Aliano v. Transform SR LLC

• Decision Date: 06 November 2020
• Docket Number: No. 1-17-2325,1-17-2325
• Citation: 2020 IL App (1st) 172325,445 Ill.Dec. 657,167 N.E.3d 665
• Parties: Mario ALIANO, Plaintiff-Appellee, v. TRANSFORM SR LLC, as Successor in Interest to Sears, Roebuck and Co., Defendant-Appellant.
• Court: United States Appellate Court of Illinois

2020 IL App (1st) 172325

167 N.E.3d 665

445 Ill.Dec. 657

Mario ALIANO, Plaintiff-Appellee,

v.TRANSFORM SR LLC, as Successor in Interest to Sears, Roebuck and Co., Defendant-Appellant.

No. 1-17-2325

Appellate Court of Illinois, First District, FIFTH DIVISION.

Opinion Filed: November 6, 2020

Francis A. Citera, Jane B. McCullough, and Paul A. Del Aguila, of Greenberg Traurig LLP, of Chicago, for appellant.

Thomas A. Zimmerman Jr., Sharon A. Harris, Nickolas J. Hagman, Matthew C. De Re, and Maebetty Kirby, of Zimmerman Law Offices, P.C., of Chicago, for appellee.

JUSTICE HOFFMAN delivered the judgment of the court, with opinion.

¶ 1 Transform SR LLC (Transform), as successor in interest to Sears, Roebuck and Co. (Sears), appeals from a $267,470 judgment entered by the circuit court in favor of the plaintiff, Mario Aliano, for attorney fees pursuant to section 10a(c) of the Consumer Fraud and Deceptive Business Practices Act (Consumer Fraud Act) ( 815 ILCS 505/10a(c) (West 2008)). For the reasons that follow, we reverse in part, vacate in part, and remand for further proceedings.

¶ 2 This is the third time that this case has come before this court. The matter first came before us on Sears's appeal from a $3.10 judgment entered in favor of the plaintiff on his Consumer Fraud Act claim. As that appeal was filed prior to the trial court having ruled on the plaintiff's pending petition for an award of attorney fees and in the absence of a written finding pursuant to Illinois Supreme Court Rule 304(a) (eff. Feb. 26, 2010), we dismissed the appeal for want of jurisdiction. Aliano v. Sears, Roebuck & Co., 2014 IL App (1st) 132622-U, 2014 WL 4674615 ( Aliano I ). The matter next came before this court on Sears's appeal from both the circuit court's $3.10 judgment in favor of the plaintiff and its award of $157,813.53 in attorney fees. In that appeal, we affirmed the $3.10 actual damage award, but reversed the $157,813.53 attorney fees award. We found that the circuit court erred as a matter of law in admitting an attorney billing statement into evidence in the absence of the plaintiff's production of the original time sheets underlying the statement and in relying upon that statement in calculating the plaintiff's recoverable fees. We remanded the matter back to the circuit court with directions to conduct a hearing to determine the reasonable attorney fees to which the plaintiff is entitled. Aliano v. Sears, Roebuck & Co. , 2015 IL App (1st) 143367, 400 Ill.Dec. 799, 48 N.E.3d 1239 ( Aliano II ). Having reversed the attorney fees award on evidentiary grounds, we never addressed the question of the reasonableness of the award. Id. ¶ 35.

¶ 3 On remand, the plaintiff filed a revised attorney fees petition, seeking an award of $335,971 in fees and $3,376.48 in costs. The plaintiff's revised attorney fees petition is supported by the affidavit of Thomas A. Zimmerman Jr., one of the plaintiff's attorneys and the sole shareholder of Zimmerman Law Offices, P.C. (hereinafter referred to as the Zimmerman Firm). Attached to that affidavit as an exhibit is a billing statement, dated June 17, 2016, containing line item entries for legal services rendered on behalf of the plaintiff in this case for the period from October 27, 2011, through June 17, 2016. Each of the line item entries sets forth a description of the task performed, the date performed, the time taken to perform the task, the initials of the individual performing the task, that individual's hourly billing rate, and the amount charged. Thereafter, the circuit court conducted an evidentiary hearing and awarded the plaintiff $267,470 for attorney fees. Sears timely filed the instant appeal.

