Baksinski v. Northwestern University

• Decision Date: 21 May 1992
• Docket Number: No. 1-90-3180,1-90-3180
• Citation: 595 N.E.2d 1106,231 Ill.App.3d 7
• Parties: , 172 Ill.Dec. 436 Gregory BAKSINSKI and Edward Baksinski, Plaintiffs-Appellants, v. NORTHWESTERN UNIVERSITY and YMCA of Metropolitan Chicago, Defendants (City of Chicago, a Municipal Corporation, Intervenor-Plaintiff-Appellee).
• Court: United States Appellate Court of Illinois

Page 1106

595 N.E.2d 1106

231 Ill.App.3d 7, 172 Ill.Dec. 436

Gregory BAKSINSKI and Edward Baksinski, Plaintiffs-Appellants, v. NORTHWESTERN UNIVERSITY and YMCA of Metropolitan Chicago,

Defendants (City of Chicago, a Municipal

Corporation, Intervenor-Plaintiff-Appellee).

No. 1-90-3180.

Appellate Court of Illinois,

First District, Fourth Division.

May 21, 1992.

Rehearing Denied July 16, 1992

Clinton A. Krislov and Jonathan Nachsin of Krislov & Associates, Ltd., Chicago, for plaintiffs-appellants.

Office of the Corp. Counsel, Lawrence Rosenthal, Deputy Corp. Counsel, Benna Ruth Solomon, Chief Asst. Corp. Counsel, and Stan Berman, Asst. Corp. Counsel, Chicago, for appellee.

Justice McMORROW delivered the opinion of the court:

This is an appeal from an order denying an amended petition for attorney fees. The issue on appeal is whether the petitioner, Clinton Krislov, is entitled to compensation for preparing and litigating that fee petition.

In 1983, plaintiffs, Gregory and Edward Baksinski, through their attorney, Sidney Z. Karasik, filed an action as Chicago taxpayers against the City of Chicago and various not-for-profit entities alleging that those entities were improperly being exempted from payment of water and sewer charges. The action sought an accounting and a mandatory injunction requiring the City to collect the water and sewer fees.

In 1985, the City obtained leave to realign itself as a plaintiff. The Baksinskis and Karasik were given leave to remain in the case as monitors of the City's progress in prosecuting the claims. The City and various defendants ultimately reached settlement agreements for back payment of water and sewer charges, which netted the City in excess of $10 million, as well as agreements for the future payment of water and sewer usage fees.

On March 16, 1990, Karasik filed a petition for attorney fees. The petition included a lodestar amount based upon 188.5 hours at a rate of $175 per hour enhanced by the application of a multiplier of two. Through a miscalculation of these figures, Karasik arrived at a total of $56,500.

The City opposed the award of any fees, arguing that there was neither statutory authorization for attorney fees nor a common fund from which fees could be awarded. Alternatively, the City argued that the requested award was excessive, and that if any award were made, it should be no more than $7,070.

Thereafter, Karasik was diagnosed as terminally ill and engaged attorney Clinton Krislov to pursue the fee petition. Krislov was granted leave to appear on May 22, 1990. In lieu of a reply to the City's response to Karasik's fee petition, Krislov filed an amended fee petition in August 1990. The amended petition sought a fee award of 10% of the amounts recovered by the City. In the alternative, Krislov sought fees based upon an "updated" lodestar computation of a $275 hourly rate multiplied by 288 hours, which included the 188.5 hours claimed by Karasik up to July 1986, plus "subsequent time, including preparation of [the] amended petition, believed to total approximately 100 hours through the filing of [the petition]." Krislov then requested that this "working figure lodestar" of $86,400 be enhanced by a multiplier of six, resulting in a total of $518,000. Krislov also requested a $25,000 incentive award to be shared by the Baksinskis for instituting the action.

In its response to Krislov's amended fee petition, the City reiterated the objections it raised in its memorandum in opposition to Karasik's original petition for a fee award of $56,550. The City also strongly opposed Krislov's amended petition arguing, inter alia, that there was no legal basis for either a percentage award, an award of fees for preparation of the amended petition or an incentive award for the Baksinskis; that the theories advanced by Krislov in support of his position were untenable; and that the amounts requested by Krislov were unwarranted and grossly excessive. The City requested that the court reject Krislov's amended petition in its entirety.

