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Michael A. KluthoBassford Remele, Minneapolis, MN

Member Achievement and Case News: Featured

Estoppel May Bar LPL SOL Defense

Monday, December 17, 2018   (0 Comments)
Posted by: Tom Jensen
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Bank hired counsel to commence foreclosure actions in 2009 in state court. Suits were dismissed in 2011 when a federal court suit was filed. That suit was dismissed in 2012. Then borrowers sued bank in 2012 to prevent further foreclosure actions. Bank counterclaimed on the debt. Court dismissed counterclaim based on the multiple dismissal rule. Counsel told bank the ruling was "illogical" and would be reversed. Appeals court affirmed. Bank filed legal malpractice action against counsel for dismissing the 2011 suit, claiming it prevented foreclosure and alleging misrepresentations were made to hide malpractice. Trial court dismissed per the two-year SOL discovery rule and denied leave to assert an equitable estoppel defense to the SOL. Bank asserted counsel lulled the bank into waiting to file its legal malpractice complaint. Ruling was reversed in Hanmi Bank v. Chuhak & Tecson P.C., 2018 IL App. (1st) 180089 (Dec. 7, 2018). The proposed amended complaint properly alleged equitable estoppel, and the averments had to be taken as true procedurally. Counsel were adamant the decision would be reversed in bank communications during the time they reported a potential claim to their LPL carrier. Thus the trial court abused its discretion in denying leave.      

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