West Bend Mutual Insurance Co v. Paul Schumacher

In the

United States Court of Appeals For the Seventh Circuit ____________________ No. 14‐2731 WEST BEND MUTUAL INSURANCE COMPANY, Plaintiff‐Appellant,

v.

PAUL W. SCHUMACHER, et al., Defendants‐Appellees. ____________________

Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 1:13‐cv‐04986 — Ronald A. Guzmán, Judge. ____________________

ARGUED OCTOBER 30, 2015 — DECIDED DECEMBER 21, 2016 ____________________

Before POSNER, RIPPLE, and HAMILTON, Circuit Judges. RIPPLE, Circuit Judge. In 2013, West Bend Mutual Insurance Co. (“West Bend”) brought this legal malpractice action against its former counsel, Paul Schumacher, and his law firm, Roddy, Leahy, Guill & Ziema, Ltd. (“RLGZ”). The gra‐ vamen of the complaint is Mr. Schumacher’s alleged perfor‐ mance in defending a workers’ compensation claim in 2005 and 2006. The district court dismissed the second amended complaint on the defendant’s 12(b)(6) motion and terminated

2  No. 14‐2731

the case. In the district court’s view, the complaint failed to set forth with sufficient specificity a cause of action for legal malpractice. We agree; the complaint fails to state plausibly the causation and harm elements required under Illinois legal malpractice law. Accordingly, we affirm the judgment of the district court.

I BACKGROUND West Bend first filed a legal malpractice action based on the performance of Mr. Schumacher and RLGZ in the under‐ lying workers’ compensation matter in 2008. The parties later agreed to a dismissal of that claim and entered into a tolling agreement pending the resolution of several other tangen‐ tially related actions, including one for medical malpractice. Following the resolution of those claims, West Bend brought the present action in the United States District Court for the Northern District of Illinois in July 2013, and filed an amended complaint in December 2013. After each of these fil‐ ings, the defendants moved to dismiss. The district court granted each of the motions, concluding that the allegations were too speculative or vague. In each case, however, the court also granted leave to amend.

A. The allegations of the Second Amended Complaint are central to our task. We therefore begin with a rendition of its contents.

No. 14‐2731  3

In December 2005, West Bend retained RLGZ to provide legal representation with respect to a workers’ compensation claim filed by John Marzano against West Bend’s insured, Nelson Insulation. The substance of Marzano’s claim is not described. Mr. Schumacher was the attorney with principal responsibility for defending against the Marzano claim. After several continuances, including one requested by Mr. Schu‐ macher, the Illinois Workers’ Compensation Commission (“IWCC”) scheduled a hearing on the matter for August 23, 2006. According to the complaint, Marzano supported his claim with the deposition of his treating physician, Dr. Sheinkop. He also had undergone an independent medical examination by Dr. Nelson, who provided a written report. This report in‐ dicated that Dr. Nelson’s testimony would be favorable to West Bend and would counter Dr. Sheinkop’s opinion. In his preparation for the scheduled August hearing, Mr. Schu‐ macher did not speak to or depose Dr. Nelson. Instead, with‐ out seeking the approval of West Bend, he agreed with Mar‐ zano’s counsel to put a redacted version of Dr. Nelson’s report in evidence. Mr. Schumacher also did not speak to any other witnesses or potential witnesses until the day before the scheduled hearing; he then learned that a witness with rele‐ vant testimony was out of town and would not be available to testify the following day. Prior to the hearing, Mr. Schumacher possessed other in‐ formation that was beneficial to West Bend’s defense, includ‐ ing that Marzano worked a full day on the day of the alleged incident, that he continued to work for two additional weeks until he was laid off, and that his own treating physician

