2020 IL App (1st) 191074
FOURTH DIVISION July 16, 2020
No. 1-19-1074
GRUND & LEAVITT, P.C., ) Appeal from the ) Circuit Court of Plaintiff-Appellant, ) Cook County. ) v. ) No. 18 L 11283 ) RICHARD STEPHENSON, ) Honorable ) Margaret A. Brennan, Defendant-Appellee. ) Judge Presiding.
JUSTICE LAMPKIN delivered the judgment of the court, with opinion. Justices Reyes and Burke concurred in the judgment and opinion.
OPINION
¶1 In October 2018, plaintiff, Grund & Leavitt, P.C. (Grund), a law firm, filed a complaint
against defendant, Richard Stephenson, its former client, to recover under a written agreement
whereby plaintiff would provide legal representation and services for defendant and defendant
would pay plaintiff hourly attorney fees and costs as incurred and, additionally, a “final bill.”
Plaintiff’s complaint alleged it “has performed all the conditions of” the parties’ agreement and
defendant “has failed to perform” the parties’ agreement. In March 2019, the circuit court of
Cook County entered an order granting defendant’s motion to dismiss plaintiff’s complaint on a
ground not originally specified in defendant’s motion. In May 2019, the trial court denied
plaintiff’s motion to reconsider its order granting defendant’s motion to dismiss. Plaintiff
appealed.
¶2 For the following reasons, we reverse.
¶3 I. BACKGROUND
¶4 In August 2015, defendant, Stephenson, hired plaintiff, Grund, to represent him in his
dissolution proceedings in McHenry County, Illinois. Pursuant to Stephenson’s engagement of 1-19-1074
Grund to represent him, the parties entered into a written agreement titled “Advance Payment
Retainer Agreement” (agreement). Grund attached the agreement to its complaint against
Stephenson and expressly made the agreement part of the complaint. The agreement contains the
following relevant provisions:
“This document is the Advance Payment Retainer Engagement Agreement
between GRUND & LEAVITT, P.C. (G&L), and you, Richard Stephenson, with
respect to the payment of your attorney fees and costs in connection with our
family law proceedings. ***
***
You will be billed against the Advance Payment Retainer for the services
and costs set forth in this Agreement, that are rendered to you on a monthly basis
as detailed on your monthly invoice;
G&L agrees to represent you in connection with your family law action
pursuant to the terms and provisions set out below.
You, Richard Stephenson, retain and employ G&L, to act as your
attorneys to represent you in all aspects of your family law matter.
G&L’s representation of you shall commence upon the execution of this
agreement and the payment of the retainer in the amount of $100,000 which
assures the availability of the services of G&L to represent you in this case. All
additional fees and costs incurred on your behalf in connection with the handling
of your case shall be subsequently determined and charged, including the costs
-2- 1-19-1074
and legal fees incurred in any post-decree and/or appeal that you may authorize
G&L to take on your behalf or to defend based upon the hourly rate(s) hereinafter
set forth and as determined by other provisions herein. G&L will bill against this
retainer at the hourly rates for all attorneys, paralegals and clerks employed by
G&L, or such other similar personnel as are designated to render services on your
case, as set forth in Exhibit A to this Agreement. Specifically, you will receive an
itemized bill each month, commencing the first full month after the date of this
Agreement, showing the time spent and services provided by each attorney,
paralegal or clerk who worked on your case during the prior month. This bill will
also show how much of your Advanced Retainer payment has been used through
the date of the bill. Each time the retainer is exhausted, you will be required to
replenish it. You will continue to receive monthly bills (which must be paid upon
receipt), showing the work done and fees charged for the prior month.
The hourly rates set out on Exhibit A shall remain in effect through
December 31 of the year in which this Agreement is dated. G&L reserves the
right to increase those hourly rates at any time thereafter. You will be provided at
least thirty (30) days notice of the increased rates. Absent a subsequent written
agreement to the contrary, you agree to pay those increased hour rate. (sic)
Upon final resolution of the case, G&L shall tender a final bill to you,
such final bill taking into account various factors, in addition to the hourly rates,
as delineated in the Illinois Rules of Professional Conduct (adopted by the Illinois
Supreme Court) as being relevant considerations to be included in arriving at a
-3- 1-19-1074
fair and reasonable charge. Such factors include the time and labor required, the
novelty and difficulty of the questions involved, the skill requisite to perform the
legal services properly, and whether unique expertise of any G&L attorney was
utilized; whether acceptance of the particular employment precluded other
employment by the firm; the amounts involved and the results obtained; the time
limitations imposed by the Client or by the circumstances (including unique time
demands); and the experience, reputation, and ability of the lawyer or lawyers
performing the services. The final bill will be tendered prior to the entry of a final
order or judgment or soon thereafter; and payment thereon shall be due on the
entry of judgment or by such date as is otherwise agreed upon in writing. (Any
payments to third parties processed subsequent to the final bill—e.g., a court
reporters [sic] charge for the final hearing—will be covered in a supplemental
statement relative to final costs, or alternatively, bill(s) relative thereto will be
sent to you for payment.)
