Fox v. Seiden
| Citation | 887 N.E.2d 736 |
| Decision Date | 21 April 2008 |
| Docket Number | No. 1-06-2323.,1-06-2323. |
| Parties | Horace FOX, Jr., Trustee in Bankruptcy for Miriam Draiman, Plaintiff-Appellant, v. Glenn SEIDEN; Sara M. Collins; Glenn Seiden and Associates, P.C.; an Illinois Professional Corporation, and Azulay, Horn and Seiden, LLC, an Illinois Limited Liability Company, Defendants-Appellees. |
| Court | United States Appellate Court of Illinois |
Ashman Law Offices, LLC, Chicago, IL, for Plaintiff-Appellant.
Elliot R. Schiff, Esq. Schiff, Gorman & Krkljes, Chicago, IL, for Defendants-Appellees.
The plaintiff, Horace Fox, Jr., as trustee in bankruptcy for Miriam Draiman, filed a one-count amended verified complaint against the defendants, Glenn Seiden, Sarah M. Collins, Glenn Seiden & Associates, P.C., and Azulay, Horn & Seiden, LLC,1 alleging legal malpractice. The plaintiff's legal malpractice claim arises from a judgment ordering Miriam to pay more than $1 million in attorney fees. It is Miriam's position that she is not liable for the attorney fees and, but for the law firm's negligence, the judgment for fees would not have been entered against her. Upon the law firm's motion pursuant to section 2-615 of the Code of Civil Procedure (the Code) (735 ILCS 5/2-615 (West 2004)), the trial court dismissed the verified amended complaint, finding it failed to properly allege actual damages and proximate cause. The plaintiff appeals. We reverse.
Because this case arises upon a section 2-615 motion to dismiss, the facts are taken from the face of the plaintiff's amended complaint and the attached documents. Iseberg v. Gross, 227 Ill.2d 78, 81, 316 Ill.Dec. 211, 879 N.E.2d 278 (2007).
The legal malpractice complaint at issue in this appeal stems from the law firm's representation of Miriam Draiman, her husband Yehuda Draiman, and several corporations held by Miriam, in the final stages of the case, Multiut Corp. v. Draiman, Nos. 01 CH 9989, 01 CH 20337, filed in the circuit court of Cook County in 2001 (the underlying litigation).
The underlying litigation involved a bitter family dispute. Yehuda's brother, Nachshon, was the president of Multiut Corporation (Multiut), which provides energy consulting and energy management services. Yehuda and Miriam were both Multiut employees.
In its 10-count complaint, Multiut alleged Yehuda and Miriam, with the intent of confusing Multiut's customers, conspired to divert business from Multiut by forming various corporations, including M. Draiman Corporation, Multiut Electric, Incorporated, U.S. Gas & Energy Corporation, U.S. Gas, Electric & Telecommunications Corporation, and U.S. Utilities Corporation (the corporate defendants). Count V of the complaint alleged Yehuda and the corporate defendants, but not Miriam, violated provisions of the Illinois Uniform Deceptive Trade Practices Act (the Act) (815 ILCS 510/1 et seq. (West 2000)). In addition to injunctive relief and monetary damages, Multiut sought payment of attorney fees and costs in count V. Count VII, the only count in which Miriam was individually named, alleged Yehuda, Miriam, and some of the corporate defendants committed civil conspiracy in diverting business from Multiut.
Yehuda, Miriam, and the corporate defendants were initially represented in the underlying action by the law firm. The law firm subsequently withdrew, and Yehuda, Miriam, and the corporate defendants were represented by Altheimer and Gray. Following a bench trial that lasted several weeks, the trial court found in favor of Multiut in an order entered on January 17, 2003. Relevant to this appeal, the trial court assessed damages in the amount of $250,000 against Miriam. The court also assessed damages against Yehuda and granted injunctive relief. Regarding count V, the court stated, "[H]aving found that Yehuda Draiman has purposely engaged in deceptive trade practices, it is this court's determination that attorneys' fees and costs in connection with the prosecution of this cause be awarded to the Plaintiff and against the Defendants." The court ordered counsel for Multiut to submit an accounting of fees and costs within 30 days.
Altheimer and Gray subsequently withdrew from the case. On March 11, 2003, the law firm was retained again and filed a limited appearance "for [the] purpose of any post-trial motions prior to appeal."
On August 26, 2003, the trial court entered an order drafted by Multiut's attorney stating, in relevant part, "Judgment is entered on behalf of plaintiff and against defendants in the amount of $1,002,046." The law firm, on September 19, 2003, filed a "Motion to Clarify the Judgment Order of January 17, 2003 and Order of August 26, 2003" ("motion to clarify"). On September 22, while the motion to clarify was pending, the law firm filed a notice of appeal. The trial court, on September 30, ruled it lacked jurisdiction to consider the motion to clarify "in light of the pending appeal."
