## Facts

- West Bend Mutual Insurance Company insured an employer whose employee, John Marzano, filed a workers’ compensation claim in 2005.
- West Bend retained the law firm Roddy, Leahy, Guill & Zima, Ltd. to defend the claim, with attorney Paul W. Schumacher primarily responsible.
- West Bend alleged Schumacher failed to investigate Marzano’s claim and preexisting medical condition, failed to depose Marzano’s medical expert, and failed to secure key witnesses before the hearing.
- West Bend alleged Schumacher disclosed West Bend’s defense theory and represented that West Bend would accept liability without authorization.
- West Bend alleged Schumacher stipulated or conceded that Marzano’s injury was compensable, increasing West Bend’s exposure and limiting its defenses.
- West Bend claimed it made significant payments (including temporary total disability benefits and medical expenses) and entered a settlement to cap exposure on worse terms than would otherwise have been available.
- West Bend filed a malpractice action in 2008; the parties later dismissed it and entered a tolling agreement pending resolution of related matters.
- West Bend filed a new malpractice action in 2013 in federal court; its second amended complaint asserted, in general terms, that it lost factual defenses and a medical causation defense and “had to pay more money,” without specifying what the defenses were or how the result would have been different.

## Issues

1. Whether the second amended complaint plausibly pleaded Illinois legal malpractice, particularly but-for causation and actual damages, sufficient to survive dismissal under Federal Rule of Civil Procedure 12(b)(6).
2. Whether conclusory allegations that counsel’s conduct “forced” an unfavorable settlement and increased payments satisfy Twombly/Iqbal plausibility when the complaint does not describe the underlying defenses or a more favorable alternative outcome.

## Decision

- The Seventh Circuit affirmed dismissal of the second amended complaint under Rule 12(b)(6).
- The court held West Bend did not plausibly allege proximate causation and harm/damages required for Illinois legal malpractice.
- The court concluded the complaint failed to describe the underlying workers’ compensation claim and failed to identify the factual and medical causation defenses with enough detail to show they would likely have improved the outcome.
- The court held West Bend did not connect specific alleged litigation missteps (e.g., not deposing a doctor, not contacting witnesses, stipulating to compensability) to a concrete, worse financial result compared to a plausible alternative outcome.

## Legal Principles

- Under Illinois law, legal malpractice requires pleading and proving duty (attorney-client relationship), breach, proximate causation, and actual damages.
- Causation requires plausible allegations that, but for the attorney’s negligence, the result in the underlying matter would have been more favorable (the “case within a case” concept).
- Under Twombly/Iqbal, a complaint must include enough factual content to make entitlement to relief plausible; conclusory statements and element recitations, especially on causation and damages, are insufficient.

## Conclusion

The Seventh Circuit held that a malpractice plaintiff must plead specific facts showing how counsel’s alleged errors altered the underlying case’s outcome and produced measurable financial harm; generalized assertions of lost defenses and an “unfavorable settlement” without factual support do not state a plausible claim under Illinois malpractice law in federal court.


West Bend Mut. Ins. Co. v. Schumacher, 844 F.3d 670 (7th Cir. 2016)