4  No. 14‐2731

could not find any change in the condition of his knee follow‐ ing the incident. Mr. Schumacher disclosed all of this infor‐ mation, favorable to his client, to Marzano’s counsel prior to the hearing. Documents also indicated that Marzano had not reported the incident until after he was laid off and had retained an attorney. But Mr. Schumacher did not investigate Marzano’s contrary statements and did not verify them with Marzano’s former supervisor, to whom the incident report allegedly had been made. On the day of the IWCC hearing, Mr. Schumacher did not request a continuance or a bifurcated proceeding to allow for the presentation of additional evidence. Instead, “without [West Bend]’s knowledge or agreement,” Mr. “Schumacher made the representation to counsel for [Marzano] that [West Bend] would accept liability of the workers’ compensation claim”¹ and the arbitrator was “advised of that position.”2 West Bend claims that it “was forced to accept that agreement pending further investigation of other litigation options.”3 The complaint further alleges that, as a result of Mr. “Schumacher’s unauthorized actions and representations to [West Bend], [West Bend] was forced to make significant payments, including temporary total disability [(“TTD”)] benefits and medical expenses, with little or no likelihood of

1 R.71 at 4. 2 Id. at 5. 3 Id. No. 14‐2731  5

recovery.”4 To “justify his concession of compensability, de‐ fendant Schumacher overemphasized” to his client “the po‐ tential for penalties to [West Bend] if the hearing had gone forward.”5 Mr. Schumacher “continued to counsel [West Bend] against getting the case reopened to present its de‐ fenses as he believed the case was indefensible.”6 According to the complaint, West Bend alleged that Mr. Schumacher breached duties to West Bend by virtue of “(a) his unauthorized stipulation concerning compensability; (b) his failure to adequately investigate the claim or claimant’s preexi[s]ting medical condition; (c) his subsequent represen‐ tations to [West Bend] regarding their litigation options[;] and (d) his failure to adequately advise [West Bend] of material facts and legal options prior to hearing.”7 The specific allega‐ tions also concerned Mr. Schumacher’s failure to depose Dr. Nelson, his disclosure to Marzano’s counsel of infor‐ mation beneficial to West Bend, and his failure to discover and remedy the unavailability of a relevant witness for the hearing. All of these, West Bend alleged, resulted in its being “forced to accept a disadvantageous position which greatly compromised its ability to defend the claim.”8 It also was “forced to pay additional sums and eventually chose to reach a disputed settlement in order to mitigate its exposure”:

4 Id. 5 Id. 6 Id. 7 Id. 8 Id. 6  No. 14‐2731

[a]lthough [West Bend] technically had the op‐ tion of contesting the compensability of the claim or filing a motion to terminate benefits af‐ ter retaining new counsel, those options were not practical as plaintiff had been paying bene‐ fits for some time and the Commission was un‐ likely to und[o] or reverse such payments. In other words, [West Bend]’s payment of benefits up to that point severely prejudiced its capabil‐ ity to reverse the concession by defendant Schu‐ macher.[9] The complaint further alleged that even if the Commission had determined that West Bend was not liable, it was “ex‐ tremely unlikely” that it would require repayment of prior benefits, and, if it did, “collection of those funds would have been difficult if not impossible.”10

B. In its July 18, 2014 order granting the motion to dismiss the Second Amended Complaint, the district court deter‐ mined that, with respect to the bulk of West Bend’s allega‐ tions about Mr. Schumacher’s performance—including the failure to depose Dr. Nelson, the failure to contact witnesses prior to the hearing, and the disclosure of certain facts to Mar‐ zano’s counsel—West Bend’s complaint “does not … explain

9 Id. at 5–6. 10 Id. at 6. No. 14‐2731  7

how any of these alleged acts and omissions harmed its de‐ fense.”11 With respect to the allegation that Mr. Schumacher had represented that West Bend would accept liability, the district court stated: Though Plaintiff alleges that the representation “forced [it] to … pay[] … temporary total disa‐ bility benefits and medical expenses, with little or no likelihood of recovery” and “to reach a disputed settlement in order to mitigate its ex‐ posure”, these assertions are legally and factu‐ ally unsupported. As a matter of law, paying benefits pending resolution of a claim does not preclude an employer from contesting liability. Moreover, plaintiff admits that it could have contested the claim, despite the representation. In short, because plaintiff does not and cannot allege that defendants’ representation was the cause of any damages it may have suffered, the representation cannot support a malpractice claim.[12] The court therefore granted the motion, and, because it had concluded that West Bend had failed to state a claim in three successive complaints, it terminated the case. West Bend now appeals.