¶ 4 After this appeal was fully briefed, Sears commenced a voluntary proceeding under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court). (see In re Sears Holdings Corp. , 613 B.R. 51 (Bankr. S.D.N.Y. 2020), vacated by In re Sears Holdings Corp. , 616 B.R. 615 (Bankr.S.D.N.Y. 2020) ). On October 15, 2018, this court entered an order staying the instant appeal due to the pendency of Sears's bankruptcy proceeding. Thereafter, the Bankruptcy Court entered an order approving an agreement providing for the sale of certain of Sears's assets. In connection with that sale, Transform and its affiliates agreed to assume certain of Sears's obligations. On October 22, 2019, Transform agreed to be substituted in the place of Sears as the real party in interest in this case. On December 23, 2019, the Bankruptcy Court entered an order lifting the automatic stay applicable to this appeal to effectuate the substitution of Transform in the place of Sears and permitting this appeal to continue against Transform, but not against Sears. On January 6, 2020, Sears and Transform filed a motion with this court to substitute Transform as the real party in interest in the place of Sears and to revise the caption of this appeal to reflect the substitution. On January 29, 2020, this court entered an order granting the motion, substituting Transform as the real party in interest in the place of Sears and lifting the October 15, 2018, stay.

¶ 5 During its argument before this court, Transform acknowledged that it adopted the briefs filed by Sears in this appeal. Although the briefs were originally filed on behalf of Sears, henceforth in this opinion, we will refer to the arguments as having been made by Transform.

¶ 6 Transform argues, inter alia, that the circuit court's award on remand of $267,470 in attorney fees pursuant to section 10a(c) of the Consumer Fraud Act is both legally erroneous and an abuse of discretion. In addressing the assignments of error, we have divided the fees awarded by the circuit court into two groups: fees awarded for legal services rendered on behalf of the plaintiff before January 1, 2014 (hereafter referred to as pre-2014 fees), and fees awarded for services rendered after January 1, 2014 (hereinafter referred to as post-January 1, 2014, fees).

¶ 7 We address first the pre-2014 fees. The billing statement attached to the plaintiff's revised attorney fees petition contains 301 line-item entries for legal services rendered before January 1, 2014. Of those entries, 250 relate to services rendered from October 27, 2011, through May 6, 2013, and 51 relate to services rendered from June 4, 2013, through December 31, 2013.

¶ 8 Transform argues that (1) in awarding pre-2014 fees, the circuit court violated the law-of-the-case doctrine and this court's mandate in Aliano II by admitting into evidence and relying upon the plaintiff's exhibits 56 and 57, which were computer printouts dated December 6, 2016, of legal services rendered from October 27, 2011, through May 6, 2013, and from June 4, 2013, through December 31, 2013, respectively; and (2) the testimony of Zimmerman in support of pre-2014 fees was not credible.

¶ 9 The plaintiff offered exhibits 56 and 57 into evidence, and Sears objected. The circuit court took the matter under advisement but never ruled on the admission of those exhibits until its "Memorandum Opinion and Order" entered on August 25, 2017. Although not referring to the exhibits by number, the circuit court held that "secondary evidence may be admitted." The time entries contained in exhibits 56 and 57 are exactly the same as the corresponding time entries contained in the billing statement dated June 17, 2016, attached to the plaintiff's revised attorney fee petition for the period of October 27, 2011, through December 31, 2013.

¶ 10 Our initial focus is on the pre-2014 fees awarded for legal services rendered from October 27, 2011, through May 6, 2013. We begin by addressing Transform's argument that the circuit court's admission into evidence and reliance upon exhibit 56 violated the law-of-the-case doctrine. The plaintiff's revised petition for attorney fees attributable to legal services rendered on his behalf for the period from October 27, 2011, through May 6, 2013, sought an award of fees for the same services that were the subject of Sears's appeal in Aliano II , and the time entries on exhibit 56 are identical to the corresponding time entries on the computerized billing statement dated July 31, 2013, which we found inadmissible as evidence in Aliano II . In Aliano II , the circuit court awarded the plaintiff $157,813.53 for attorney fees incurred for the period of October 27, 2011, through May 6, 2013. Aliano II , 2015 IL App (1st) 143367, ¶ 27, 400 Ill.Dec. 799, 48 N.E.3d 1239. As noted earlier, we reversed that award, finding that, because the plaintiff's attorney had discarded the original time slips underlying the billing statement submitted to the plaintiff and was unable to produce those original time sheets for examination by Sears, the trial court erred in admitting the billing statement into evidence and in relying upon that statement in calculating the plaintiff's recoverable fees. Id. ¶ 34. We noted that,

"[w]hen the original documents have been destroyed by the party offering secondary evidence of their content, the secondary evidence is not admissible unless, by showing that the destruction of the original documents was accidental or was done in good faith and without any intention to prevent their use as evidence, the party offering the secondary evidence repels every inference of fraudulent design in the destruction of the original documents." Id. ¶ 31.

The secondary evidence being referred to in Aliano II was the computerized billing statement dated July 31, 2013. We went on to hold that,

"[h]ad the July 31, 2013, billing statement been excluded from evidence at the time of the September 4, 2013 [sic ], hearing on the fee petition, the plaintiff would have been afforded the opportunity to attempt to establish the reasonable fees to which he is entitled by means other than the billing statement . It is for this reason that we remand this matter back to the trial

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