Yehuda and Miriam sought review of the trial court judgment in this court. Yehuda was initially represented on appeal by the law firm, and Miriam and the corporate defendants were represented by different counsel. During the lengthy history of the appeal, the law firm filed a motion to withdraw. We allowed the motion, and Yehuda proceeded on appeal pro se.
On January 30, 2004, one justice of this court entered an order finding that because Miriam was not named as a defendant in count V of the underlying complaint—the count that resulted in the $1,002,046 attorney fee award—she was not liable as to that portion of the judgment. Multiut filed a petition for leave to appeal that order in our supreme court. Miriam's counsel was also permitted to withdraw, and Miriam proceeded pro se.
While leave to appeal the January 30, 2004, order was pending, this court, on July 22, 2005, filed an opinion affirming the judgment of the trial court. Multiut Corp. v. Draiman, 359 Ill.App.3d 527, 295 Ill.Dec. 818, 834 N.E.2d 43 (2005). In our opinion, we concluded that the evidence at trial established the defendant corporations were the alter egos of Yehuda and Miriam. Multiut, 359 Ill.App.3d at 533, 538, 295 Ill.Dec. 818, 834 N.E.2d 43. In response to Yehuda's contention that the $1,002,046 attorney fee award was unreasonable, we relied on the proposition that issues raised in a notice of appeal but not argued in the appellate court are waived for purposes of appeal. We held Yehuda forfeited his contention because it was not made in his opening brief. Multiut, 359 Ill.App.3d at 539, 295 Ill.Dec. 818, 834 N.E.2d 43. Regarding Miriam's liability for the attorney fee award, we stated:
"As to Miriam's liability for the fee award, she makes no argument other than remarking in the conclusion of her appellate brief that this court `reversed the assessment of * * * attorney fees.' Miriam presumably refers to the * * * order entered on January 30, 2004, and signed by one justice of this court * * *.
Multiut argues that although Miriam apparently refers to the January 2004 order in contending that this court has reversed the fee award, that order has no effect on this appeal. Multiut asserts that an order signed by one appellate court justice has no operative effect, and it has appealed that issue to the Illinois Supreme Court [citation].
Multiut contends that Yehuda and Miriam, in their joint answer to Multiut's petition in support of the fee award, did not argue that Miriam was not liable for the fees. Multiut points out that Miriam was represented by counsel at the hearing on the fee petition who did not contest her liability, and that although Miriam later argued in a motion to clarify the fee award that her liability should be reduced because of her lower degree of culpability, she did not assert that she bore no liability for the fee award." Multiut, 359 Ill.App.3d at 539-40, 295 Ill.Dec. 818, 834 N.E.2d 43.
We held Miriam's challenge to the fee award was forfeited for purposes of review, as she failed to respond to Multiut's arguments and "offer[ed] no legal argument that would free her from the judgment against her and the other defendants." Multiut, 359 Ill.App.3d at 540, 295 Ill.Dec. 818, 834 N.E.2d 43. We also noted that at the time our opinion was entered, the supreme court had not yet ruled on Multiut's appeal of the January 30, 2004, order. Multiut, 359 Ill.App.3d at 540, 295 Ill.Dec. 818, 834 N.E.2d 43.2
On May 23, 2005, Miriam filed a chapter 13 (11 U.S.C. § 1301 et seq. (2000)) bankruptcy petition in the Northern District of Illinois. The bankruptcy court converted the petition to a chapter 7 (11 U.S.C. § 701 et seq. (2000)) petition. On July 1, Multiut filed a motion for relief from the automatic stay in which it requested that the court lift or modify the automatic stay. On July 25, the court granted Multiut's motion.3
On March 27, 2006, the plaintiff filed a one-count amended verified complaint alleging legal malpractice. The complaint alleged Miriam and the law firm entered into an attorney-client relationship, the law firm had certain duties arising out of the attorney-client relationship, and the law firm breached its duties in three ways: (1) by failing to argue to the trial court that it lacked authority to award attorney fees against Miriam under the Act because she was not a named defendant in that claim; (2) by failing to catch the imprecise language used in the August 26, 2003, order that the judgment of $1,002,046 was entered against the "`defendants' generally rather than [the] `defendants named in Count V * * * for violations of the [Act]'"; and (3) by failing to preserve the liability for attorney fees issue for appeal.
The amended complaint made several factual allegations. It alleged that at the August 26, 2003, hearing on...
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