Reiniche v. Paul

2021 IL App (1st) 192488-U
CourtAppellate Court of Illinois
DecidedJanuary 19, 2021
Docket1-19-2488
StatusUnpublished

This text of 2021 IL App (1st) 192488-U (Reiniche v. Paul) 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
Reiniche v. Paul, 2021 IL App (1st) 192488-U (Ill. Ct. App. 2021).

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. 1-19-2488

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’

-2- 1-19-2488

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,

-3- 1-19-2488

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

-4- 1-19-2488

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Bluebook (online)
2021 IL App (1st) 192488-U, Counsel Stack Legal Research, https://law.counselstack.com/opinion/reiniche-v-paul-illappct-2021.