Your case may be resolved by way of settlement. If, however, your case
does not settle and trial is requested or required, you agree to provide G&L with a
trial retainer sufficient to cover the costs of legal representation to include
anticipated attorney fees, costs of experts, court reporting transcripts and other
fees and costs usually and reasonably incurred in the preparation and presentation
of your case for trial. It is understood that the trial advance payment retainer will
be based on your attorney’s good-faith estimate as to the amount required as and
for fees and costs. If the trial advance payment retainer is insufficient to cover
-4- 1-19-1074
expenses of a trial, you will be responsible for the payment of any additional fees
and costs. ***.
It is agreed G&L shall utilize a team approach to handling your case,
which ordinarily involves the utilization of more than one attorney in the firm.
G&L attorneys discuss issues and work together to develop strategies and
litigation plans, as necessary. The team approach is further employed for trial,
hearings, motions, petitions, depositions, settlement conferences and meetings.
The client understands that all attorneys’ time used in this process will be
chargeable to the client.
* * *.”
¶5 In September 2017, the dissolution proceedings concluded with a supplemental judgment
addressing property, maintenance, and attorney fees and a written memorandum decision.
Grund’s complaint alleges that “on or about November 28, 2017, *** Plaintiff contacted
Defendant with regard to determining a fair and reasonable ‘final bill’ under said written
agreement.” The complaint alleges Stephenson “rebuffed” Grund “and thereafter refused to
engage Plaintiff further on his matter.” Finally, in pertinent part, the complaint alleges that
Stephenson “has failed to perform the [agreement] in that he rebuffed Plaintiff’s attempt to
discuss a fair and reasonable ‘final bill’ and pay the same in accord with the agreement.” The
complaint seeks “judgment in [Grund’s] favor against *** Stephenson in an amount to be
determined at trial, but not less than $50,000, together with costs, interest and attorney fees, and
all such other relief as the Court may deem just, equitable, or appropriate under the
circumstances.”
-5- 1-19-1074
¶6 In December 2018, Stephenson filed a motion pursuant to section 619.1 of the Code of
Civil Procedure (Code) (735 ILCS 5/2-619.1 (West 2018)) to dismiss Grund’s complaint.
Stephenson’s motion to dismiss argues Grund’s complaint should be dismissed pursuant to
section 2-615 of the Code (id. § 2-615) because
“1. the agreement is unenforceable as a matter of law, because it does not state a
definite and certain price or provide any practical method of determining a price
for the final bill;
2. on its face the agreement gives Grund unmitigated discretion to charge any fee
it wants over and above its stated hourly rates, and thus requires the payment of
an unreasonable fee in violation of Illinois Rule of Professional Conduct 1.5; and
3. the complaint fails to allege facts sufficient to support its cause of action:
namely how the Plaintiffs performance and the results it obtained for Defendant
warranted payment of a bonus above the hourly fees charged.”
Stephenson’s motion to dismiss argues that Grund’s complaint should be dismissed pursuant to
section 2-619 of the Code (id. § 2-619) because Grund is seeking an unreasonable fee of $9.75
million—a multiplier of 2.61 times the fees actually billed during the course of the
engagement—and because seeking to recover fees under such a multiplier in a divorce case is
unreasonable, impermissible, and unethical as a matter of law. Stephenson filed a memorandum
of law in support of his combined motion to dismiss in which Stephenson asserts that he paid
Grund $3.74 million in hourly fees for 8551 hours of professional services, plus costs, and that
the final bill requested an additional $9.75 million. Stephenson’s attorney also filed a declaration
in December 2018, averring (1) that based on billing records attached to Stephenson’s motion to
dismiss, Grund billed Stephenson $3,737,053.04 in legal fees for an average hourly rate of $437
-6- 1-19-1074
and (2) that in April 2019, Grund “issued an invoice for $9,775,000 composed of $25,000 in
hourly fees and a $9,750,000 line-item that simply said ‘Pursuant to Advance Payment Retainer
Engagement Agreement dated August 2, 2015.’ That $9.75 million demand is 2.61 times the
hourly fees billed.”
¶7 In January 2019, Grund filed an answer and memorandum of law in opposition to
Stephenson’s motion to dismiss. Grund’s memorandum of law asserts that, in November 2017,
Grund sent Stephenson a letter with “a request to meet to discuss a fee that is fair and reasonable
under the circumstances,” to solicit Stephenson’s input, and to “arrive at a fair, reasonable
resolution of this matter rather than send a bill” as agreed to in the agreement. The memorandum
asserts that Grund’s attempts to discuss the matter with Stephenson were rebuffed for five
months and in April 2018 Grund sent Stephenson a “final bill.” The “final bill” was for $9.75
million. Stephenson paid Grund $3.74 million in hourly fees over the course of Grund’s
representation. After Grund sent the “final bill,” Stephenson fired Grund. Grund’s memorandum
argues, in part, that the “enhancement Provision,” [the portion of the agreement under which
Grund seeks the amount stated in the “final bill,”] “provided for a reasonable enhancement,
taking into account various factors ‘delineated in the Illinois Rules of Professional Conduct’ [(Ill.
R. Prof’l Conduct R. 1.5 (eff. Jan. 1, 2010))] and [this court’s decision] in [In re Marriage of
Malec, 205 Ill. App. 3d 273 (1990)].”
