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a right that can be denied only if the brothers carry their burden of demonstrating that the sisters’ purpose
for the inspection is improper or illegitimate.”

So the brothers had it wrong when they initially denied the sisters the
requested inspection; the sisters did not have to “put forward” a “proper
purpose” for the requested inspection. The burden of showing an improper
purpose was on the brothers. However, the panel said the brothers had
tendered such a purpose in their affirmative defenses, which should not have
been stricken. Stating that the purpose of the pleadings was to “inform the
court and the parties of the legal theories relied upon and to give notice of the
factual issues which are to be tried,” the panel said the affirmative defenses did
that: “The sisters clearly understand, in factual detail, what the brothers are
alleging regarding their allegedly improper purpose in seeking inspection of the
books and records.”

As the affirmative defenses should not have been stricken and put forth a question of fact, judgment
on the pleadings was inappropriate, the court said.

LLC Counsel Owes No Duty To LLC Officer

Limited liability company (LLC) counsel who gave allegedly bad advice to the LLC cannot be sued in
malpractice by the LLC’s manager and co-owner, the Seventh Circuit U.S. Court of Appeals held recently.
Ruling in Reynolds v. Henderson & Lyman, 903 F.3d 693 (7th Cir. 2018), involving Illinois law, the
court treated the LLC as analogous to a corporation.
“Illinois courts consistently have held that neither shared interest nor shared liability gives rise to third-
party liability,” the court said. It said that simply because the LLC officers were at risk of personal liability
for following the firm’s advice did not “transform the incidental benefits” of the firm’s representation of the
LLC into direct and intended benefits for the officers. “The only time an Illinois attorney owes a duty of
care to a third party is when the attorney was hired for the primary purpose of benefitting that third party.”
In Reynolds, the firm’s bad advice allegedly caused the manager to violate federal disclosure laws
when he drafted the LLC’s financial statements.
Venturers Share Exclusivity Protection For Work Comp Claim

Each member of a joint venture shares in the exclusive-remedy protection of the Workers’
Compensation Act (820 ILCS 305), a panel of the Appellate Court’s Second District has ruled.
Acting in Hiatt v. Illinois Tool Works, 2018 IL App (2d) 170554, the panel dealt with a situation where
the claimant was employed by Western Plastics, Inc. and attempted to sue the employer’s putative joint
venturer, Illinois Tool Works. The panel said it didn’t matter who paid the worker’s comp insurance on the
project; “ITW’s duty to plaintiff, and any liability resulting from ‘the breach thereof’ . . . would . . . be
coextensive with that of the joint venture and co-venturer.” Accordingly, the exclusive-remedy provision
(820 ILCS 305/5(a)) applied.
Judi\Sharp Thinking\#164.pdf
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