goodman about $145,200 from 1997 to mid-2004, as well $26,700 to him in attorney fees.
Chapman wrote in the appellate court order that the reasons for giving Brenda Goodman more than the agreement’s $1,000 stipend “are not fully known.”
Watkins, the appeals panel’s order states, testified that he told Brenda Goodman several times that the funds would run out before her son reached adulthood if she kept removing so much money from the trust, but that he would give into her demands after she wore him down with repeated calls.
By March 2005, all that remained of the original $147,370 investment was $645.
In an effort to remove Watkins as the trustee and obtain relief related to the Watkins’ attorney fee billings, the minor’s grandparents hired a new attorney and sued Watkins, A.G. Edwards and two banks.
They claimed that the court’s order did not allow Watkins to give Goodman more than what was laid out in the order and that the court never authorized Watkins to bill the trust for attorney fees.
The minor’s grandparents amended their complaint twice over the years to add Cody as a defendant and counts against some of the defendants for breach of fiduciary duty and negligence.
They accused the defendants of being negligent by failing to follow the court’s 1997 order, inserting a provision in the trust agreement to allow for unlimited disbursements and failing to know or object to the fact Watkins was professionally uninsured.
The St. Clair County Circuit Court eventually granted summary judgment to A.G. Edwards and the banks named as defendants.
In 2009, Tognarelli, Levo and their law firm sought dismissal, contending the complaint failed to state of cause of action, that they did not draft the trust agreement and had no duty to the minor because they represented the grandparents.
Gleeson agreed and granted their motion to dismiss in 2009, a ruling the appellate court affirmed this week.
“We conclude that, by no longer actively representing the grandparents’ interests in probate court and never achieving a guardianship status for the grandparents which would have involved and had a bearing on the minor’s best interest, Tognarelli, Levo and their firm did not owe a duty to the minor child as to the trust or its management,” Chapman wrote.
The appellate court, however, had a different take on Cody’s motion for summary judgment, which he filed in 2007 and renewed in 2010.
Cody claimed that he had no duty to the minor because he did not represent him and that Illinois law doesn’t support third-party beneficiary claims in legal malpractice matters.
McGlynn in March 2011 granted Cody’s motion for summary judgment, but the appellate court this week reversed and remanded for further proceedings.
While Cody cited the 1982 case of Pelham v. Griesheimerin to support his argument that he had no duty to the minor, the appellate court determined he misread the case.
“Pelham does not stand for the proposition that an attorney cannot owe a duty to a nonclient,” Chapman wrote.
She wrote that although Cody represented the minor’s mother, the purpose of their attorney-client relationship was to secure Brenda Goodman’s access to the funds for her son’s benefit.
“We hold that there was a genuine factual question regarding Cody’s duty to the minor, as a third-party beneficiary of the relationship Cody had with Brenda Goodman,” Chapman wrote. “Therefore, the trial court’s entry of summary judgment on this issue was erroneous.”
The appellate court also rejected Cody’s argument that he couldn’t be held liable for malpractice after Watkins was appointed the minor’s GAL.
“In the context of access to the minor’s funds and representation of the minor’s mother and guardian, the duty owed by Cody and the GAL could certainly have overlapped and coexisted but served different aspects of the process, albeit with the same goal of access to funds for the minor’s benefit,” Chapman wrote for the appellate court.
Reversing the lower court’s ruling on Cody’s motion for summary judgment, the appeals panel held that a factual question remains “as to Cody’s duty to the minor irrespective of the GAL appointment.”
The citation for the order in this case is Robert Goodman III v. Daniel Cody, et al., 2012ILApp (5th) 110175-U.