¶8 In January 2019, Stephenson filed a reply in support of his combined motion to dismiss.
Stephenson’s reply argues, in part, that
“in a situation in which the base fee is determined by the hours worked and the rates
charged, the other Rule 1.5 factors [listed in the provision in the agreement at issue in this
-7- 1-19-1074
appeal] are necessarily already taken into account, and there is no place for an
enhancement based on those same considerations.”
Stephenson argues in his reply that Grund does not contest “that the fee determined by the hours
worked and the hourly rates in this case already takes all of these factors into account.”
¶9 In March 2019, the trial court issued a written order on Stephenson’s motion to dismiss,
stating, “Defendant’s Motion to Dismiss pursuant to 735 ILCS 5/2-619.1 is GRANTED and
Defendant’s Complaint is DISMISSED with prejudice.” The court’s written order acknowledges
Stephenson’s separate grounds for dismissal under section 2-615 and 2-619 and the parties’
arguments in support and opposition thereto. The court’s opinion cited Rule of Professional
Conduct 1.5(d)(1) of 2010, which states that “[a] lawyer shall not enter into an arrangement for,
charge, or collect *** any fee in a domestic relations matter, the payment or amount of which is
contingent upon the securing of a divorce or upon the amount of alimony or support, or property
settlement in lieu thereof.” Ill. R. Prof’l Conduct R. 1.5(d)(1) (eff. Jan. 1, 2010). The court’s
opinion holds as follows:
“The Enhancement Provision is contrary to public policy and Illinois’s
Rules of Professional Conduct because it contains a contingency fee in addition to
the hourly-rate fees. The Agreement states ‘such final bill taking into account
varies factors *** the amounts involved and the results obtained.’ The
enhancement to the hourly-rate based fee was thus, at least partially, contingent
on the on the outcome of the divorce proceeding in McHenry County. Contingent
fees are prohibited in domestic relations cases, pursuant to Illinois Supreme Court
Rule of Professional Conduct 1.5(d)(1). Accordingly, Defendant’s Motion to
-8- 1-19-1074
Dismiss Plaintiff’s Complaint is granted, and Plaintiffs Complaint is dismissed
with prejudice.
Pursuant to this Court’s and counsel’s ethical obligations, due to the
violation of Illinois Supreme Court Rule 1.5, this Order will also be sent to the
Attorney Registration & Disciplinary Commission.”
¶ 10 In April 2019, Grund filed a motion to reconsider, and Stephenson filed a response in
opposition to Grund’s motion to reconsider. In May 2019, Grund filed a reply in support of its
motion to reconsider. On May 22, 2019, the trial court heard argument on the motion to
reconsider. Following argument, the court orally ruled as follows:
“I have reconsidered and my ruling will stand, but I will explain to you
additionally, perhaps to flesh out a little bit more of the meat of the bones of the
decision, as to why the ruling will stand. In this case, there was a set fee
arrangement for $750 an hour; that was paid, for approximately $3.6 million or so
from a period of 2015 to the end of the case. The language that was contained in
the retainer agreement is the language that is contained in Ethical Rule 1.5 as to
how you can assess fees. That assumes that when those fees are being calculated
that you take into account those matters and that’s why you would charge the
$750 an hour, and there was nothing to prevent Mr. Grund from setting up a
retainer agreement. The man had a stepped-up schedule to acknowledge that,
okay, if this litigation goes on a year, then we’re at this rate; if it goes on two
years, then it’s taking a lot of time away from other cases and we’re going to
increase the rate, and that’s how the parties can contract.
-9- 1-19-1074
What you can’t do is charge a fee and then turn around and say, ‘I’m
going to use the exact same basis that I used to calculate what’s supposed to be a
reasonable fee and now I’m going to have an enhancement,’ as you’re calling it,
which I have found is contingency and is incremental.
I am not, you know, as well-versed as someone who’s practiced in
domestic relations for 30-plus years, but I am aware that Domestic Relations
started in Chancery, and the reason that there is absolutely no contingency fees in
Chancery or Domestic Relations is because you are to look at the equities of the
parties, and you cannot have contingency fees with equities of the parties, and I
find that this is a contingency fee; it is not permissible.
I do not find your citing to Malec as actually on point here. I think this
case is distinguishable and I have found it to be distinguishable, and for that
reason I have reconsidered and my ruling stands.”
¶ 11 The trial court issued a written order on the motion to reconsider, stating only that “the
motion for reconsideration is denied and the court’s ruling of [March 25, 2019] of dismissal with
prejudice and without costs stands.”
¶ 12 This appeal followed.