11 R.80 at 3. 12 Id. at 3–4 (alterations in original) (citations omitted). 8  No. 14‐2731

II DISCUSSION A. We begin by setting out the principles that must govern our assessment of the Second Amended Complaint.

1. We review a district court’s dismissal under Rule 12(b)(6) de novo. Bible v. United Student Aid Funds, Inc., 799 F.3d 633, 639 (7th Cir. 2015). We, like the district court, must “accept as true all factual allegations in the amended complaint and draw all permissible inferences in [the plaintiff]’s favor.” Id. A complaint will survive a 12(b)(6) motion if, after the court disregards any portions that are “no more than conclusions,” it “contain[s] sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678–79 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial plausi‐ bility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678. “‘Plausibility’ is not a synonym for ‘probability’ in this context, but it asks for ‘more than a sheer possibility that a defendant has acted unlawfully.’” Bible, 799 F.3d at 639 (quoting Olson v. Cham‐ paign Cty., 784 F.3d 1093, 1099 (7th Cir. 2015)). After Twombly and Iqbal, a plaintiff seeking to survive a motion to dismiss must “plead some facts that suggest a right to relief that is beyond the speculative level.” In re marchFIRST Inc., 589 F.3d 901, 905 (7th Cir. 2009) (internal quotation marks omitted).

No. 14‐2731  9

That is, “[w]hile a plaintiff need not plead detailed factual al‐ legations to survive a motion to dismiss, she still must pro‐ vide more than mere labels and conclusions or a formulaic recitation of the elements of a cause of action for her com‐ plaint to be considered adequate.” Bell v. City of Chicago, 835 F.3d 736, 738 (7th Cir. 2016) (internal quotation marks omit‐ ted). We have interpreted the standard announced by the Su‐ preme Court as requiring that “the plaintiff … give enough details about the subject‐matter of the case to present a story that holds together. In other words, the court will ask itself could these things have happened, not did they happen.” Swanson v. Citibank, N.A., 614 F.3d 400, 404 (7th Cir. 2010) (em‐ phasis in original). In the end, “the plausibility determination is ‘a context‐specific task that requires the reviewing court to draw on its judicial experience and common sense.’” McCauley v. City of Chicago, 671 F.3d 611, 616 (7th Cir. 2011) (quoting Iqbal, 556 U.S. at 679).

2. Because federal jurisdiction over this action is premised on diversity of citizenship, see 28 U.S.C. § 1332, we must look to the law of the state in which the district court sits to determine the applicable governing law. Erie R.R. Co. v. Tompkins, 304 U.S. 64, 79–80 (1938). The parties agree that Illinois law gov‐ erns the elements of this legal malpractice action. The Su‐ preme Court of Illinois has stated succinctly that a cause of action for legal malpractice includes the following elements: (1) the existence of an attorney‐client relationship that estab‐ lishes a duty on the part of the attorney, (2) a negligent act or

10  No. 14‐2731

omission constituting a breach of that duty, (3) proximate cause of injury, and (4) actual damages. See Sexton v. Smith, 492 N.E.2d 1284, 1286–87 (Ill. 1986). Illinois courts have described the State’s legal malpractice cause of action as following a case‐within‐a‐case model: A legal malpractice suit is by its nature depend‐ ent upon a predicate lawsuit. Thus, a legal mal‐ practice claim presents a case within a case. [N]o malpractice exists unless counsel’s negli‐ gence has resulted in the loss of an underlying cause of action, or the loss of a meritorious de‐ fense if the attorney was defending in the un‐ derlying suit. Nelson v. Quarles & Brady, LLP, 997 N.E.2d 872, 880 (Ill. App. Ct. 2013) (alteration in original) (emphasis in original) (cita‐ tions omitted) (internal quotation marks omitted).13 There‐ fore, in assessing the sufficiency of a complaint of legal mal‐ practice we must focus on the underlying claim. See Claire Assocs. by Livaditis v. Pontikes, 502 N.E.2d 1186, 1190 (Ill. App. Ct. 1986). The plaintiff must set forth a plausible statement not only that a breach of duty occurred but that the breach caused the plaintiff to lose a valid claim or defense in the underlying action and that, absent that loss, the underlying claim “would

