T
he Habitat Co. is suing the Chicago Housing Authority (CHA) and two of its attorneys, alleging breach of contract and legal malpractice in a lead poisoning lawsuit brought by two residents. The suit claims CHA failed to properly defend Habitat during the trial, including neglecting to advise them of a conflict of interest in CHA's representation. As a result, CHA allegedly reneged on an agreement to defend and indemnify Habitat, exposing them to significant liability and forcing them to incur substantial attorney fees and costs.

    The lawsuit follows a January jury decision that ordered CHA to pay over $24 million to the two residents who sued over alleged lead paint poisoning of their children. Habitat had managed the property where the children lived as part of its contract with CHA, but was found not liable for the children's injuries.

    CHA is currently undergoing a significant transition, with several executive leaders leaving the agency in recent months. A spokesperson declined to comment on the pending litigation, citing confidentiality. Habitat also declined to comment, stating that "the complaint speaks for itself."

    The lawsuit alleges that CHA had known about lead-based paint at the property since 2001 but failed to disclose this information before or during Habitat's management of the property. Habitat claims that CHA used damaging testimonies from two witnesses to shift responsibility in the case from CHA to Habitat, causing a conflict of interest between the two parties.

    Habitat ended its property management agreements with CHA after nearly 40 years of partnership in November 2024, citing CHA's breach of contract and legal malpractice as the reason for termination. The lawsuit seeks to recover damages for Habitat's attorney fees and costs, which they claim have been substantial due to the termination of their contracts.