¶ 13 II. ANALYSIS
¶ 14 On appeal, Grund argues that its attorney fee agreement is not a contingency agreement,
and therefore, the trial court erred as a matter of law in dismissing its complaint in contravention
of established case law and Rule 1.5 of the Illinois Rules of Professional Conduct of 2010. Grund
argues that “enhancement fees and contingent fees [are] distinguished under the Illinois
Appellate Court’s seminal and controlling opinion of In re Marriage of Malec.” Grund further
- 10 - 1-19-1074
argues that, under Malec, “hourly-rate fees may ‘be “enhanced” in consideration of the
circumstances involved’ ” (quoting Malec, 205 Ill. App. 3d at 287) and that “an enhancement fee
*** can cross the line and become a barred contingent fee by linking that enhancement fee to
‘certain, particularized results’ ” (quoting id. at 288), but the fee provision at issue in this case
does not suffer from that infirmity. Stephenson responds that the trial court “correctly dismissed
the complaint on the basis that the final-bill bonus fee amounted to an unlawful contingency”
under Rule 1.5(d) by correctly deciding that
“1) the final bill provision stated that the bonus fee was based in part on the
‘amounts involved and the results obtained,’ and 2) *** the final bill fee Grund
demanded at the conclusion of the matter was ‘in addition to’ the hourly-rate fees
Grund was already paid and which necessarily took account of the same Rule 1.5
factors supposedly used in determining the final bill fee.” (Emphasis omitted.)
Stephenson argues that the trial court correctly reasoned that “it was the combination of these
two circumstances which made this an unenforceable contingency fee agreement.”
¶ 15 Initially Grund correctly notes that the trial court’s order did not specify whether the
court dismissed Grund’s complaint pursuant to section 2-615 or section 2-619 of the Code but
that under either section the standard of review for this court is de novo. See, e.g., Calloway v.
Chicago Board of Election Commissioners, 2020 IL App (1st) 191603, ¶ 9 (“We review a
dismissal under either section 2-615 or section 2-619 de novo.”). However, we note that the trial
court dismissed the complaint because it violates the Rules of Professional Conduct “and, hence,
is unenforceable as a matter of public policy.” See K. Miller Construction Co. v. McGinnis,
238 Ill. 2d 284, 291 (2010). Moreover, the factual basis of the trial court’s judgment is apparent
on the face of Grund’s complaint and Grund’s own allegations of the substance of the parties’
- 11 - 1-19-1074
contract and, specifically, the Enhancement Provision. Cf. id. (distinguishing bases of motions
pursuant to section 2-619(a)(9) and section 2-615). Thus, the trial court’s judgment is based on
an affirmative defense. See id. Whereas “section 2-619(a)(9) speaks in terms of affirmative
matter, not affirmative defenses” (emphases omitted) (id.) an affirmative defense is raised in a
section 2-615 motion. See also id. at 292 (“An affirmative defense may be raised in a section
2-615 motion where the defense is ‘established by the facts apparent on the face of the
complaint’ and no other facts alleged in the complaint negate the defense. 3 R. Michael, Illinois
Practice § 27.2, at 492 (1989).” (Emphasis omitted.)). We will treat the trial court’s judgment as
having been made pursuant to section 2-615 of the Code. See generally In re Marriage of Hall,
404 Ill. App. 3d 160, 165 (2010) (“a filing’s substance, not its title, determines its character”).
“A section 2-615 motion to dismiss challenges the legal sufficiency of a
complaint based on defects apparent on its face. [Citation.] In ruling on a section
2-615 motion, only those facts apparent from the face of the pleadings, matters of
which the court can take judicial notice, and judicial admissions in the record may
be considered. [Citation.] The court must also accept as true all well-pleaded facts
in the complaint and all reasonable inferences that may be drawn from those facts.
[Citation.] We review de novo an order granting a section 2-615 motion to
dismiss. [Citation.]” McGinnis, 238 Ill. 2d at 291.
¶ 16 Turning to the merits, in Malec, appeal was taken from an order denying a “petition for
additional attorney fees” in a dissolution of marriage case filed by Zurla, one of the attorneys for
the petitioner in those dissolution proceedings. (Emphasis added.) Malec, 205 Ill. App. 3d at
278-79. The petitioner in the underlying dissolution, Malec, paid a retainer and “was told that the
remainder of the fees would be settled, based on performance, at the end of the case.” Id. at 278.
- 12 - 1-19-1074
The parties did not have a written agreement concerning attorney fees. Id. At one point in the
litigation, the details of which are not pertinent, the petitioner in the dissolution “offered to pay
Zurla $1 million if he obtained certain results in his dissolution of marriage.” Id. at 279.
Subsequently, at a meeting to discuss the payment of attorney fees with Zurla, the attorney to
whom the petition promised $1 million, Zurla allegedly requested $3 million. Id. The petitioner
“was incensed and stated that the only fee previously promised was the $1 million fee,
contingent upon the achievement of certain results.” Id. The petitioner further stated at that
meeting that he did not owe the $1 million “because those contingencies had not been met.” Id.
Zurla allegedly stated that he was only kidding about the $3 million; petitioner fired Zurla the
next day. Id. The petitioner and Zurla attempted to negotiate a settlement on the payment of fees
but they were not successful. Id.