13 Most cases identify the loss of a meritorious claim or defense as a part

of the element of proximate causation. However, some frame it as part of the element of damages. See, e.g., Bartholomew v. Crockett, 475 N.E.2d 1035, 1041 (Ill. App. Ct. 1985) (“[D]amage is an element of a professional mal‐ practice claim that is not presumed, [and plaintiff] bears the burden of pleading and proving that damages resulted. This burden entails estab‐ lishing that ‘but for’ the attorneys’ negligence, the client would have suc‐ cessfully defended or prosecuted the underlying suit.”).

No. 14‐2731  11

have been successful.” Fabricare Equip. Credit Corp. v. Bell, Boyd & Lloyd, 767 N.E.2d 470, 474 (Ill. App. Ct. 2002).14 “These ele‐ ments effectively demand that the malpractice plaintiff pre‐ sent two cases, one showing that her attorney performed neg‐ ligently, and a second or predicate ‘case within a case’ show‐ ing that she had a meritorious claim [or defense] that she lost due to her attorney’s negligence.” Mihailovich v. Laatsch, 359 F.3d 892, 904–05 (7th Cir. 2004).

B. Having stated the principles that govern our inquiry, we now apply these principles to the particular circumstances of this case. There is no dispute that West Bend has described ade‐ quately the duty element in its malpractice claim. Nor is there any disagreement about the adequacy of West Bend’s narra‐ tive with respect to the alleged attorney conduct constituting a breach of that duty. In that respect, West Bend alleges that Mr. Schumacher, having assumed responsibility for the de‐ fense of the claim, failed to prepare adequately for the hear‐ ing, revealed inappropriately the defense theory of the case to

14 Cf. Fox v. Seiden, 887 N.E.2d 736, 746 (Ill. App. Ct. 2008) (noting that, to

satisfy the element of proximate causation in a legal malpractice action, “the plaintiff must plead sufficient facts to establish that ‘but for’ the neg‐ ligence of the attorney, the client would have successfully defended the un‐ derlying suit” (emphasis added)); Ignarski v. Norbut, 648 N.E.2d 285, 289 (Ill. App. Ct. 1995) (holding that the plaintiff’s burden to plead a case within a case was not satisfied where the pleadings did not “plead ulti‐ mate facts establishing” its entitlement to relief on its predicate claim).

12  No. 14‐2731

Marzano’s counsel, and then, without authorization, con‐ ceded liability for Marzano’s workers’ compensation claim.15 The allegations with respect to causation and damages present, however, significant concerns. At the outset, we note that the treatment by the Second Amended Complaint of the underlying workers’ compensation claim, which, as we have explained, is central to an assessment of causation and dam‐ ages, is markedly different from the treatment of Mr. Schu‐ macher’s alleged litigation conduct. While the complaint de‐ scribes the conduct in some detail, it describes the underlying workers’ compensation claim in rather summary fashion. Specifically, while the complaint identifies the injured party as John Marzano, it tells us nothing about his claimed injury or his claim against his employer. Instead, it summarily states that “[p]rior to August 2006, there existed certain factual de‐ fenses and a medical causation defense to the Marzano claim.”16 West Bend’s brief on appeal invites our attention to para‐ graph 25 of the Second Amended Complaint as “set[ting] forth [its] factual allegations concerning defendants’ breach of

15 The briefs and the oral argument included significant argument about

what precisely Mr. Schumacher conceded. West Bend asserts that he con‐ ceded liability on the whole claim. The defendants assert that he simply agreed to pay TTD benefits and the question of final liability remained open until 2010. They ask the court to notice the terms of the eventual set‐ tlement agreement reached in the case, which state that no admission of liability has been made by the employer. In their view, we can notice this document as a public record and disregard the contrary allegation, despite our general obligation to take the allegations of the complaint as true un‐ der Rule 12(b)(6). We decline to resolve this dispute because for the rea‐ sons stated below, we find that the claim, even as alleged, is insufficient to survive dismissal. 16 R.71 at 2 (emphasis added).

