An Illinois federal judge confirmed a AAA arbitrator’s finding that a legal malpractice suit was barred by the statute of limitations, finally ending a nearly 5-year old case against one of three Chicago lawyers accused of mishandling an underlying business dispute related to the ownership of a patent portfolio. (Short v. Grayson, et al, ND IL 16-cv-2150).
Siprut P.C., a Chicago-based litigation boutique, prevailed on a motion for summary judgment in a AAA arbitration earlier this year against its former client, Charles Short III. The underlying dispute arose regarding Short’s minority shareholder rights in a technology company and the company’s ownership and later sale of a patent portfolio that Short claimed was worth millions of dollars. Short alleged that the company’s majority owners defrauded him and illegally sold the patent portfolio without providing Short adequate compensation.
Siprut P.C. was the second of five law firms that represented Short in this multi-year dispute that was premised on facts that arose in 2005. Before Siprut P.C. became involved, prior counsel had filed two complaints beginning in 2010, that had both been dismissed without prejudice by an Illinois state court judge. Short then engaged Siprut PC to file a third amended complaint which was also dismissed, leading Siprut to withdraw from representing Short in 2013. Short then engaged a third law firm to file a fourth amended complaint, which was ultimately dismiss with prejudice in October 2013.
Years later, Short asserted various malpractice allegations against each of his attorneys, claiming that they failed to assert the appropriate claims against the defendant parties in the underlying lawsuit. Short sought over $100 million in damages from his lawyers. Short’s filed his claims in the U.S. District Court for the Northern District of Illinois in February 2016. However, Short’s claims against Siprut P.C. were compelled to AAA arbitration pursuant to an arbitration clause in the parties’ representation agreement. Siprut P.C. was the only firm that entered an arbitration agreement with Short, leading the case to work on a dual discovery track in arbitration and federal court litigation. After the parties conducted extensive discovery, Siprut P.C. prevailed on summary judgment in arbitration arguing that Short’s claims filed in February 2016 were barred by Illinois' two-year statute of limitations, which began to run when the state court judge dismissed the complaint with prejudice against Short’s business partners in October 2013.
The other defendants remain in federal court litigation with their own motions for summary judgment pending.
Nicholas Gowen is a trial attorney who represents Fortune 500 companies and middle market companies in commercial business disputes in courts and arbitration forums around the country. Nicholas serves as lead trial and appellate counsel in matters, including shareholder disputes, real estate litigation, trade secrets, employment matters, and other business disputes, representing global companies and entrepreneurs. Nicholas approaches litigation with an eye toward results; understanding that advancing his clients’ litigation strategies should fit within their overall business interests.
Nicholas has been honored as one of Chicago’s “Top 40 under 40 Game Changers” by Ariel Investments and The Urban Business Roundtable and selected by Crain's Custom Media as one of Chicago's Notable Minority Lawyers.