¶ 17 The petitioner had paid Zurla some attorney fees, either directly or through Zurla’s
former law firm, which had initially represented the petitioner. See id. at 278-79. Zurla petitioned
the trial court to award him fees in the amount of $1 million in quantum meruit or, alternatively,
$751,048.75 on a theory of accord and satisfaction. Id. at 279. The trial court denied Zurla’s
petition for fees under either theory and “declined to award any additional fees.” Id. Zurla
appealed. Id. Zurla’s first argument on appeal was that the trial court “erroneously credited
payments made by [the] petitioner against the $1 million fee.” Id. The Malec court addressed
“each disputed credit in turn” (id.) and concluded (1) there was no evidence the trial court
actually made the first alleged credit but if it did “any such credit would have been error” (id. at
280); (2) the second alleged credit was proper if the payment to Zurla’s former law partner “was
in fact for legitimate services *** rendered in the dissolution case” (id. at 283); and (3) the trial
- 13 - 1-19-1074
court’s determination a third credit should apply was not clearly against the manifest weight of
the evidence (id. at 285).
¶ 18 Next, the Malec court turned to Zurla’s contention “that the trial court failed to consider
the relevant factors in determining the reasonableness of his fee.” Id. The Malec court stated the
factors used to determine the reasonableness of an attorney fee, then proceeded, based on Zurla’s
arguments, to apply the facts of that case to the relevant factors. Id. at 285-86. Specifically, the
Malec court found that the trial court “did consider the complexity of the issues involved” (id. at
286) and gave “proper consideration” to the novelty and difficulty of the issues involved in
Zurla’s representation (id.). It then stated that, on remand, the trial court should consider “the
preclusion of taking other cases,” which the court found was clearly established by the testimony
(id. at 286-87).
¶ 19 The Malec court next addressed Zurla’s argument “that the trial court failed to consider
the ‘results achieved’ as a factor in its determination of the reasonableness of the fees.” Id. at
287. (It is from there the argument “that enhancement fees have been approved by this court and
are permissible” and the issues in this appeal emerge. See id.) The Malec court noted that Zurla’s
argument concerning the “results achieved” factor
“is premised on the [trial] court’s statement that it ‘[d]id not believe that either a
multiplier or an enhanced fee is ever appropriate in a marital dissolution case.’
Zurla relies on In re Marriage of Barry (1st Dist. 1988), Nos. 86-1908, 86-2206
(unpublished order under Supreme Court Rule 23). In that order, this court stated
that the circuit court’s determination that the attorney was not entitled to
enhancement fees was supported by the evidence. From that language, Zurla
- 14 - 1-19-1074
concludes that enhancement fees have been approved by this court and are
permissible.” Id.
The Malec court found that based on “the result obtained in a case,” the fee “may be adjusted
upward or downward.” Id. The court also held that “[w]hile we agree with the [trial] court that a
multiplier would not be appropriate in a dissolution case [citation], we do not agree that fees may
not be ‘enhanced’ in consideration of the circumstances involved.” Id.
¶ 20 The Malec court turned to the petitioner’s argument “that an enhanced fee or one that is
based on results achieved is a contingent fee” and that “since contingent fee agreements in
dissolution cases are void as against public policy, [the] petitioner should be barred from
recovering any fees.” (Emphasis added.) Id. at 287-88. Zurla responded that “since his fee was
not based on a percentage of any amount recovered or saved[,] it was not contingent.” Id. at 288.
Zurla cited Head v. Head, 505 A.2d 868 (Md. Ct. Spec. App. 1986), which held “that because
the results obtained is one of the factors considered in determining the fee, it does not render the
fee contingent.” Malec, 205 Ill. App. 3d at 288 (citing Head, 505 A.2d at 874-75). The Malec
court held that “[i]n Illinois, the results obtained is also a factor to be considered as a guide in
determining the reasonableness of a fee. [Citation.] Thus, to the extent that Head stands for the
proposition that consideration of that factor does not convert the fee into a contingency fee, we
agree.” Id. The court concluded that “while Zurla’s fee arrangement would not have been
contingent because of the consideration to be given to the results achieved factor, we do believe
that it was contingent for another reason.” (Emphases added.) Id.
¶ 21 The Malec court began with the definition of a contingent fee. At that time,
“Canon 2-106 of the Code of Professional Responsibility define[d] a contingent
fee agreement in the following manner:
- 15 - 1-19-1074
‘[A]ny agreement for the provision of legal services by a lawyer under which the
amount of the lawyer’s compensation is contingent in whole or in part upon the
successful accomplishment (by settlement or litigation) of the subject matter of
the agreement, regardless of whether the fee is established by formula or in fixed
amount.’ 107 Ill. 2d R. 2-106(c)(1).” Id.
See also Hernandez v. New Rogers Pontiac, Inc., 332 Ill. App. 3d 461, 465 (2002). “Under this
definition, a contingent fee agreement is contractual in nature, as it is an agreement whereby the
lawyer provides legal services to a client in consideration for payment upon successful
completion thereof.” Id.
¶ 22 Based on the petitioner’s offer “to pay Zurla $1 million if certain, particularized results
were obtained,” and Zurla’s argument “that since those results were achieved, he should be paid
the $1 million,” the court held the “agreement to be characteristic of contingent agreements as
they are defined in the Code of Professional Responsibility.” Malec, 205 Ill. App. 3d at 288.
