Reiniche v. Paul

2021 IL App (1st) 192488-U
Appellate Court of Illinois·Decided January 19, 2021·No. 1-19-2488·Unpublished

Opinion

2021 IL App (1st) 192488-U No. 1-19-2488

SECOND DIVISION

January 19, 2021

NOTICE: This order was filed under Supreme Court Rule 23 and is not precedent except in the limited circumstances allowed under Rule 23(e)(1).

IN THE

APPELLATE COURT OF ILLINOIS FIRST JUDICIAL DISTRICT

JEFFREY S. REINICHE, DR. ARTHUR ) Appeal from the Circuit Court CHAUSMER, and GARY POST, derivatively on ) of Cook County. behalf of HEALTH ALLIANCE HOLDINGS, ) INC., derivatively on behalf of HA HOLDINGS, ) INC., ) Nos. 13 CH 5368 consolidated ) with 18 L 1933

Plaintiffs, )

)

v. ) The Honorable ) Pamela McLean Meyerson, ANDREW M. PAUL, CURTIS LANE, KEVIN ) Judge Presiding. SWAN, JAMES KELLY, JAMIE MARTIN, MTS ) HEALTH ALLIANCE, LLC, ASHCROFT ) ASSOCIATES, LLC, ALLEN PALLES, JOHN ) HENNESSEY, E.B. MARTIN, JR., EBM ) VENTURES, LLC, HA ACQUISITION, LLC, ) HEALTH ALLIANCE HOLDINGS, INC., and ) HA HOLDINGS, INC., )

)

Defendants, )

)

(R. Timothy Novel and Aronberg, Goldgehn, ) Davis & Garmisa, Petitioners-Appellees v. Mark ) Swift, Respondent-Appellant). )

JUSTICE PUCINSKI delivered the judgment of the court. Presiding Justice Fitzgerald Smith and Justice Cobbs concurred in the judgment.

ORDER

¶1 Held: Where the law firm served the corporation’s officers by certified mail, service of the attorney’s lien was proper under the Attorneys Lien Act. In addition, where the party opposing a petition for attorney’s fees did not make a timely request for an evidentiary hearing and did not raise a factual issue that required the presentation of additional evidence to resolve, the trial court did not err in ruling on the petition for fees without an evidentiary hearing.

¶2 In 2004, the corporation Health Alliance Holdings, Inc. (“HAH”) dissolved. Thereafter, in 2013, shareholders of HAH filed a derivative suit. Upon settlement of the derivative suit, the settlement funds were placed in escrow. Respondent, Mark Swift, HAH’s president, retained petitioners, R. Timothy Novel and Aronberg, Goldgehn, Davis & Garmisa (“AGDG”) to represent him in the pursuit of his creditor claim to the settlement proceeds. Thereafter, Novel and AGDG filed a notice of attorney’s lien for fees owed to them by Swift. Swift filed a motion to adjudicate that lien, which the trial court denied. Novel and AGDG then filed a verified petition for attorney’s fees, which the trial court granted, awarding them fees and costs in the amount of $45,577.57. Swift appeals, arguing that the trial court erred in denying his motion to adjudicate the attorney’s lien and in granting the petition for fees. For the reasons that follow, we affirm.

¶3 BACKGROUND

¶4 Given the voluminous nature of the record in the underlying dispute and the limited issues on appeal, we granted Swift’s motion to limit the record on appeal to documents filed on or after January 1, 2019. Accordingly, some of the undisputed background facts recited here are taken from the parties’ briefs, but they are included solely for the purpose of providing background information and context. In reviewing the issues on appeal, we consider only those facts supported by the record on appeal.

¶5 The underlying action consisted of a derivative suit filed by shareholders of HAH, which was dissolved in 2004. Once a settlement was reached, the trial court ordered the shareholders’

attorney, Martin Oberman, to hold the settlement funds in escrow and established a procedure by which the shareholders and creditors could file claims to the settlement proceeds. Swift retained AGDG to represent him in pursuing his creditor claim to the settlement proceeds. His claim to the settlement proceeds was based on his assertion that he had fronted legal fees to and paid loans on behalf of HAH. On October 31, 2018, AGDG filed a notice of attorney’s lien (“lien”) “growing out of [Swift’s] claims, rights, causes of action or interest in the proceeds of the settlement *** as a claimant or creditor of [HAH]” in the amount of “$31,962.20, which are currently due and owing with fees and costs continuing to accrue.”

¶6 Swift later filed a “Motion to Adjudicate Attorney’s Lien” in which he sought to have the lien declared invalid on the basis that AGDG did not serve HAH’s registered agent with the lien or properly serve any officer of HAH with the lien. According to Swift, he, the president of HAH, was only served by email, and the only person served by certified mail was Ann Sickon, who was not an officer of HAH.

¶7 In response, AGDG argued that it did not need to serve HAH, because Swift’s claim was not against HAH and because HAH was not holding the settlement proceeds. AGDG also argued that even if it was required to serve HAH, it properly did so by serving HAH officers Jeffrey Reiniche, Arthur Chausmer, and Gary Post by certified mail.

¶8 At the hearing on Swift’s motion to adjudicate the lien, the parties maintained their written arguments, but Swift also contended that the Attorneys Lien Act (“Act”) (770 ILCS 5/1 (West 2018)) applied only to contingency-fee arrangements and not to hourly agreements like the one between him and AGDG. This argument was not raised in Swift’s written filings on the motion to adjudicate the lien. The trial court ultimately denied Swift’s motion to adjudicate the lien,

concluding that AGDG was required to serve HAH, but did so through service on HAH’s officers, Reiniche, Chausmer, and Post.

¶9 A couple of months after the trial court denied Swift’s motion to adjudicate the lien, AGDG and Novel, the AGDG attorney who primarily handled Swift’s representation, filed a verified petition for attorney’s fees. In that petition, AGDG and Novel alleged that Swift had an outstanding balance of $47,011.07 in attorney’s fees and costs for their representation of Swift between March and December 2018. The petition purported to include a detailed itemization of the attorney’s fees and the time incurred, but it is not included in the record. A footnote in the petition stated that the itemization was tendered to Swift’s counsel and the trial court but was not filed. There is no contention by Swift that this itemization was not provided to him and the trial court.

¶ 10 In his response to the petition, Swift argued that Novel held himself out as “of counsel” at AGDG, the charged hourly rates were excessive, and his retainer of $5,000 was not properly applied. He also denied that Novel was an experienced litigator and that he had an outstanding balance of $47,011.07. Swift attached to his response an article from the Illinois Bar Journal, which Swift contended identified categories of fees that are “unacceptable.” According to Swift, AGDG and Novel’s itemization of fees contained charges that were improper, per the attached article, namely the following:

“extensive ‘review,’ preparation for entering continuance orders, preparation for routine court appearances, excessive emails, review of court orders, review and revisions of motions, file reviews, charges to the client for drafting a self-serving attorney lien and other associated charges thereto, drafting of routine documents which should be overhead as

opposed to an attorney drafting a notice and other similar charges all prohibited or criticized in numerous cases.”

Swift asserted that a jury would reduce the claimed charges by at least 50% to no more than $20,000.

¶ 11 In addition to his written response to the fee petition, Swift also filed a “Motion to Set Jury Trial.” In that motion, Swift asserted that because AGDG and Novel’s claim for attorney’s fees was based on a fee agreement between the parties, the claim was essentially one for breach of contract. Therefore, Swift reasoned, he had a constitutional right to a jury trial.

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