An Illinois appellate court applies the statute of repose to bar a legal malpractice action against an attorney for improperly setting up a special needs trust for a client's wife suffering from Alzheimer's disease. Doyle v. Hood (Ill. App. Ct. 2d, No. 2-17-1041, Sept. 28, 2018).
In 2011, attorney Thomas Hood prepared a revocable living trust and will for Harry Doyle. Mr. Doyle signed the two documents on December 15, 2011, and died on January 14, 2012. The living trust established a supplemental trust intended as a special needs trust (SNT) for Mr. Doyle’s wife Patricia O’Malley, who suffered from Alzheimer’s disease. Their son Michael Doyle was trustee of the living trust.
Ms. O’Malley was admitted to a long-term-care facility in late 2013 and an application for Medicaid benefits was filed in July 2014 on her behalf. In February 2016 the Illinois Department of Human Services (DHS) included the money in the supplemental trust among Ms. O’Malley’s assets and imposed a spend-down of $236,437.67. In August 2016, on appeal, DHS approved Ms. O’Malley’s application for benefits but instead of a spend-down, she was subject to payment of a $234,561 penalty.
Michael sued Attorney Hood in May 2017 claiming that he negligently funded the SNT through the living trust rather than the will. As a result, Michael averred, Ms. O’Malley rather than Mr. Doyle funded the SNT, giving rise to the penalty. Mr. Hood moved to dismiss the case, arguing that the case was time-barred by the two-year repose period contained in Illinois Code of Civil Procedure (Code) section 13-214.3(d). The court agreed and dismissed the case. Michael appealed, arguing, inter alia, that the six-year repose period found in section 13-214.3(c) of the Code applied; that the injury from Mr. Hood’s negligence arose at the time the estate documents were prepared, not upon Mr. Doyle’s death; and that Ms. O’Malley’s disability tolled the repose period.
The Appellate Court of Illinois, Second District, affirms dismissal. Section 13-214.3(d) of the Code shortens to two years the repose period for legal malpractice actions where the injury does not occur until the death of the client to whom the services were provided. The court concludes that the alleged injury to Ms. O’Malley did not occur until Mr. Doyle’s death because he could have revised his living trust and will at any time. It was not until he died, when the living trust became irrevocable and the SNT was funded, that the injury to Ms. O’Malley occurred. The court further finds that Ms. O’Malley’s disability has no impact on time limits to bring suit because she had no authority to sue on the trust’s behalf.
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