The Malec court rejected Zurla’s request for recovery of the $1 million in quantum meruit and
his argument based on “other jurisdictions wherein recovery has been allowed.” Id. As to the
latter, the court held that “the mere existence of a contrary rule in foreign jurisdictions does not
persuade us toward repudiation of so well established a rule as the one here in Illinois.” Id. at
289. As to the former, the Malec court, relying on its earlier decision in Licciardi v. Collins,
180 Ill. App. 3d 1051, 1061 (1989), rejected Zurla’s argument. In Licciardi, the court held that
“ ‘as long as an attorney’s services are employed with respect to the division of marital property,
the rule bars contingent fees therefor.’ ” Malec, 205 Ill. App. 3d at 289 (quoting Licciardi,
180 Ill. App. 3d at 1061). “The policy against permitting contingent fees in divorce actions is
based on a concern that if the attorney has a financial interest in the outcome of the case,
- 16 - 1-19-1074
reconciliation of the parties will be either deterred or prevented.” Id. at 290. The Malec court
refused to depart from Licciardi, holding “[o]ur interest in the preservation of the marital
relationship is so strong as to outweigh our concerns that the party may have been unjustly
enriched.” Id. at 289. “Thus, under the rule of Licciardi, which is firmly rooted in our public
policy and based on our canon of ethics, we conclude that Zurla is precluded, under any theory,
from recovering on the $1 million contingency fee agreement.” Id. at 289.
¶ 23 Nonetheless, the Malec court held that there was no reason Zurla should be barred from
recovery of any “additional fee due him under the fee arrangement which was originally agreed
upon between [the] petitioner and the [law] partnership.” Id. at 289-90. In Malec, that
“original agreement for fees was entered into prior to the filing of the petition for
dissolution of marriage, and its terms were not conditioned on any particular result in the
case. Thus, since the attorneys, at the time they entered into the original fee agreement
with petitioner, had no interest in the outcome of the case, the agreement is not tainted by
any illegality and Zurla may properly seek to recover fees based on its terms.” Id. at 290.
The Malec court held that if the trial court had failed to consider “the results achieved” because it
believed “that to do so would be an improper ‘enhancement,’ ” the trial court erred. Id. The
Malec court directed the trial court to give proper consideration to “the results achieved” to
determine whether Zurla was “entitled to any additional fees” which “must, nonetheless, satisfy
the reasonableness requirement.” Id.
¶ 24 Notably for purposes of this appeal, the Malec court did not state whether, under the
original fee agreement entered into with the partnership, Zurla might be entitled to “additional
fees” in the form of an increased hourly rate or an additional flat amount. See id. The Malec
court in fact never discussed whether the “enhancement” it discussed would be an
- 17 - 1-19-1074
“enhancement” in the form of an increased hourly rate, billing for more hours, or a flat amount.
See id. at 287-90. In connection with Zurla’s argument that the trial court erred in finding no
evidence supported his hourly rate, the Malec court noted the testimony of one of plaintiff’s
experts, who is also the fee petitioner in this case. “It was David Grund’s, one of Zurla’s experts,
belief that a reasonable hourly rate would be $275 an hour with the multiplier applied as an
enhancer.” Id. at 293. The Malec court did not address the assertion there should be a “multiplier
applied as an enhancer” specifically in connection with either the trial court’s finding that there
was no evidence offered to support Zurla’s hourly fee or the remand for the trial court to
determine whether Zurla is “entitled to any additional fees.” See id. at 290-93. However, we
acknowledge that, in addressing Zurla’s argument, the Illinois Supreme Court had yet to address
“the trial court’s conclusion that there should be separate rates for office time and for court
time.” The Malec court did note that “Illinois case law is clear that when fees are granted in
dissolution cases, it is based upon a separate hourly rate for court time and office time.” Id. at
293 (citing Christian v. Christian, 69 Ill. App. 3d 450 (1979)). Nonetheless, the Malec court did
not carry that finding into the grounds for holding that Zurla might be entitled to additional
attorney fees under the parties’ agreement. Additionally, Zurla argued that he should be
permitted to recover $751,048.75 “of the $1 million fee” based on a theory of accord and
satisfaction because the petitioner allegedly verbally agreed to pay that sum to settle the parties’
fee dispute. Id. at 294. The Malec court held that its “determination that Zurla may recover any
reasonable fees obviates the need *** to consider his accord and satisfaction argument.” Id.
- 18 - 1-19-1074
Nonetheless, the court found there was no accord and satisfaction, but not because there was “no
agreement” to a $1 million flat fee. See id. at 294-95. 1
¶ 25 Ultimately, the Malec court held that “the trial court failed to give due consideration to all
of the necessary factors in determining whether Zurla was entitled to additional fees” and
remanded for the trial court to “give careful consideration” to the factors discussed in the case to
“determine a reasonable fee for necessary services rendered.” Id. at 295. The Malec court did not
say the additional reasonable fee had to be applied in the form of an increased hourly rate or
imply that further review of Zurla’s performance or time records might result in finding more
time spent on the case. See id. at 287-90. Rather, the Malec court simply held that Zurla was
entitled to recover any reasonable fees due him under the parties’ fee arrangement. See id. at
289-90 (“even though we have determined that the $1 million fee agreement was illegal, we see
no reason to bar Zurla recovery of any additional fees due him under the fee arrangement”).
However, the fee arrangement may not be “conditioned on any particular result” in the case or
create a financial interest in the outcome. Id. at 290.
