Matthews v. Homecomings Financial Network, Inc.

264 F. App'x 536
CourtCourt of Appeals for the Seventh Circuit
DecidedFebruary 20, 2008
DocketNo. 07-1095
StatusPublished
Cited by5 cases

This text of 264 F. App'x 536 (Matthews v. Homecomings Financial Network, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Matthews v. Homecomings Financial Network, Inc., 264 F. App'x 536 (7th Cir. 2008).

Opinion

ORDER

Attorney Karris A. Bilal represented Kenneth Matthews, the plaintiff in the litigation underlying this dispute over attorney’s fees. Bilal, who says he was not paid for his services, claims to have perfected an attorney’s lien on settlement money that the defendants paid to Matthews. He also argues that he is entitled to an equitable lien or a quantum meruit recovery for the value of his services. The district court dismissed Bilal’s case, ruling that he did not comply with the strict requirements of the Illinois Attorneys Lien Act, precluding any statutory lien on the settlement. The court also held that Bilal failed to establish a basis for an equitable recovery. Bilal appeals.

Bilal represented Matthews in the underlying litigation—a suit alleging, among other things, violations of the Fair Debt Collection Practices Act and the Truth in Lending Act. Bilal represented Matthews between August 2004 and February 2006, when Matthews moved to discharge Bilal as his counsel. The next month, Bilal himself filed a motion to withdraw, which the court promptly granted. In April 2006, one month after the court severed their relationship, Bilal served a notice on Matthews and counsel for the various defendants in the underlying suit—but not the defendants themselves—claiming a statutory lien of $47,960 on any settlement paid to Matthews.

Matthews filed a motion to quash Bilal’s asserted lien. A magistrate judge granted the motion after Bilal offered no opposition. Bilal later filed a motion to alter or amend judgment, claiming that he never learned of the motion to quash. The district court then granted Bilal a chance to contest the motion. Bilal argued that the notices he served met the requirements to perfect a statutory lien on any settlement proceeds. Bilal also contended, by affidavit, that he and Matthews entered into a written contract in which Matthews promised to pay Bilal the greater of: (1) one-third of any settlement, or (2) his hourly rate multiplied by the time for the work he performed. Finally, without submitting the contract itself or any evidence of the time he spent on the case, he claimed in the alternative that he was entitled to either an equitable lien or a quantum meruit recovery for the value of his services.

The district court adopted the magistrate judge’s recommendation that Bilal had failed to meet the requirements for a perfected statutory attorney’s lien. The district court also accepted the magistrate judge’s recommendation that Bilal was precluded from seeking an equitable lien because he claimed to have entered into a written contract that he did not produce. Neither the magistrate judge nor the district court explicitly addressed Bilal’s quantum meruit claim.

Before examining the merits of Bilal’s claims, we must ensure that we have jurisdiction over a fee dispute governed by state law. We have recognized that, because of a high degree of relatedness, sup[538]*538plemental jurisdiction extends to suits over attorney’s fees for work in underlying litigation that is already within the court’s jurisdiction. See Abbott Labs. v. CVS Pharmacy, Inc., 290 F.3d 854, 858 (7th Crr.2002); Rissman v. Rissman, 229 F.3d 586, 587-88 (7th Cir.2000); Clarion Corp. v. Am. Home Prods. Corp., 464 F.2d 444, 445 (7th Cir.1972) (specific to liens asserted in Illinois); see also Baer v. First Options of Chicago, Inc., 72 F.3d 1294, 1298-1301 (7th Cir.1995). Thus, federal jurisdiction is secure.

Turning to the merits, Bilal reasserts his argument that he complied with the statutory requirements for perfecting an attorney’s lien. In Illinois, these requirements are set out in 770 Ill. Comp. Stat. 5/1. Because the lien is governed by statute, strict compliance is necessary to perfect a lien. People v. Philip Morris, Inc., 198 Ill.2d 87, 259 Ill.Dec. 845, 759 N.E.2d 906, 911 (2001); Progressive Universal Ins. Co. v. Taylor, 375 Ill.App.3d 495, 314 Ill.Dec. 545, 874 N.E.2d 910, 915 (2007). An attorney is required to serve notice of the lien on the defendants during the pendency of the attorney-client relationship. Rhoades v. Norfolk & Western Ry., 78 Ill.2d 217, 35 Ill.Dec. 680, 399 N.E.2d 969, 973-74 (1979); In re Chicago Flood Litig., 289 Ill.App.3d 937, 224 Ill.Dec. 860, 682 N.E.2d 421, 426 (1997); Dep’t of Pub. Works v. Exch. Nat’l Bank, 93 Ill.App.3d 390, 49 Ill.Dec. 218, 417 N.E.2d 1045, 1048 (1981). Bilal failed in this regard: he did not provide notice of a lien to anyone until after both he and his client moved for his withdrawal and the court granted the motion. Moreover, an attorney is required to serve notice on the defending parties in the underlying litigation, see Rhoades, 399 N.E.2d at 973; TM Ryan Co. v. 5350 South Shore, L.L.C., 361 Ill.App.3d 352, 297 Ill.Dec. 72, 836 N.E.2d 803, 807 (2005), and some courts have interpreted this language to mean that service on the defendants’ counsel is not sufficient, see In re Del Grosso, 111 B.R. 178, 182 (Bankr.N.D.Ill.1990) (citing Cazalet v. Cazalet, 322 Ill.App. 105, 54 N.E.2d 61, 63 (1944)). Bilal served the defendants’ counsel but not the defendants themselves, so he may have failed in this regard as well.

Bilal’s response is that his belated service should not matter because Matthews terminated the attorney-client relationship in bad faith, an action that Bilal could not control. Aside from Bilal’s failure to cite any case excusing untimely notice for this reason, Bilal offers no reason why he could not have served notice of the lien during the year and a half time that he was counsel, in the exercise of ordinary prudence. In any event, Bilal himself asked to terminate the attorney-client relationship. He could have served his lien notice before he sought to end the relationship, but did not. Thus, the district court properly quashed any purported interest Bilal had in a statutory lien.

Bilal also renews his argument that he was entitled to an equitable lien. To qualify for an equitable lien, an attorney must establish that an equitable assignment exists under which the client assigned to the attorney a portion of a fund. See Wegner v. Arnold, 305 Ill.App.3d 689, 238 Ill.Dec. 1001, 713 N.E.2d 247, 252 (1999). A mere promise to pay does not confer an assignment of a portion of a fund. See, e.g., Wegner, 713 N.E.2d at 252; LeFevre, Zeman, Oldfield & Schwarm Law Group v. Wal-Mart Stores, Inc., 302 Ill.App.3d 1059, 235 Ill.Dec. 870, 706 N.E.2d 130, 133 (1999).

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264 F. App'x 536, Counsel Stack Legal Research, https://law.counselstack.com/opinion/matthews-v-homecomings-financial-network-inc-ca7-2008.