No. 14‐2731  13

duty, proximate cause and damages.”17 That paragraph of the complaint contains an abbreviated description of Mr. Schu‐ macher’s claimed errors, but, with respect to the crucial ele‐ ments of causation and damages, says only that West Bend “was forced to accept a disadvantageous position which greatly compromised its ability to defend the claim.”18 This same sort of general language appears in paragraph 28; there West Bend refers to a loss of “valuable factual and legal defenses that would have eliminated or substantially reduced any liability of [West Bend] to the claimant.”19 These allegations are conclu‐ sory assertions and certainly do not set forth a plausible de‐ scription of a lost defense that, absent Mr. Schumacher’s al‐ leged neglect, would have assured West Bend’s success on the underlying claim. Iqbal, 556 U.S. at 678–79. West Bend has not invited our attention to any other fac‐ tual allegations which detail the “valuable factual and legal defenses” lost because of Mr. Schumacher’s litigation con‐ duct. In its appellate brief, West Bend does assert that it “is prepared to offer evidence that, had defendants not commit‐ ted the breaches from the standard of care, the Marzano claim would likely have gone in an entirely different direction,” and indeed, that “there is a strong likelihood [that] West Bend could have either won the entire case or significantly reduced the amount of money it ultimately paid.”20 But again, even now, it does not tell us what these defenses are or how they

17 Appellant’s Br. 18. 18 R.71 at 5 (emphasis added). 19 Id. at 6 (emphasis added). 20 Appellant’s Br. 19. 14  No. 14‐2731

would have produced near or total success in workers’ com‐ pensation proceedings.21 The complaint’s description of Mr. Schumacher’s conduct does include an allegation that, prior to the date of the sched‐ uled workers’ compensation hearing, defendant Schumacher possessed other docu‐ mentation and information to support a denial of compensabil[i]ty [of the Marzano claim], in‐ cluding: (a) the claimant’s completion of the day’s work on the day of the alleged incident; (b) the fact that the claimant continued to work following the alleged incident for an additional two weeks until he was laid off on September 28, 2005; and (c) the fact that the claimant’s own treating physician, Dr. Sheinkop, could not find any change in the condition of his knee after the alleged incident, as it had already been deter‐ mined that the claimant was in need of knee re‐ placement surgery.[22]

21 We have held that “[w]e may consider new factual allegations raised

for the first time on appeal provided they are consistent with the com‐ plaint.” Smoke Shop, LLC v. United States, 761 F.3d 779, 785 (7th Cir. 2014) (internal quotation marks omitted); see also Hrubec v. Natʹl R.R. Passenger Corp., 981 F.2d 962, 963–64 (7th Cir. 1992) (noting that new facts may be added by affidavit or brief, even an appellate brief). Moreover, we have applied the rule even where a party has amended the complaint in the district court in an attempt to remedy deficiencies. See generally Smoke Shop, LLC, 761 F.3d 779; Highsmith v. Chrysler Credit Corp., 18 F.3d 434, 439– 40 (7th Cir. 1994) (finding new allegations raised on appeal and not in‐ cluded in previously amended pleadings sufficient to defeat dismissal). 22 R.71 at 3–4.

No. 14‐2731  15

It also asserts that an unspecified “witness with relevant tes‐ timony” was not available to testify and complains that Mr. Schumacher did not request a continuance.23 It continues by faulting Mr. Schumacher for “reveal[ing] all of this docu‐ mentation and information—all the key theories of [West Bend]’s defense—to counsel for claimant, which severely compromised [West Bend’s] ability to continue to defend the workers’ compensation claim.”24 We are given no description, however, as to whether or how this evidence would have pro‐ duced a successful outcome for West Bend. With respect to the allegation that Mr. Schumacher had stipulated improperly to the compensability of the claim, West Bend at least makes the allegation that it was required to pay substantial amounts of money because of the stipula‐ tion. But it makes no concrete allegation that its final liability in this matter would have been any different if the stipulation had not occurred. The Second Amended Complaint therefore leaves us to speculate as to whether and how West Bend would have pre‐ vailed on the underlying claim in the absence of the missteps of which it now accuses its former attorney. But, as our col‐ league in the district court recognized throughout West Bend’s several attempts to improve the complaint, a plaintiff “must plead some facts that suggest a right to relief that is beyond the speculative level.” In re marchFIRST Inc., 589 F.3d

23 Id. at 3. 24  Id.  at  4. We note  in  passing  that  the alleged  harmful “disclosures”  of

facts all reference facts clearly already known to the claimant, i.e., that he continued working for a time and that his physician had made a prior di‐ agnosis.