¶ 26 In this case, the parties, like the parties in Malec, entered a fee agreement providing for a
“final bill” that would include a fee “in addition to the hourly rates” that considered “the amounts
involved and the results obtained” prior to the filing of the petition for dissolution of marriage.
See id. The question becomes whether that “final bill” portion of the fees the parties agreed to
was “conditioned on any particular result in the case.” See id. In this case, the trial court found
1 “First, there was apparently no meeting of the minds. Petitioner intended that Vrdolyak’s promise of nondisclosure would be a part of the agreement. However, Vrdolyak had no knowledge that he was even to be included in the settlement agreement. Additionally, the agreement was never signed. While the parties negotiated on the terms of the settlement, there was neither mutual assent nor execution of the agreement. Finally, there was no tender of the agreed-upon amount.” Malec, 205 Ill. App. 3d at 294-95. - 19 - 1-19-1074
that it was so conditioned because the “final bill” was “at least partially, contingent on the
outcome of the divorce proceeding.” The only indication of why the trial court believed the final
bill was partially contingent on the outcome of the divorce proceeding is its concurrent finding
that the final bill is to take “into account *** the amounts involved and the results obtained.”
If that were the basis of the trial court’s judgment it is, clearly, erroneous. Consideration of the
result achieved in a particular case is not only permissible but required under Malec. See id.
(“We are unable to determine from the record what consideration the trial court gave to the
results achieved in this case. However, any determination which excluded consideration of that
factor, based on the belief that to do so would be an improper ‘enhancement,’ was error.”).
Moreover, consideration of that factor is required by rule. See Ill. R. Prof’l Conduct R. 1.5(a)(4)
(eff. Jan. 1, 2010) (“the amount involved and the results obtained”).
¶ 27 In its oral ruling, the trial court expressed a different reason for denying Grund recovery
under the Enhancement Provision: that the “final bill” was in addition to its hourly fees but based
on the same factors used to determine the hourly fee. However, the trial court cited no authority
for that limitation on attorney fees in dissolution proceedings. Stephenson argued on appeal that
the attorney fees were limited (1) by consideration of the amounts involved and the results
obtained and (2) because the final bill was “in addition to” the hourly rate fees.” However,
Stephenson has not cited any rule or authority so limiting the parties’ ability to contract for a
reasonable attorney fee except for, purportedly, Malec itself. To that end, Stephenson argues that
Malec only permits consideration of the results obtained in the absence of an hourly fee
arrangement. Specifically, Stephenson argues that “Malec only held that the results achieved,
along with the other relevant Rule 1.5 factors, could be considered without turning the agreement
- 20 - 1-19-1074
into a contingency where the parties had not otherwise agreed to a fee in advance.” (Emphasis in
original.)
¶ 28 We reject Stephenson’s characterization of the scope of the holding in Malec. First,
Stephenson’s interpretation is contrary to the plain language of Rule 1.5(d), which does not
contain Stephenson’s purported limitation on the applicability of the Rule to determinations of
when a fee is reasonable—including when the fee is in addition to other fees. “In Illinois, the
result obtained is also a factor to be considered as a guide in determining the reasonableness of a
fee.” Malec, 205 Ill. App. 3d at 288. “We interpret the Illinois Rules of Professional Conduct in
the same manner as statutes.” In re Marriage of Stephenson, 2011 IL App (2d) 101214, ¶ 26.
“We may not depart from the plain statutory language by reading into a statute exceptions,
limitations, or conditions not expressed by the legislature.” In re Marriage of Zamudio & Ochoa,
2019 IL 124676, ¶ 15.
¶ 29 Second, Stephenson’s position is belied by the facts in Malec, in which the court detailed
what the petitioner and Zurla had “otherwise agreed to” with regard to the fees the petitioner in
that case paid to Zurla before the parties allegedly agreed to the $1 million fee or any others.
See Malec, 205 Ill. App. 3d at 279.
“Law and public policy demand that competent parties be free to contract with
one another. [Citation.] Parties to a contract are free to choose any terms that are
not against public policy and do not contravene some positive rule of law.
[Citation.] Parties are bound to the contracts they make, and the court has a duty
to construe and enforce them.” J.B. Esker & Sons, Inc. v. Cle-Pa’s Partnership,
325 Ill. App. 3d 276, 284 (2001).
- 21 - 1-19-1074
The Malec court expressly disagreed with the proposition that “fees may not be ‘enhanced’ in
consideration of the circumstances involved.” Malec, 205 Ill. App. 3d at 287.
¶ 30 Stephenson implies on appeal that the impermissible “particular result” in this case is the
securing of a dissolution. Specifically, Stephenson argues “a divorce lawyer could avoid the
prohibition of Rule 1.5(d) by simply making its fee contingent on a general outcome rather than
a specific one,” which would be “contrary both to the letter and spirit of the ethical rules.”
