Murges v. Bowman

627 N.E.2d 330, 254 Ill. App. 3d 1071, 194 Ill. Dec. 214
CourtAppellate Court of Illinois
DecidedOctober 12, 1993
Docket1-92-2881
StatusPublished
Cited by23 cases

This text of 627 N.E.2d 330 (Murges v. Bowman) 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
Murges v. Bowman, 627 N.E.2d 330, 254 Ill. App. 3d 1071, 194 Ill. Dec. 214 (Ill. Ct. App. 1993).

Opinion

PRESIDING JUSTICE McCORMICK

delivered the opinion of the court:

Defendants took files and employees with them when they resigned from plaintiffs law firm. The trial court imposed a temporary restraining order (TRO) requiring defendants to account for funds earned on the files they took. At the conclusion of the hearing on the motion for preliminary injunction, the trial court issued an opinion in which it appointed a receiver and modified the TRO to deny defendants any access to fees earned on contested files pending issuance of the preliminary injunction, which the trial court said it would issue within two weeks. Defendants bring an interlocutory appeal from the opinion.

We find that we have jurisdiction to review only the narrow issue of whether the trial court abused its discretion by appointing a receiver pendente lite, by modifying the TRO or by denying defendants’ motion to dissolve the TRO. Defendants argue primarily that the trial court erred by imposing a preliminary injunction, but the record does not include the preliminary injunction promised in the order appealed from. Since defendants do not show that the trial court abused its discretion, we affirm.

From 1984 until 1992, George Murges, John Bowman and Lane Corday worked together as the law firm of Murges, Bowman and Cor-day, Ltd. (MBC). In June 1989, Bowman and Corday asked Murges to restructure their compensation so that each would receive one-third of the profits and a salary equal to Murges’. Murges agreed. Thereafter, Murges did not personally handle any MBC cases, and he represented a client at a hearing only once after 1988.

On August 20, 1991, Bowman and Corday told Murges that they wanted to buy MBC from him. Corday suggested paying Murges “a year or two years’ worth of compensation.” Murges said he did not want to discuss the sale of MBC at that time. They next discussed the proposal in September or October 1991. Murges said that the price should be in seven figures. Corday told him that was ridiculous, and he did not make a counteroffer.

On December 30, 1991, Bowman and Corday decided to leave MBC. They did not mention this decision to Murges before he left for vacation in Florida on January 3, 1992. During January, Bowman and Corday made arrangements to set up a new firm, and they prepared a form letter to send to clients of MBC informing the clients of the dissolution of the firm. Bowman and Corday hired all employees of MBC to work at their new firm.

On January 18, 1992, Bowman called Murges in Florida and said that Bowman and Corday resigned as officers, directors and employees of MBC. They left letters of resignation on Murges’ desk. Bowman and Corday took the files for all 660 clients of MBC to the offices of the new firm, Bowman and Corday. The new firm sent letters to all of MBC’s clients informing them of the dissolution and requesting a designation of attorney. More than 400 clients signed the enclosed form to designate Bowman and Corday as their attorneys.

On January 23, 1992, Murges and MBC filed a complaint for an injunction directing Bowman and Corday to return the files and precluding defendants from soliciting MBC’s clients. Murges and MBC also sought recovery of legal fees earned for work on the files and tort damages for conversion, tortious interference with business relationships and breach of fiduciary duty. At defendants’ request, Murges changed the name of MBC to George J. Murges and Associates, Ltd. (GJM). Murges and GJM then filed an amended complaint on January 31,1992.

Plaintiffs filed an emergency motion for TRO. On February 10, 1992, following a contested hearing, the trial court ordered defendants to deposit in a special bank account all settlement amounts and awards received for work on files taken from MBC offices. Only client awards, costs and attorney referral fees were to be distributed from the account; neither party could withdraw attorney fees. Defendants retained all of the 400 files for MBC’s former clients who had sent letters designating Bowman and Corday as their new attorneys. Defendants delivered to plaintiffs all remaining files, but the trial court ordered both parties not to solicit any of MBC’s clients until further order of the court. Thus, defendants represented former MBC clients who designated defendants as their attorneys in response to defendants’ solicitation, but plaintiffs could not solicit the clients who had made no such designation of attorney. The trial court ordered plaintiffs to submit for court approval a letter to send clients.

On February 18, 1992, plaintiffs presented to the trial court a draft letter to send to clients. The trial court rejected the draft. Plaintiffs have not sought approval for any subsequent drafts, although they have mailed letters to clients.

Defendants moved to dismiss the complaint on grounds that GJM lacked legal capacity to sue because GJM and its predecessor, MBC, failed to obtain certificates of registration from our supreme court and without such a certificate neither GJM nor MBC was authorized to practice law. (134 Ill. 2d R. 721(c).) GJM subsequently obtained from the supreme court a certificate of registration as a professional corporation engaged in the practice of law.

On June 3, 1992, defendants filed an emergency motion to dissolve the TRO. Defendants argued that since the TRO had been in effect for almost four months, they had no access to funds they needed to represent their clients adequately. They asked the trial court either to require plaintiffs to post bond, or to modify the TRO to release funds to defendants, if the trial court would not dissolve the TRO.

The trial court modified the TRO to permit defendants and plaintiffs each to withdraw 25% of the special fund, while the fund retained the remaining 50%. The trial court also directed the parties to distribute future receipts in the same proportion. The trial court indicated that the modification would allow the parties to use part of the funds earned as attorney fees pending decision on the preliminary injunction.

On July 8, 1992, defendants petitioned for a “change of venue based on [the trial] Court’s actual prejudice and its prejudgment of this cause.” The trial court denied the motion. Defendants again moved to dissolve the TRO, this time on grounds that plaintiffs had unclean hands because they sent solicitation letters to MBC clients without court approval, in violation of the TRO. The trial court decided to address the issue with the hearing on the preliminary injunction.

At the preliminary injunction hearing on May 19, 1992, defendants’ attorney stipulated that Murges was president and defendants were officers of MBC, a corporation properly registered with the Illinois Secretary of State. Counsel clarified that defendants did not stipulate to registration with our supreme court. Plaintiffs accepted the stipulation.

Murges admitted that he presented defendants to clients as his partners. He admitted that he mailed letters without court approval to some clients who had not designated an attorney in response to defendants’ solicitation. Murges argued that the letters only informed clients of funds received on their behalf, and he did not solicit a designation as attorney for these clients.

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Cite This Page — Counsel Stack

Bluebook (online)
627 N.E.2d 330, 254 Ill. App. 3d 1071, 194 Ill. Dec. 214, Counsel Stack Legal Research, https://law.counselstack.com/opinion/murges-v-bowman-illappct-1993.