A hearing was held on September 18, 1990. The City moved that Krislov's amended petition be stricken. Following argument by counsel, the court rejected the positions advanced by Krislov and "disallowed" the amended petition. The court also rejected the City's assertion that it lacked authority to award attorney fees because there was no "common fund" brought into court from which fees could be drawn. The court observed that as a court of equity, it was empowered with the discretion to award reasonable attorney fees as compensation for Karasik's successful efforts on behalf of the City and the taxpayers. In recognition of Karasik's skill and the substantial benefit his efforts produced, the court allowed all of the hours claimed by Karasik, applied a multiplier of three to the lodestar amount in Karasik's petition, rather than a multiplier of two which Karasik had requested, and ordered a $75,000 fee award. The court also granted a $25,000 incentive award to the Baksinskis for becoming involved in public interest litigation and to encourage others to do so in the future.

On September 25, 1990, Krislov filed a motion for reconsideration and correction of the September 18 order on three matters. He first pointed out the mathematical error in Karasik's original calculation of the lodestar amount. In addition, Krislov argued that the lodestar should have been calculated on the basis of a current market rate of $275 an hour rather than at the lower rate charged by Karasik during the years of the litigation. Finally, Krislov reargued that the court improperly excluded fees for time spent on the preparation of the fee petitions.

The City moved for reconsideration of the incentive award to the Baksinskis, and also filed a response to Krislov's motion for reconsideration. The City acknowledged the mathematical error in Karasik's petition, but maintained that since no legal authorization for an award of fees existed in the first instance, the award granted by the court should not be increased.

The court entered an order in which it (1) corrected the mathematical error in Karasik's original computation of the lodestar and thereby increased the fee award from $75,000 to $98,962.50, based upon a lodestar of $32,987.50 multiplied by three, and (2) vacated the Baksinskis' incentive award. Cross appeals were filed but, following a settlement between Karasik and the City on Karasik's claim for attorney's fees, the City voluntarily dismissed its appeal and the plaintiffs dismissed their appeal as to all issues except the denial of Krislov's petition for fees for his work on the amended fee petition.

It is Krislov's contention that the trial court improperly denied his petition for attorney fees for the time he spent preparing and litigating the fee petitions. He argues that he has spent 300 hours on this litigation and requests that his lodestar for this time, which he computes to be $60,000, be enhanced by the same multiplier of three as was applied to Karasik's lodestar. He advances several lengthy arguments in support of his position. Specifically, he claims that the court's denial of his request for fees was arbitrary, unjustified and unexplained; that cases have held that fee petition and litigation time is compensable; that it is unfair to require an attorney to expend time and effort on a fee petition but not compensate him for it; that failing to compensate an attorney for such work encourages the opponent to engage in extensive "second litigation" to "wear down" attorneys into accepting less than reasonable fees, and, conversely, that awarding fees will discourage the opponent from engaging in a "hardball defense" which protracts the litigation; that his work produced a substantial benefit, in that it greatly increased Karasik's fee and aided the court in setting it; and that a fee award is necessary to encourage attorneys to take public interest cases. When reduced to summary form, Krislov's arguments are founded on the position that denying him fees for his work is inequitable.

The City responds that the court did not abuse its discretion in denying Krislov a separate fee for his work on the fee petition. The City argues that attorney fees accrued in fee litigation involving a common fund are not compensable ¹; that because his amended fee petition was stricken, his work did not even produce a benefit for Karasik; and that, in any case, the amount Krislov requests is grossly excessive.

With respect to awards of attorney fees, the prevailing rule in the United States, often referred to as the "American rule" (Alyeska Pipeline Service Co. v. Wilderness Society (1975), 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d 141; In re Burlington Northern, Inc. (7th Cir.1987), 832 F.2d 430), is that in the absence of statutory authority or a contractual agreement between the parties, a successful litigant may not recover attorney fees or the costs of the litigation from his adversary. Illinois has long adhered to this rule. (Saltiel v. Olsen (1981), 85 Ill.2d 484, 55 Ill.Dec. 830, 426 N.E.2d 1204; Hamer v. Kirk (1976), 64 Ill.2d 434, 1 Ill.Dec. 336, 356 N.E.2d 524; House of Vision v. Hiyane (1969), 42 Ill.2d 45, 245 N.E.2d 468; Ritter v. Ritter (1943), 381 Ill. 549, 46 N.E.2d 41; Constant v. Matteson (1859), 22 Ill. 546, 560.) No claim has been made in this appeal that there was an agreement between the parties or that the statute permitting taxpayer suits on behalf of municipalities (Ill.Rev.Stat.1989, ch. 24, par. 1-5-1) authorizes an award of attorney fees.

The general rule requiring litigants to bear their own costs and attorney fees does not, however, interfere with the historic power of courts of equity to permit an individual, or the attorney of an individual, who creates, preserves or recovers a fund for the benefit of others in addition to himself by instituting, pursuing or settling litigation, to recover costs and reasonable fees...