Lossman v. Lossman

• Decision Date: 13 July 1995
• Docket Number: Nos. 2-94-1071,2-94-1138,s. 2-94-1071
• Citation: 210 Ill.Dec. 818,653 N.E.2d 1280,274 Ill.App.3d 1
• Parties: , 210 Ill.Dec. 818 Sarah Vivian LOSSMAN, Plaintiff, v. Harvey LOSSMAN et al., Defendants-Appellees and Counterdefendants and Cross-Appellants (Eugene Lossman et al., Defendants; Hercules Paul Zagoras, Defendant-Appellant and Counterplaintiff and Cross-Appellee).
• Court: United States Appellate Court of Illinois

Page 1280

653 N.E.2d 1280

274 Ill.App.3d 1, 210 Ill.Dec. 818

Sarah Vivian LOSSMAN, Plaintiff, v. Harvey LOSSMAN et al., Defendants-Appellees and Counterdefendants and Cross-Appellants (Eugene Lossman et al., Defendants; Hercules Paul Zagoras, Defendant-Appellant and Counterplaintiff and Cross-Appellee).

Nos. 2-94-1071, 2-94-1138.

Appellate Court of Illinois Second District.

July 13, 1995.

Rehearing Denied Sept. 5, 1995.

Hercules Paul Zagoras, Waukegan, pro se.

Julian Johnson, Waukegan, for Edward Lossman, Harvey Lossman.

Justice GEIGER delivered the opinion of the court:

The counterplaintiff, Hercules Paul Zagoras (Zagoras), brought this action against the counterdefendants, Harvey and Edward Lossman (collectively the Lossmans), to recover attorney fees he incurred in his previous representation of the Lossmans. In the counterclaim, Zagoras sought to foreclose a mortgage received from the Lossmans in the amount of $22,631.71, representing unpaid trial fees, fees on appeal, a $10,000 bonus, interest accrued at 5% from a previous mortgage between the parties, plus 12% interest from the date of the new mortgage. In addition, Zagoras sought to recover $1,406.25 in post-appeal services performed after the execution of the mortgage. The trial court denied the request for trial fees, denied recovery of any post-appeal fees, and found that Zagoras was not entitled to the $10,000 bonus fee. The court did, however, award him $7,600 in appeal fees and costs, but at 5% interest. Both parties appealed the trial court's determination. For the reasons which follow, we affirm in part, reverse in part, and remand.

In 1988, the Lossmans, both retirees, hired Zagoras to defend them against Calvary Temple Assembly of God Church in a real estate contract action involving property they owned in Lake County, Illinois (the property). The parties agreed to the payment of a $3,000 retainer and fees at a rate of $125 an hour. On August 31, 1989, the court found against the Lossmans on the contract. Directly after the trial, the Lossmans, Zagoras, and Donna Boyer, counterdefendant Harvey Lossman's daughter, met in Zagoras' office to discuss the possibility of an appeal. Both Boyer and Zagoras testified that he quoted the Lossmans a flat rate fee of $7,000 to handle the appeal, plus a $10,000 "bonus" if he won.

On September 1, 1989, Zagoras informed the Lossmans by letter that they had until September 30, 1989, to file a notice of appeal, and that they would have to request a stay prior to that date. In the letter, Zagoras reiterated that his fee on appeal would be a flat rate of $7,000, plus costs of approximately $700. He did not mention anything about a $10,000 bonus in the letter, but included a statement for existing fees and expenses in the amount of $10,338.30. He stated that he hoped that the Lossmans could pay most of this statement, and that he would wait for his appeal fees. He further noted that he wanted an acknowledgment of the balance of the debt, as well as an agreement as to appeal fees, in writing.

In letters dated September 11 and September 15, 1989, Zagoras again reminded the Lossmans of the September 30 deadline. Following the September 15 letter, Harvey advised Zagoras that he was going to bring in two people to sign an appeal bond. Zagoras subsequently filed the appeal bond, a motion for stay, and a notice of appeal before the September 30 deadline.

On October 2, 1989, the Lossmans met with Zagoras at his office. Harvey had previously informed Zagoras that he could not pay anything more on the trial court fees, having paid $6,000 since the September 1, 1989, statement. At the meeting, Zagoras presented to the Lossmans a letter, note, and mortgage on the property, all three of which they signed. The letter stated that the unpaid balance of Zagoras' fees was $4,338.30, and that he agreed to represent them on appeal and advance court costs for a total of $7,600. The letter also indicated that the Lossmans had signed a note and mortgage in the amount of $11,938.30, at 5% interest. Finally, the letter stated that, by their signatures, the Lossmans agreed that Zagoras would be entitled to a $10,000 bonus if he prevailed on appeal, explaining that the bonus would be additional to the note and mortgage if he won. The note was made payable on November 1, 1990, or "wheneve[r] the Second Appellate District Court rules, whichever comes later."

