American Home Assurance Co. v. Golomb

606 N.E.2d 793, 239 Ill. App. 3d 37, 179 Ill. Dec. 961
CourtAppellate Court of Illinois
DecidedFebruary 4, 1993
Docket4-92-0423
StatusPublished
Cited by20 cases

This text of 606 N.E.2d 793 (American Home Assurance Co. v. Golomb) is published on Counsel Stack Legal Research, covering Appellate Court of Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
American Home Assurance Co. v. Golomb, 606 N.E.2d 793, 239 Ill. App. 3d 37, 179 Ill. Dec. 961 (Ill. Ct. App. 1993).

Opinion

JUSTICE COOK

delivered the opinion of the court:

On December 16, 1991, the circuit court of Sangamon County dismissed defendant and third-party plaintiff Wayne R. Golomb’s complaint seeking attorney fees, holding that Illinois law prohibits an attorney from recovering fees under a theory of quantum meruit where the parties’ original contingent-fee agreement was an illegal contract and against public policy. Golomb appeals, contending (1) a discharged attorney is entitled to recover the reasonable value of his services performed prior to his discharge, and (2) the trial court erred in holding the contingent-fee agreements barred his quantum meruit claim for fees. We affirm.

On February 6, 1987, third-party defendant Vicki Kammeyer (Vicki) signed an “AGREEMENT TO EMPLOY ATTORNEY” wherein she requested Golomb to represent her “in the prosecution of a claim against Roy Hankins, M.D.[,] arising out of an occurrence on or about 1983-1986.” The agreement required Vicki to pay Golomb a retainer of $500, 40% of any amount recovered, and his expenses plus interest of 2% per month calculated from the date incurred. The agreement also provided Golomb would receive 50% of any amount recovered if a second trial or appeal was required.

On or about September 9, 1987, Vicki’s husband, defendant Bruce Kammeyer (Bruce), signed an “AGREEMENT TO EMPLOY ATTORNEY” wherein he requested Golomb to represent him “in the prosecution of a claim against Roy Hankins, M.D.[,] and any other persons or entities, arising out of an occurrence on or about 1983-1986.” This agreement contained three payment options. The first option provided the client would pay Golomb on an hourly basis. The second option was a contingent-fee agreement with Golomb to receive one-third of any amount up to $150,000, 25% of the next $850,000, and 20% of any amount above $1 million; this option required the client to provide his own qualified medical expert. The third option was also a contingent-fee agreement, but with Golomb to receive 40%, which included Golomb’s services in finding and retaining a qualified medical expert. This third option contained an indemnification clause which required the client to “waive any and all rights under the fee structure set by law for attorney’s fees in malpractice cases, and agree to hold Wayne R. Golomb harmless for any loss or diminution of fee he may receive as a result of the aforesaid law.” All contingent-fee options required the client to pay a contingent fee of 50% if a second trial or appeal was necessary and pay Golomb’s expenses; the first and second option also required the client to pay interest on the expenses of 2% per month calculated from the date incurred. Bruce chose the third payment option, the 40% contingent fee with Golomb providing the expert.

On September 25, 1987, Vicki signed a second contingent-fee agreement which contained three payment options and was in a form similar to the one signed by Bruce. Vicki chose the third option, the 40% contingent fee with Golomb providing the expert. At this point we note that different rules apply to fee contracts entered into before the attorney-client relation has begun and those entered into after it has begun. When an attorney enters into a transaction with a client, after the attorney has been retained, it is presumed that the attorney exercised undue influence. (In re Marriage of Pagano (1992), 154 Ill. 2d 174, 185.) We need not address that presumption, however, in order to decide this case.

After Golomb was retained to represent Vicki in the case, he states he “conducted an extensive investigation of the facts of the case”; “prepared numerous pleadings and responses”; “appeared in court on numerous times”; “negotiated settlement”; and “prepared the case to the point that it was ready to go to trial.” While Golomb was representing the Kammeyers, he received a settlement offer of $150,000, memorialized in a letter dated April 10, 1990. Thereafter Bruce and Vicki discharged Golomb as their attorney and reached a settlement agreement with plaintiff American Home Assurance Company (Dr. Hankins’ insurance carrier) under which Bruce would receive $15,000 and Vicki would receive $100,000. On July 24, 1991, plaintiff filed a “COMPLAINT IN CHANCERY (INTER-PLEADER),” seeking to interplead the sum of $15,000 which it had agreed to pay Bruce, but which was subject to an attorney’s lien filed by Golomb. Bruce denied Golomb was entitled to any of the proceeds.

Golomb filed an answer, counterclaim, and third-party complaint. Golomb claimed to be entitled to a reasonable fee for services rendered to Bruce and Vicki under a theory of quantum meruit. Golomb’s counterclaim against Bruce stated that Golomb was entitled to $42,817.50 in attorney fees, and costs and expenses totalling $6,113.43, plus interest of 2% per month calculated from July 2, 1991. Golomb also filed a third-party complaint against Vicki seeking $17,003.50 in attorney fees and $2,052.61 in costs and expenses. Golomb claimed to be entitled to the entire sum interpleaded and sought judgment against Bruce and Vicki for any deficiency.

Bruce filed a motion to dismiss the counterclaim pursuant to section 2 — 619 of the Code of Civil Procedure (Code) (Ill. Rev. Stat. 1991, ch. 110, par. 2—619). Vicki filed a similar motion the same day. The court granted the motions to dismiss, stating the “Court finds the contingent fee agreement to be an illegal contract and against public policy and therefore] void. Illinois law prohibits recovery of attorney’s fees pursuant to contract or on a quantum meruit basis where the contingent fee contract giving rise to the parties’ relationship is illegal.” Golomb filed a motion for reconsideration, and on March 16, 1992, the trial court granted a portion of Golomb’s motion to allow him to recover costs and expenses. The remaining portions of the motion were denied.

In Illinois, a client has the right to discharge his attorney at any time with or without cause. Ordinarily, an attorney is entitled to recover an amount equal to the reasonable value of his services in quantum meruit if he is discharged and the contingent-fee contract under which he was employed is broken. (See Rhoades v. Norfolk & Western Ry. Co. (1979), 78 Ill. 2d 217, 229-30, 399 N.E.2d 969, 974-75.) Bruce and Vicki cite Leoris v. Dicks (1986), 150 Ill. App. 3d 350, 501 N.E.2d 901, and Licciardi v. Collins (1989), 180 Ill. App. 3d 1051, 536 N.E.2d 840, for the further proposition that an attorney’s recovery in quantum meruit may be barred if an attorney has engaged in illegal conduct. In Leoris a fee-splitting agreement between attorneys violated a public policy, later codified in Rule 2 — 107 of the disciplinary rules of the Code of Professional Responsibility (87 Ill. 2d R. 2—107), that a division of fees be based upon the sharing of services and responsibilities. Not only was the agreement unenforceable, the attorney was also denied recovery in quantum meruit.

“Where enforcement of an illegal contract is sought, the courts will aid neither party but will leave them where they have placed themselves since the parties are pari delicto and can recover nothing under the contract. [Citation.] Therefore, we find that plaintiff is foreclosed from recovery on the theory of quantum meruit because unprofessional conduct, as exhibited here, clearly violated stated canons of ethics that bar recovery.

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Cite This Page — Counsel Stack

Bluebook (online)
606 N.E.2d 793, 239 Ill. App. 3d 37, 179 Ill. Dec. 961, Counsel Stack Legal Research, https://law.counselstack.com/opinion/american-home-assurance-co-v-golomb-illappct-1993.