Joyce v. DLA Piper Rudnick Gray Cary LLP

In Joyce v. DLA Piper Rudnick Gray Cary LLP, 382 Ill. App. 3d 632, 636-37, 888 N.E.2d 657, 321 Ill. Dec. 138 (2008), the plaintiff, on behalf of stockholders, sued the defendant law firm due to an alleged drafting error in a merger agreement. The plaintiff offered to withhold the defendant's name from their forthcoming suit against a codefendant if the defendant agreed to enter into a tolling agreement with respect to the statute of limitations. The parties agreed: "1. The running of any statute of limitations applicable to any of the Potential Claims, whether arising under state or federal law, including any defense based upon the doctrine of laches or any similar defense based upon the lapse of time (collectively, the "Statute of Limitations Defenses") is hereby tolled until such time as a lawsuit asserting any one or more of the Potential Claims against defendant is filed so long as such lawsuit is filed on behalf of one or more of the Potential Claimants, on or before December 31, 2002, and the Shareholder Representative delivers written notice to the undersigned representative of defendant of the filing of such lawsuit within three (3) business days after it is filed; 2. Without limiting the generality of any of the foregoing, defendant hereby waives and agrees not to assert or attempt to avail itself of any Statute of Limitations Defenses based in whole or in part upon the passage of time occurring after the date of this Agreement in response to any lawsuit asserting any of the Potential Claims, provided such lawsuit is filed on behalf of one or more of the Potential Claimants, on or before December 31, 2002, and the Shareholder Representative delivers written notice to the undersigned representative of defendant of the filing of such lawsuit within three (3) business days after it is filed; 3. Except to the extent provided herein, this Agreement is without prejudice to the respective rights, claims and defenses of the parties hereto; and notwithstanding anything to the contrary contained herein, it is specifically understood and agreed that any Statute of Limitations Defense or Defenses which defendant may have as of the date of this Agreement is preserved, and shall not be affected in any manner whatsoever by this Agreement, and may be asserted by defendant in response to or against any one or more of the Potential Claims;'" Joyce, 382 Ill. App. 3d at 633-34. The parties' tolling agreement was amended four times, altering only the date on which the plaintiff was required to file suit against the defendant. As such, only the first two paragraphs of the tolling agreement were affected. In addition, the final amendment provided that: "'In all other respects, the Tolling Agreement, the First Amendment, the Second Amendment, the Third Amendment and the Fourth Amendment shall remain in full force and effect.'" Joyce, 382 Ill. App. 3d at 635. The plaintiff filed the underlying legal malpractice claim nearly one year after the expiration of the tolling agreement. The defendant moved to dismiss the plaintiff's claim as untimely, but the circuit court denied the motion, finding that the plaintiff's claim was timely based upon the tolling agreement. The court also denied the defendant's motion to reconsider. On appeal, the defendant argued that, because the plaintiff had failed to satisfy the condition precedent in the tolling agreement, namely, that the plaintiff was required to file the lawsuit by the stipulated date, the statutes of limitation and repose were not tolled, which barred the filing of the complaint. The plaintiff responded that each amendment renewed the starting date for the statute of limitations. The Court disagreed. In Joyce, this court found that the clear, unequivocal language from the first two paragraphs of the tolling agreement demonstrated that the defendant agreed to waive its potential timeliness defenses, but only if the plaintiff complied with the condition precedent to file the complaint by the agreed date. The court held that, because the plaintiff failed to comply with the condition precedent, the defendant's potential time-related defenses were not waived. Joyce, 382 Ill. App. 3d at 637. In addition, the court noted that its decision was further supported by paragraph three of the tolling agreement, which expressly preserved the defendant's timeliness defenses if the plaintiff failed to file his complaint by the agreed date. Joyce, 382 Ill. App. 3d at 637-38. Finally, the court stated, "to accept plaintiff's argument would require this court to allow plaintiff the benefits of the first four amendments without fulfilling the requirement of filing suit by the specified dates imposed by any of the amendments." Joyce, 382 Ill. App. 3d at 638.