Murphy v. Kinnally Flaherty Krentz Loran Hodge & Masur, P.C.

2023 IL App (2d) 230019, 242 N.E.3d 436
CourtAppellate Court of Illinois
DecidedNovember 15, 2023
Docket2-23-0019
StatusPublished
Cited by1 cases

This text of 2023 IL App (2d) 230019 (Murphy v. Kinnally Flaherty Krentz Loran Hodge & Masur, P.C.) 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
Murphy v. Kinnally Flaherty Krentz Loran Hodge & Masur, P.C., 2023 IL App (2d) 230019, 242 N.E.3d 436 (Ill. Ct. App. 2023).

Opinion

2023 IL App (2d) 230019 No. 2-23-0019 Opinion filed November 15, 2023 ______________________________________________________________________________

IN THE

APPELLATE COURT OF ILLINOIS

SECOND DISTRICT ______________________________________________________________________________

WILLIAM F. MURPHY, Executor of the ) Appeal from the Circuit Court Estate of William C. Murphy, Deceased, ) of Kane County. ) Plaintiff-Appellant, ) ) v. ) Nos. 18-L-143 ) 17-MR-1142 ) KINNALLY FLAHERTY KRENTZ LORAN ) HODGE & MASUR, P.C., f/k/a Kinnally, ) Krentz, Loran, Hodge & Herman, ) P.C., ) Honorable ) Kevin T. Busch, Defendant-Appellee. ) Judge, Presiding. ______________________________________________________________________________

JUSTICE SCHOSTOK delivered the judgment of the court, with opinion. Presiding Justice McLaren and Justice Kennedy concurred in the judgment and opinion.

OPINION

¶1 In this breach of contract action, the trial court barred the estate of William C. Murphy

(Murphy), acting through the plaintiff, its representative, William F. Murphy (William), from

introducing several items of evidence and then entered a directed verdict, finding that the estate

had not submitted sufficient evidence to support its claim. The estate appeals. We vacate the

directed verdict and remand for a new trial.

¶2 BACKGROUND

¶3 The decedent, William C. Murphy, was a graduate of Harvard Law School and practiced

law with distinction for almost 70 years. For decades, he practiced with the defendant firm,

Kinnally Flaherty Krentz Loran Hodge & Masur, P.C. 2023 IL App (2d) 230019

¶4 In 1999, Murphy and his partner Robert Hupp entered into an agreement under which they

became “of counsel” to the firm (then known as Murphy Hupp & Kinnally). Under the 1999

agreement, Murphy and Hupp would continue to receive office space, administrative support

services, and professional liability and health insurance, and were not required to devote any

specific amount of hours to practicing law. They would be paid one-third of any time they billed,

and a one-third share of any net fees received by the firm for any probate or contingent personal

injury cases they brought to the firm, when those fees were collected. The 1999 agreement also

required the firm to pay Hupp, who worked on transactional matters, 50% of the monthly retainer

received by the firm from the Fox Valley Park District. The agreement could be terminated upon

90 days’ written notice by either party or by corporate dissolution.

¶5 Hupp died in 2003. Under the 1999 agreement, the firm continued to pay Hupp’s widow

his share of the monthly retainer fees collected after his death.

¶6 In 2004, Murphy and the firm entered into a revised “of counsel” agreement. At trial,

Gerald Hodge (one of the firm’s current principals) testified that he was the primary drafter of the

2004 agreement. He agreed that the “Hupp problem” of “extensive lingering obligations”

following the death of an “of counsel” lawyer was a concern that led to the drafting of the 2004

agreement. The revised agreement addressed this concern in part through section 6(c), which

expanded termination events to include the death of Murphy or any of the firm’s principals. The

revised agreement also changed section 4, which addressed the issue of compensation:

“4. Compensation.

A. WCM [(Murphy)] shall receive Thirty-Three and one-third (33⅓%)

Percent of the net fee to KKLHH [(the firm)] when actually collected for all

probated estates or trusts which he generates, regardless of whether the estate work

was performed by KKLH [sic] or WCM.

-2- 2023 IL App (2d) 230019

B. For all contingent fee personal injury cases and for worker’s

compensation cases, will contests, condemnation, or commercial contingent fee

cases brought to KKLHH by WCM, the latter shall receive the following

compensation when the fee is collected by KKLHH:

(1) One-third (⅓) of any contingent fee case resulting in a net fee to

KKLHH unless a referral fee to another attorney or professional corporation

is owed;

(2) If a referral fee is owed to another attorney or professional

corporation, then WCM shall receive one-fourth (¼) of the net contingent

fee.

Net contingent fee means the fee to KKLHH before the payment of any

referral fees or a portion of the fees to WCM.

C. To the extent that WCM bills work for his own time, he shall receive

Thirty-three and one-third (33⅓%) Percent of his personal time billed when it is

collected.

D. WCM and KKLHH agree that any matter not covered by this agreement

which results in income from the practice of law shall be referred to KKLHH

exclusively unless the latter shall consent to a referral to another attorney/law firm.

E. In the event this agreement is terminated for any reason, KKLHH’s

payment obligations are limited to paying WCM any amounts collected for which

it owes WCM fees for a period of two months following the month in which the

termination becomes effective.”

The first four provisions were carried over from the 1999 agreement, albeit organized slightly

differently. Paragraph 4E was new, added to address the “Hupp problem.”

-3- 2023 IL App (2d) 230019

¶7 In 2012, Murphy referred Terry and Amy Seyller to the firm. In October 2012, the firm

filed a personal injury lawsuit on behalf of the Seyllers (Seyller case) in the circuit court of Cook

County.

¶8 On February 29, 2016, Murphy wrote a letter to William, his son, a lawyer like himself,

whom he had named as executor of his testamentary estate. The letter stated in relevant part:

“Dear Bill,

I wanted to outline for you my relationship with Kinnally Flaherty. I attach my ‘of

counsel’ agreement with the firm which is still in effect. It has worked well with no

problems over the years.

[I]n the event of my death, however, there are two cases in which I have an interest:

1. Seyller v. BNSF et al.: This is the case which Maire Ann Snider got for

me and which I referred to the firm. They have proceeded with it in the Circuit

Court of Cook County *** and it is set for trial in March 2017. No settlement offers

have been made. In the event of a recovery, I am entitled to ⅓ of the total fee as a

forwarder.” (Emphasis in original).

Attached to the letter was a copy of the 2004 agreement.

¶9 Murphy died on November 25, 2016, while the Seyller case was still pending. William, as

the executor of his father’s estate, retained Hodge as attorney for the estate. On April 26, 2017,

William e-mailed Hodge about various estate matters. Among other things, William asked,

“Whatever happened with the Seyller v. Burlington Northern case ***?” Hodge e-mailed back the

next day, saying “My recollection is that Seyller was continued to the fall by motion of the

defendants (I will check on that and let you know, if different).”

-4- 2023 IL App (2d) 230019

¶ 10 On June 30, 2017, one of the principals of the firm, Mark Masur, wrote a letter to William,

informing him that the Seyller case had tentatively settled. 1 Masur also wrote:

“Upon final resolution and funding, we will distribute $150,000.00 for your Dad’s interest

in this case. We did not have a written agreement with [your father] related to

compensation. *** In the absence of a written agreement, your father’s estate is entitled to

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2023 IL App (2d) 230019, 242 N.E.3d 436, Counsel Stack Legal Research, https://law.counselstack.com/opinion/murphy-v-kinnally-flaherty-krentz-loran-hodge-masur-pc-illappct-2023.