16  No. 14‐2731

at 905 (internal quotation marks omitted). The district court correctly concluded that the allegations that deal with the substance of the underlying compensation claim and defense fall short of that standard because they provide no plausible description as to how the attorney’s negligence, if it occurred, was the cause of harm to West Bend. Even when evaluated as a whole, the complaint fails to describe, in even the most ru‐ dimentary of ways, “that but for [Mr. Schumacher’s] negli‐ gence, the plaintiff would have been successful in th[e] under‐ lying” workers’ compensation action. Tri‐G, Inc. v. Burke, Bosselman & Weaver, 856 N.E.2d 389, 395 (Ill. 2006). West Bend simply has failed to allege plausibly, despite multiple amend‐ ments, that it lost actual, specific, meritorious defenses in the Marzano claim because of Mr. Schumacher’s conduct.

Conclusion The Second Amended Complaint fails to plead adequately a claim for legal malpractice under Illinois law. Specifically, it fails to allege plausibly that the outcome of the underlying ac‐ tion would have been more favorable to West Bend, had it not been for Mr. Schumacher’s alleged litigation conduct. We therefore affirm the judgment of the district court. AFFIRMED

No. 14‐2731  17

HAMILTON, Circuit Judge, dissenting. The majority accu‐ rately describes the general legal principles that apply to post‐ Iqbal federal pleading and to legal malpractice claims in Illi‐ nois. I must respectfully dissent, however, from the majority’s application of those principles. The majority applies the post‐ Iqbal pleading standards so stringently as to reinstate, in effect if not in name, the obsolete code pleading regime replaced by the Federal Rules of Civil Procedure in 1938. See generally Ar‐ thur R. Miller, From Conley to Twombly to Iqbal: A Double Play on The Federal Rules of Civil Procedure, 60 Duke L.J. 1 (2010). The majority’s application is so stringent that it runs afoul even of Iqbal itself. I would reverse the dismissal of the action. The majority acknowledges that plaintiff has alleged suf‐ ficiently that defendant Schumacher owed it a duty of profes‐ sional care and breached that duty. Ante at 11. Those points are clearly correct. Schumacher conceded his client’s liability for the claimant’s worker’s compensation claim without his client’s consent. He also did so without having taken basic steps to learn the relevant facts. At this stage of this federal case, we must assume these allegations are true. The majority tells us that what is missing is “a plausible description of a lost defense that, absent Mr. Schumacher’s al‐ leged neglect, would have assured West Bend’s success on the underlying claim.” Ante at 13, citing Iqbal. I must respectfully disagree. The path of an available defense was quite clear. In the operative complaint and its briefs to the district court and this court, West Bend makes specific factual allegations show‐ ing a solid defense on the merits. The claimant sought com‐ pensation for a workplace injury to his knee. The complaint alleged that at the time Schumacher conceded liability with‐ out his client’s consent, he knew the following:

18  No. 14‐2731

 the claimant completed work on the day of his al‐ leged injury.  after the alleged injury, the claimant continued to work another two weeks, until he was laid off.  before the alleged workplace knee injury, the claim‐ ant’s physician had already determined that the claimant needed knee replacement surgery.  the claimant’s own treating physician could not find any change in condition in the claimant’s knee after the alleged workplace knee injury.  available documents indicated that the claimant did not report the alleged workplace injury when it supposedly happened or even until well after he was laid off and had retained an attorney. See Second Amended Cplt. ¶¶15, 17; Dkt. No. 77 at 4 (Mem. in Opp. to Motion to Dismiss); Appellant’s Br. at 5. Those fac‐ tual allegations surely provide “a plausible description of a lost defense”: there was no workplace injury at all, or certainly not one that required surgery that the claimant’s own physician had already said he needed before the alleged injury. The majority acknowledges these allegations, ante at 14– 15, but complains that we “are given no description as to whether or how this evidence would have produced a suc‐ cessful outcome for West Bend,” and that we are left to “spec‐ ulate as to whether and how West Bend would have prevailed on the underlying claim….” Ante at 15. There is nothing speculative about the defenses that Schu‐ macher abandoned for his client by conceding liability. They are easy to see. If in fact the claimant had already been told