The appellate court ruling in favor of the Lossmans was issued late in July 1990, reversing the trial court without remand. The court later denied reconsideration of its ruling, and the Calvary Temple Assembly of God Church petitioned for leave to appeal to the Illinois Supreme Court. In a letter dated November 28, 1990, Zagoras informed the Lossmans that the note and mortgage for $11,938.30 was now due. He further noted that he had been promised a $10,000 bonus in the event he won the appeal; but because the supreme court had not ruled on the petition, the bonus was not yet due.

On December 20, 1990, following the supreme court's dismissal of the appeal, Zagoras again wrote to the Lossmans. He advised them that he had rewritten the note and mortgage and increased the interest rate to 12%, and told them that he would cancel the old note once they signed the revised note and mortgage.

On January 8, 1991, the Lossmans executed a new note and mortgage in the amount of $22,631.71, dated back to December 1, 1990. The note was made payable on December 1, 1991. Zagoras testified at trial that he calculated the new amount by adding the $10,000 bonus to the previous note amount of $11,938.30, plus interest from October 2, 1989, to December 1, 1990. Upon the signing of the new documents, Zagoras marked the old note "CANCELLED" and returned it to the Lossmans.

On May 26, 1992, Sarah Vivian Lossman, plaintiff herein and a co-owner of the property, filed a complaint for partition of the property. Zagoras, Harvey, and Edward were all named defendants, as well as Eugene Lossman, another co-owner of the property.

On July 20, 1992, Zagoras filed an answer and counterclaim in the nature of a cross-claim against Harvey and Edward. Count I of the counterclaim sought to recover $1,406.25 in fees for 11.25 hours of post-appeal services performed between November 15, 1990, and June 25, 1991. Count II of the counterclaim sought to foreclose on the December mortgage.

On April 25, 1994, following a bench trial, the court rejected Zagoras' claim for $4,338.30 in trial fees, citing his failure to detail adequately the services performed to support his claim. The court further stated that "the agreements regarding the increased interest rate on the New Note and the $10,000 bonus were made after the fiduciary relationship between [Zagoras] and [the Lossmans] had been established" and, as such, they required a showing of clear and convincing evidence to overcome the presumption of undue influence. Finding that Zagoras did not advise his clients to seek independent counsel prior to signing the new note, that he failed to disclose all relevant information affecting the new note, such as the reasoning for the increased rate of interest, and that the new note was not supported by adequate consideration, the court concluded that Zagoras failed to rebut the presumption of undue influence. The court thus found that Zagoras was not entitled to the 12% interest rate specified in the new note. The court also rejected Zagoras' claim for the $10,000 bonus, but on the ground that "the record [did] not contain facts that the bonus agreement was supported by adequate consideration since the parties had previously agreed that the $7,600 [in appeal fees] would cover the expenses and costs of appeal." Moreover, the court allowed the $7,600 in appeal fees at a rate of 5% interest as supported by adequate consideration. The April 25 order did not address Zagoras' claim for post-appeal fees.

Both parties filed post-trial motions challenging the trial court's order. On August 24, 1994, the court reaffirmed its April 25, 1994, order in all respects, and expressly denied the claim for additional fees. The court further directed Zagoras to prepare a release of his mortgage on the property. Both parties timely appealed the court's order; on this court's own motion, the appeals were consolidated.

We first address whether the trial court erred in finding that Zagoras failed to prove his claim for $4,338.30 in trial fees. Although the record contains a statement from Zagoras to the Lossmans listing the services performed and attributing a total of 82.50 hours spent, the statement does not indicate the time spent on each item or otherwise break down the charges. Zagoras argues, however, that he was absolved of any duty to introduce evidence as to his fees due to the Lossmans' judicial admissions.

The burden of proving the reasonable value of the services performed clearly rests with the attorney, who is required to submit evidence to the trial court from which it can make a reasoned decision in accordance with applicable law. (In re Marriage of Malec (1990), 205 Ill.App.3d 273, 290, 150 Ill.Dec. 207, 562 N.E.2d 1010.) Even so, a fact admitted in a pleading constitutes a judicial admission, making it unnecessary for the opposing party to introduce evidence in support thereof. (DiBenedetto v. County of Du Page (1986), 141 Ill.App.3d 675, 681, 96 Ill.Dec. 199, 491 N.E.2d 13.) The judicial admission is conclusive upon the party who made it, and as such may not be later controverted at trial or on appeal. Sohaey v. Van Cura (1992), 240 Ill.App.3d 266, 280-81, 180 Ill.Dec. 359, 607 N.E.2d 253.

Here, in his count to foreclose the December mortgage, Zagoras averred that the amount of original indebtedness was $22,631.71. In their verified answer, the Lossmans denied the $22,631.71 figure, but "state[d] the fact to be that the correct amount of the original indebtedness [was] $11,698.30, and that as to any sum in...