Oughton v. Parkhurst

544 N.E.2d 112, 188 Ill. App. 3d 323, 135 Ill. Dec. 755, 1989 Ill. App. LEXIS 1368
CourtAppellate Court of Illinois
DecidedSeptember 7, 1989
DocketNo. 3-89-0002
StatusPublished
Cited by2 cases

This text of 544 N.E.2d 112 (Oughton v. Parkhurst) 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
Oughton v. Parkhurst, 544 N.E.2d 112, 188 Ill. App. 3d 323, 135 Ill. Dec. 755, 1989 Ill. App. LEXIS 1368 (Ill. Ct. App. 1989).

Opinion

JUSTICE SCOTT

delivered the opinion of the court:

The matter at issue in this appeal involves the measure of damages for a discharged attorney, and when a cause of action for those damages accrues to the attorney so discharged. We believe it is a matter of first impression for Illinois courts, and to fully understand the issue, a brief recitation of the factual background in which it arises is helpful.

On May 27, 1985, Phillip Callahan was injured in a highway accident and left totally disabled. Deborah Oughton, Phillip’s wife, was appointed guardian on behalf of Phillip, a disabled adult.

On May 29, 1985, Mrs. Oughton entered into a contingent fee contract with the law firm of Bartley, Parkhurst, Hession and Schroeder, to represent her in all matters arising from her husband’s accident. Pursuant to the contract, the attorney fees to be paid were to be 25% of any amount recovered for the ward by way of suit, settlement or in any other manner. The claimant in the instant action, John C. Parkhurst, was the attorney principally responsible for the representation.

On August 11, 1986, Mr. Parkhurst and his firm were discharged, by letter, as attorneys for the guardian and her ward. In August of that same year, the law firm of Corboy and Demetrio, P.C., formally replaced the Parkhurst law firm, and later that same month, the Parkhurst law firm filed this action as a claim for attorney fees. Subsequently, the Parkhurst law firm’s cause of action was assigned to John C. Parkhurst, individually.

This action for legal fees proceeded to trial before the underlying action arising from the automobile accident was adjudicated or settled. In the trial, the circuit court of Peoria County heard evidence that the claimant law firm rendered legal services to the guardian and her ward for more than a year. The Peoria County court determined that based upon the testimony, the claimant was entitled to $36,000 for legal services rendered, which was held to be presently due from the assets of the guardianship estate. The court further retained jurisdiction of the claimant’s action to determine any further fee due from any future recovery by the employer of Phillip Callahan through its workers’ compensation insurance carrier.

■The guardian and her ward appealed the circuit court decision seeking a reversal and an accompanying direction to delay further action on the issue of attorney fees until the occurrence of the contingency in the original fee contract. In the alternative, the guardian and her ward assert that the fees established by the circuit court were not supported by the evidence. Finally, the appellants urge that it was error to reserve jurisdiction over the attorney fees owing the claimant as a result of the workers’ compensation matter.

The briefs of both parties and our own review of the case law establish Rhoades v. Norfolk & Western Ry. Co. (1979), 78 Ill. 2d 217, 399 N.E.2d 969, as the leading case in Illinois governing the issue of fees for discharged attorneys. In that case, William D. Rhoades sustained an injury, while in the employ of the Norfolk and Western Railway Company. He considered filing suit against the railroad, and to that end he telephoned the law firm of Chapman and Chapman. An investigator associated with the law firm visited Mr. Rhoades at his home and, after some discussion, a retainer contract was signed authorizing the Chapman law firm to represent Rhoades for a 25% contingent fee. The next day, after a change of mind, Mr. Rhoades again telephoned the Chapman firm with instructions to not proceed with a lawsuit. Despite the client’s instructions, suit was filed along with a declaration of lien for attorney fees. When no explanation of this unauthorized lawsuit was forthcoming, Mr. Rhoades dismissed the Chapman firm as his attorney. Subsequently, the lawsuit, but not the lien claim, was dismissed, and Rhoades settled his claim against the railroad for $15,000. The adjudication of the lien claim was appealed to the Illinois Supreme Court. In its decision, the high court concluded the statutory prerequisites for maintaining the lien had not been met. Thus, recovery, if any, would be limited to the amount owed as a consequence of the attorney-client relation between Chapman and Rhoades.

The Rhoades court repeated what had been established law in Illinois: first, a client may discharge his attorney at any time with or without cause; and, second, the attorney so discharged is entitled to full contract fees if the dismissal was without cause. (Rhoades, 78 Ill. 2d at 227, 228.) Then, in departing from this established rule of Illinois law, the Rhoades court followed the reasoning of the California Supreme Court in Fracasse v. Brent (1972), 6 Cal. 3d 784, 494 P.2d 9, 100 Cal. Rptr. 385. In summarizing that reasoning, the Illinois court reported;

“[T]he client’s right to discharge his attorney at will is not a breach of the contract but a term of the contract implied by law because of the special relationship between attorney and client and that it would be anomalous and unjust to hold a client liable in damages for exercising that implied right. The court rejected the argument that it would be too difficult to ascertain the amount of recovery under a quantum meruit theory, since such calculations are often made in other situations. It also rejected the argument that the abandonment of the rule granting attorneys discharged without cause full contract fees would encourage unjustified discharging of attorneys by clients motivated solely by a desire to avoid attorney’s fees. In most instances, clients would hire another attorney and would still be liable for fees; in cases in which an attorney who has done much work is fired immediately before a settlement is reached, the factors involved in determining a reasonable fee would justify a finding that the entire contract fee is the reasonable value of services rendered. The California court concluded that its holding protected the client’s right to discharge the attorney and also acknowledged the attorney’s right to fair compensation for work performed.” (Rhoades v. Norfolk & Western Ry. Co. (1979), 78 Ill. 2d 217, 229, 230, 399 N.E.2d 969.)

It is clear that the Rhoades court adopts for Illinois one prong of the two-pronged holding in Fracasse. It is not evident that the Rhoades court adopts both parts of the Fracasse decision. In Fracasse, the court held

“that an attorney discharged with or without cause is entitled to recover the reasonable value of his services rendered to the time of discharge. *** [Also,] the cause of action to recover compensation for services rendered under a contingent fee contract does not accrue until the occurrence of the stated contingency.” (Fracasse v. Brent, 6 Cal. 3d at 792, 494 P.2d at 14-15, 100 Cal. Rptr. at 390-91.)

The Rhoades court did not address the issue of when the cause of action to recover compensation accrued, in part because under the facts in Rhoades, by the time the fee issue was litigated, the contingency, the settlement for $15,000, had occurred. That differs from the facts faced by the California court in Fracasse. In the California case, the personal injury action was still pending and the contingency had not occurred.

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Related

In Re Estate of Callahan
578 N.E.2d 985 (Illinois Supreme Court, 1991)
Oughton v. Parkhurst
578 N.E.2d 985 (Illinois Supreme Court, 1991)

Cite This Page — Counsel Stack

Bluebook (online)
544 N.E.2d 112, 188 Ill. App. 3d 323, 135 Ill. Dec. 755, 1989 Ill. App. LEXIS 1368, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oughton-v-parkhurst-illappct-1989.