No. 14‐2731  19

that he needed a knee replacement, or if in fact the claimed workplace injury was not reported at the time and did not prevent the claimant from continuing to work both that day and for weeks afterward, a trier of fact could find as a matter of fact that there simply was no compensable workplace in‐ jury.1 West Bend may or may not be able to prove its allegations, but these allegations go far beyond “threadbare recitals of the elements of a cause of action, supported by mere conclusory statements.” See Iqbal, 556 U.S. at 678, citing Twombly, 550 U.S. at 555. From West Bend’s detailed factual allegations, a judge can easily draw on her “experience and common sense,” Iqbal, 556 U.S. at 679, to conclude that West Bend has alleged plau‐ sibly that Schumacher’s breaches of his professional duty in‐ jured West Bend and support a claim for legal malpractice. In parsing the complaint the majority has focused on the general language in the complaint, criticized it for being “con‐ clusory,” and then overlooked the supporting details. In my view the complaint is far more detailed than necessary, but it is surely at least sufficient. See, e.g., Runnion v. Girl Scouts of Greater Chicago and Northwest Indiana, 786 F.3d 510, 517–18 (7th Cir. 2015) (reversing dismissal), citing Johnson v. City of Shelby, 574 U.S. ___, 135 S. Ct. 346 (2014) (summarily reversing appel‐ late dismissal on the pleadings); see also Erickson v. Pardus, 551 U.S. 89, 93–94 (2007) (summarily reversing dismissal on

20  No. 14‐2731

pleadings for supposed failure to alleged injury and causa‐ tion). As the Supreme Court explained in Johnson, five years af‐ ter Iqbal was decided: “Petitioners stated simply, concisely, and directly events that, they alleged, entitled them to dam‐ ages from the [defendant]. Having informed the [defendant] of the factual basis for their complaint, they were required to do no more to stave off threshold dismissal for want of an ad‐ equate statement of their claim.” 574 U.S. at ___, 135 S. Ct. at 347. Finally, one of defendants’ causation arguments deserves some specific attention. Defendants argue that the complaint and Illinois law of workers’ compensation show that West Bend remained free, after replacing Schumacher, to contest its liability on the claim. The defense theory is that Schumacher’s breaches of professional duty could not have been proximate causes of West Bend’s alleged losses. Appellees’ Br. at 30–33. This defense theory cannot be accepted on the pleadings for any of four independently sufficient reasons. First, as de‐ fendants conceded at oral argument, in reviewing only the pleadings, we must assume that Schumacher’s concession of liability applied to the entire case, not just to interim pay‐ ments at the early stages of the case. Second, even if the unau‐ thorized concession was limited to the interim payments, West Bend has alleged that the concession caused it to make substantial interim payments that it could not recover. Third, even if West Bend retained the theoretical ability to contest liability after the unauthorized concession, it has alleged that it lost that ability to do so as a practical matter given the real‐ ities of the workers’ compensation system. Fourth, West Bend

No. 14‐2731  21

claims that Schumacher himself advised it against taking ex‐ actly the course that Schumacher now claims that West Bend should have pursued. I cannot judge from the pleadings West Bend’s prospects for ultimate success, but it has surely alleged a plausible claim that should proceed past the pleading stage. I respectfully dis‐ sent.

Footnotes

[1] Given these allegations, I do not understand the majority’s assertion that “even now [West Bend] does not tell us what these defenses are or how they would have produced near or total success in workers’ compen‐ sation  proceedings.” Ante at  13–14.  At  the  pleading stage,  what  further detail is needed?