Laff v. Chapman Performance Products, Inc.

379 N.E.2d 773, 63 Ill. App. 3d 297, 19 Ill. Dec. 901, 1978 Ill. App. LEXIS 3171
CourtAppellate Court of Illinois
DecidedJuly 31, 1978
Docket77-851
StatusPublished
Cited by28 cases

This text of 379 N.E.2d 773 (Laff v. Chapman Performance Products, Inc.) 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
Laff v. Chapman Performance Products, Inc., 379 N.E.2d 773, 63 Ill. App. 3d 297, 19 Ill. Dec. 901, 1978 Ill. App. LEXIS 3171 (Ill. Ct. App. 1978).

Opinion

Mr. JUSTICE McGLOON

delivered the opinion of the court:

Plaintiffs, attorneys at law, filed a two-count amended complaint against defendants, Chapman Performance Products, Inc. (hereinafter referred to as Chapman, Inc.), and Robert Chapman and David Arlasky, two officers of defendant corporation. Count I alleged that defendants owed plaintiffs *13,629.68 due on an account stated for legal services and out-of-pocket expenses. Count II alleged that defendants embarked on a plan to defraud plaintiffs and obtain legal services without intending to pay for them and sought *27,259.36 in punitive damages. Defendants answered denying the material allegations of the amended complaint. In addition, Chapman, Inc. filed a counterclaim in two counts. Count I alleged that plaintiffs agreed to handle the litigation in question for *6,000; that under plaintiffs’ threat to withdraw as counsel, defendant corporation paid the plaintiffs *10,000; that in violation of their agreement, plaintiffs withdrew as counsel before completing their services; and that as a result defendant was entitled to a *10,000 refund of fees already paid. Count II of the counterclaim alleged that plaintiffs’ actions were wilful and wanton and prayed for punitive damages. Plaintiffs answered the counterclaim admitting the receipt of *10,000 in fees but denied the remaining material allegations. The cause then proceeded to trial before a jury. During that trial, the trial court directed verdicts as to both count II of the amended complaint and count II of the counterclaim. The trial court also denied a motion by the plaintiffs pursuant to section 41 of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 41) praying for costs as to count II of the counterclaim. Count I of the amended complaint and count I of the counterclaim were submitted to the jury which returned verdicts in favor of the plaintiffs on both counts. The jury returned a verdict against both the corporation and individual defendants on count I of the amended complaint in the amount of *20,629.68, *7,000 more than requested in the amended complaint. After granting plaintiffs leave to amend their ad damnum to *20,629.68, the trial court entered judgment on the jury verdict. Defendants now appeal from that judgment. Plaintiffs cross-appeal from the trial court’s order denying their motion for costs as to count II of the counterclaim.

Defendants make the following contentions on appeal: (1) that the plaintiffs failed to sustain their burden of proof that the account rendered to the defendants was fair and reasonable; (2) that the trial court erred in failing to direct a verdict in favor of the individual defendants David Arlasky and Robert Chapman, and in failing to submit separate verdict forms as to these defendants; (3) that the jury’s verdict in excess of the ad damnum was the result of the jury’s passion and prejudice and warrants the granting of a new trial, or in the alternative, a remittitur;- and (4) that the trial court erred in refusing to receive into evidence defendants’ group exhibit no. 2 because said exhibit, defendants argue, denoted that much of the time spent by plaintiffs was unnecessary and unreasonable. Plaintiffs in their cross-appeal raise the sole contention that the trial court abused its discretion in not awarding them costs as to count II of the counterclaim.

We affirm in part and reverse in part.

The instant lawsuit arose out of services performed by the plaintiffs in connection with three lawsuits concerning the ownership of the trademark Kar-Lok and patent rights for the use of the patent on a hood and ignition lock system manufactured and sold by the defendant, Chapman, Inc. On October 29,1973, Chapman, Inc., filed a complaint in Federal court against Ramm Industries Co. (hereinafter referred to as Ramm) alleging patent infringement on a “Hood Locking Device.” On March 20, 1974, Ramm filed a complaint in the same court naming as defendants Chapman, Inc., David F. Arlasky, Robert W. Chapman and Joyce E. Arlasky and alleged unfair competition and infringement of the trademark Kar-Lok. After initiating the trademark suit, Ramm mailed about 500 letters to Chapman’s present and prospective customers threatening an infringement suit if they sold Chapman, Inc.’s product under the name Kar-Lok. Chapman, Inc.’s business immediately dropped by one-half.

Charles Laff, an attorney specializing in patent and trademark law and a member of the plaintiffs’ law firm, testified that he first met in his offices with David Arlasky and Jay Frank, then counsel for Chapman, Inc., on March 29, 1974. They informed him of the trademark and patent cases and asked Laff to represent the defendants in the trademark case and to take over representation in the patent case. Laff agreed to represent the defendants in both cases. According to Laff, Arlasky wanted immediate action to prevent Ramm from mailing further letters to Chapman, Inc.’s customers and wanted to establish Chapman, Inc.’s exclusive ownership of the name Kar-Lok. Laff also testified that he told Arlasky that his firm charged fees on an hourly basis. Laff’s time was billed at $60 per hour and the others in the firm scaled down to $25 per hour. Laff also informed Arlasky that clients were billed for out-of-pocket expenses. Laff told Arlasky it would be difficult to estimate the amount of fees but that the cost per month could go as high as s10,000. Laff testified that he also informed Arlasky that the average patent suit cost $50,000 to try and a trademark suit could cost as much. Received into evidence at trial were yellow and blue index cards indicating the services performed by each attorney, the amount of time expended in performing these services, and plaintiffs’ out-of-pocket expenses. The yellow cards reflected that plaintiffs had expended a total of 606.83 hours working on the cases.

During the course of their work relating to the patent and trademark cases, plaintiffs sent defendants periodic invoices billing them for legal services and out-of-pocket expenses. A total of nine invoices were sent defendants covering the period March 24, 1974, to May 14, 1975. Each invoice provided a detailed description of plaintiffs’ work, itemized the charges and disbursements made by plaintiffs, and credited amounts already paid. The final invoice reflected that defendants had paid plaintiffs a total of *10,000 and still owed *13,629.68.

Approximately one month after receiving the second invoice dated June 20, 1975, Arlasky sent plaintiffs a letter requesting an itemized accounting of plaintiffs’ hours and the charge per hour. Laff testified that he telephoned Arlasky, invited him to plaintiffs’ offices to check their billing records, and that Arlasky never attempted to make such an examination.

Laff also testified concerning the legal services plaintiffs performed for defendants. Laff initiated his work by studying extensive files provided by Arlasky pertaining to the patent case and a previous, related case, Chapman v. Producers Sales. Laff then prepared indemnity agreements for Chapman to send to its customers who had received Ramm’s threatening letter. In April of 1974, Laff, with assistance from other attorneys in plaintiffs’ firm, prepared and filed an answer and counterclaim in the trademark lawsuit and a motion for a preliminary injunction, together with supporting affidavits and a memorandum of legal authorities. Laff appeared in court on three separate occasions for hearings on this motion.

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Bluebook (online)
379 N.E.2d 773, 63 Ill. App. 3d 297, 19 Ill. Dec. 901, 1978 Ill. App. LEXIS 3171, Counsel Stack Legal Research, https://law.counselstack.com/opinion/laff-v-chapman-performance-products-inc-illappct-1978.