However, Stephenson’s interpretation would constitute an exception to the rule that the
reasonableness of a fee is determined in part by the results achieved that in fact swallows the
rule. Under Stephenson’s interpretation that exception would arise when the parties in any way
expressly, rather than impliedly “by rule,” contemplate the ultimate “results” desired from the
representation when agreeing to the attorney fee. Regardless, in this case, given the context of
the language of the agreement, consideration of “the results obtained” appears to mean as that
term is used in Rule 1.5(a), which is permissible as a matter of law. Because the trial court failed
to consider the parties’ agreement it did not address the meaning of the language in the parties’
agreement or whether that question has any bearing on the reasonableness or alleged contingent
nature of the fees sought under the Enhancement Provision. The trial court did not consider
whether Grund was entitled to any additional fees under the final bill provision at all. We express
no opinion at this time on these unanswered and unbriefed questions. See, e.g., Puffer-Hefty
School District No. 69 v. Du Page Regional Board of School Trustees of Du Page County,
339 Ill. App. 3d 194, 200 (2003) (“If the issue is one of law and is fully briefed and argued by
the parties, this court may consider the issue for the first time on appeal.”). At this stage of the
proceedings, the trial court has found the provision for a “final bill” was contingent (1) because it
considered “the results obtained” but not any particular result in the case or (2) because it
- 22 - 1-19-1074
considered the results obtained and was in addition to Grund’s hourly fees that already
considered the results obtained. Neither is a valid basis to reject the parties’ original fee
agreement.
¶ 31 Although the rules do provide limitations on the fees attorneys may charge (see, e.g.,
Malec, 205 Ill. App. 3d at 285), Stephenson has cited no Illinois authority for the proposition that
one of those limitations is that the Rule 1.5(a) factors may not be considered in connection with a
fee that is in addition to an hourly fee, even a hefty one. Stephenson’s foreign authorities
ostensibly to the contrary are wholly unpersuasive in this court. Like the Malec court, we believe
that “the mere existence of a contrary rule in foreign jurisdictions does not persuade us toward
repudiation of so well established [rules] as the one[s] here in Illinois.” Id. at 289. The trial court
in this case should have given consideration to the parties’ agreement expressed in a written
contract for a final bill, giving “proper consideration to the relevant factors, including the results
achieved” to determine whether Grund “is entitled to any additional fees” beyond the hourly fees
that “must, nonetheless, satisfy the reasonableness requirement.” (Emphases added.) See id. at
290. In failing to do so, based on our de novo review, we hold the trial court erred in granting
Stephenson’s motion to dismiss.
¶ 32 Stephenson asks this court to affirm the trial court’s judgment granting his motion to
dismiss on the alternative grounds that (1) the final bill provision is unenforceable because it
does not specify a key term and said key term is “to be determined by one party weighing
subjective factor” or (2) the final bill provision is unreasonable and unenforceable—but for the
same reasons it is allegedly unenforceable under Rule 1.5(d), because “the Rule 1.5 factors it
purports to consider were already subsumed within Grund’s hourly fee billing” (emphasis
omitted) and, in essence, because Grund separately charged Stephenson for, and he paid,
- 23 - 1-19-1074
significant hourly bills. We believe the better course is to remand to the trial court. On remand
the trial court is to consider the motion to dismiss in its entirety; including but not limited to the
alternative grounds raised in the motion concerning the specification of a key term, the method
of determining that key term, and the reasonableness and enforceability of the final bill given the
factors it is to consider and Stephenson’s payment of significant hourly bills based on those
factors. See generally General Auto Service Station, LLC v. Garrett, 2016 IL App (1st) 151924,
¶ 26 (“because we believe it is appropriate for the trial court to resolve these issues in the first
instance, we remand for the trial court’s consideration”).
“Unlike findings in a fee petition case, which rest in the sound discretion
of the trial judge, the reasonableness of attorney fees in a common law breach of
contract action presents a question to be resolved by the trier of fact, following a
fair and impartial trial. [Citation.] In civil actions brought by attorney-plaintiffs to
recover compensation for professional services performed under an alleged
contract, the usual rules governing breach of contract actions apply because ‘[t]he
liability to pay for legal services stands upon the same footing as other
agreements.’ [Citation.] *** ‘It is not the province of this court to substitute its
judgment for that of a [trier of fact]’ in a breach of contract action seeking
attorney fees ***. [Citations.]” Wildman, Harrold, Allen & Dixon v. Gaylord,
317 Ill. App. 3d 590, 597 (2000).
¶ 33 Accordingly, we reverse the trial court’s judgment and remand for further proceedings
consistent with this opinion.
- 24 - 1-19-1074
¶ 34 III. CONCLUSION
¶ 35 For the foregoing reasons, the circuit court of Cook County is reversed and the cause
remanded for further proceedings.
¶ 36 Reversed and remanded.
- 25 - 1-19-1074
Decision Under Review: Appeal from the Circuit Court of Cook County, No. 18-L-11283; the Hon. Margaret A. Brennan, Judge, presiding.
Attorneys David I. Grund and Marvin J. Leavitt, of Grund & Leavitt, P.C., of for Chicago, for appellant. Appellant:
Attorneys Chris Gair, Thomas R. Heisler, and Ryan P. Laurie, of for Gair Eberhard Nelson Dedinas Ltd., of Chicago, for appellee. Appellee:
Amicus Curiae: Donald C. Shiller, of Schiller DuCanto & Fleck, LLP, of Chicago, for amicus curiae Illinois Chapter of the American Academy of Matrimonial Lawyers.
- 26 -