Cohen v. Meyers

253 N.E.2d 144, 115 Ill. App. 2d 286, 1969 Ill. App. LEXIS 1504
CourtAppellate Court of Illinois
DecidedSeptember 30, 1969
DocketGen. No. 53,741
StatusPublished
Cited by11 cases

This text of 253 N.E.2d 144 (Cohen v. Meyers) 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
Cohen v. Meyers, 253 N.E.2d 144, 115 Ill. App. 2d 286, 1969 Ill. App. LEXIS 1504 (Ill. Ct. App. 1969).

Opinion

MR. JUSTICE McCORMICK

delivered the opinion of the court.

Samuel Cohen and Bernard Meyers went to Florida to find land for investment purposes. When they had found a suitable site, Meyers suggested that they bring in co-investors, and they telephoned Louis El Chonen and other interested parties, advising them that they could participate and could invite others. A particular site in Florida which El Chonen had suggested earlier was found unsuitable by Cohen and Meyers and they had taken the Manatee property instead.

Cohen testified that both he and Meyers had told all the parties contacted that there would be a 10 percent finder’s fee and a 10 percent attorney’s fee, contingent upon profits resulting from the transaction. The defendants who testified stated that the first they learned of the fees was when they read the trust agreement prepared by Cohen, who acted as the attorney for the investment group.

The following provision appeared in each of the certificates of beneficial interest:

“It is further understood and agreed however that SAMUEL T. COHEN, BERNARD MEYERS and LOUIS EL CHONEN shall jointly receive during the life of this Trust an amount equal to ten-percent (10%) of any and all profits, dividends, earnings, avails and income which shall be deducted from the pro-rata amount available for distribution to the beneficiary hereunder, executors, administrators and assigns of said Certificate of Beneficial Interest in said Certificate of Shares, for services rendered in finding the Manatee County, Florida acreage, being the principal asset of this corporation and for negotiations resulting in the purchase thereof, and for managing the affairs and business of said corporation.”

Eight investors purchased 2,800 acres of Florida land at $85 an acre, and voting trust agreements were prepared by plaintiff Cohen naming himself and defendants Meyers and El Chonen as trustees. The agreements, dated March 1, 1957, were signed by the three trustees and one was signed by each beneficiary. The trusts were all stated to be for periods of twenty years and one month.

Problems apparently developed among the trustees. Cohen had made claim to a 10 percent attorney’s fee and to one-half of the 10 percent finder’s fee. When he met with resistance from all the investors on both these claims he attempted to obtain the entire 10 percent finder’s fee for himself, excluding Meyers and El Chonen. He solicited the beneficiaries (other than Meyers and El Chonen) to enter into new agreements with him wherein they would agree to pay him 10 percent of the profits in full for his claims to finder’s and attorney’s fees, in consideration of which he would agree to protect and hold them harmless against any claim by Meyers and El Chonen for their respective shares of the finder’s fee. The agreement was submitted to the beneficiaries but was not executed by them. Plaintiff did not submit a copy to either Meyers or El Chonen because, as he stated, they “were the two against whom this document may have worked.”

Plaintiff’s original complaint of October 20, 1964, sought and obtained a decree adjudging that the voting trusts which he had prepared were void and of no force and effect, since they were contrary to the specific 10-year limitation of the relevant statute.

The cause was finally referred to a master in chancery as arbitrator and many hearings were had. The arbitrator made a written award allowing plaintiff 3% percent on 45 percent of the profits of $1,638,986.93, and charged the same to the individual shareholders other than Meyers and El Chonen. The plaintiff was allowed nothing on his claim for attorney’s fees and only 3^3 percent on his claim to one-half of the 10 percent finder’s fee. The arbitrator also denied the claim of Meyers and El Chonen against the plaintiff.

Defendants’ objections to the award were overruled and the court entered the decree enforcing the award. It is from that decree that defendants appeal.

Among other things the arbitration agreement provides :

“All differences, controversies, claims, demands, complaints, counter-complaints and causes of action now pending or existing between any of the parties hereto, as set forth in the pleadings filed in said cause, and also all other disputes and differences that may hereafter arise between such parties relating to the subject matter of said litigation, are hereby referred for determination and award by said Master, who shall award, order, judge and determine of and concerning the same, .... The award of said Master shall be final and binding upon each of the parties hereto and their respective heirs, executors, administrators, successors and assigns, and shall in all respects be well and faithfully kept and observed by each of the parties hereto.
• • •
“All parties waive any and all right to seek any review by any court of any final award by said Master or of any judgment or decree entered in conformity therewith.”

On the basis of this agreement, the plaintiff here urges that the appeal should be dismissed because the parties contracted to waive review. The defendants argue that the arbitrator failed to decide many issues submitted to him for determination, and that in consequence he failed to conform to the stipulations in the arbitration agreement. One provision of the agreement had indicated that the decision was to be based on Illinois law, but the defendants here argue that the award was a compromise, not a decision' according to law, and that the order of the court affirming the award should therefore be reversed. Plaintiff does not rest his entire argument on a request for dismissal, but also affirmatively argues that the decision of the arbitrator is correct and that the court order entering the award should be affirmed.

The defendants argue that plaintiff was guilty of many acts violative of his duty to the group and that he should therefore be denied any form of compensation. Defendants urge in particular that since plaintiff himself drew up the voting trust agreements which were subsequently declared void, all provisions of the agreement, including the one for a finder’s fee, were voided. Defendants also argue that plaintiff violated his fiduciary duty as an attorney, as a trustee under the voting trust agreements, as a joint venturer, and as a director of the corporation which had been formed to hold title to the land in issue. It is argued that the plaintiff should be denied any relief because he came into the proceeding with unclean hands, having claimed an attorney’s fee of 10 percent of the profits and a half interest of another 10 percent of the profits as his share of the finder’s fee, both purportedly asserted in bad faith. Defendants also argue that whatever right plaintiff may have had to share in the finder’s fee was forfeited because of his conflict of interest, his withholding of his assessment shares on many occasions, and his effort to make separate deals with some of the beneficiaries in order to deprive Meyers and El Chonen of their shares of the finder’s fees.

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Bluebook (online)
253 N.E.2d 144, 115 Ill. App. 2d 286, 1969 Ill. App. LEXIS 1504, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cohen-v-meyers-illappct-1969.