Marriage of Malec, In re

• Decision Date: 10 October 1990
• Docket Number: No. 1-89-0314,1-89-0314
• Parties: , 150 Ill.Dec. 207, 59 USLW 2326 In re The MARRIAGE OF John MALEC, Petitioner-Appellee, and Mickie Flanagan, Respondent (Jerome N. Zurla, Appellant).
• Court: United States Appellate Court of Illinois

Page 1010

562 N.E.2d 1010

205 Ill.App.3d 273, 150 Ill.Dec. 207,

59 USLW 2326

In re The MARRIAGE OF John MALEC, Petitioner-Appellee,

and

Mickie Flanagan, Respondent (Jerome N. Zurla, Appellant).

No. 1-89-0314.

Appellate Court of Illinois,

First District, Third Division.

Oct. 10, 1990.

Gary A. Weintraub, Chicago, for appellant.

Leland W. Hutchinson, Jr., Elizabeth D. Sharp of Freeborn & Peters, Chicago, for petitioner-appellee.

Justice FREEMAN delivered the opinion of the court:

This is an appeal of an order of the circuit court denying Jerome Zurla's ("Zurla") petition for additional attorney fees.

This case originated as a dissolution of marriage between John Malec ("Petitioner") and Mickie Flanagan. Petitioner entered into an agreement with Stuart Litwin ("Litwin") to retain the law firm of Litwin, Zurla and Stein ("LZ & S") to represent him in the dissolution of his marriage. Litwin required, and petitioner paid, a $15,000 retainer fee. Petitioner was told that the remainder of the fees would be settled, based on performance, at the end of the case. There was no written contract memorializing the agreement.

In June 1986, the LZ & S firm dissolved. Litwin and Zurla entered into an agreement with respect to the dissolution of the partnership which specified how the firm's work in progress, including petitioner's dissolution of marriage case, would be handled, and how post-partnership dissolution fees paid to either Litwin or to Zurla would be divided. Specifically, the agreement provided that Zurla would receive 40% and Litwin would receive 60% of any future fees paid on petitioner's case to either Zurla or to Litwin.

Subsequent to the partnership dissolution, both Zurla and Litwin continued to represent petitioner. In August 1986, at the suggestion of Litwin and Zurla, petitioner hired the firm of Jenner & Block as additional counsel on the case. Thomas Sullivan, William Suriano and other Jenner & Block attorneys were actively involved. In January 1987, petitioner discharged Litwin, but continued to be represented by Zurla and the Jenner & Block attorneys.

Early in 1987, petitioner offered to pay Zurla $1 million if he obtained certain results in his dissolution of marriage. On June 5, 1987, petitioner met with Zurla to discuss the payment of fees. The meeting occurred in Edward Vrdolyak's office, however, Vrdolyak was not present for the discussion. According to petitioner, Zurla demanded a $3 million fee. Petitioner was incensed and stated that the only fee previously promised was the $1 million fee, contingent upon the achievement of certain results. Petitioner stated that he did not owe Zurla $1 million because those contingencies had not been met. Zurla stated that he was only kidding when he suggested that he be paid $3 million.

On the following day, petitioner discharged Zurla as his attorney. Subsequently, petitioner and Zurla attempted to negotiate a settlement on the amount of fees. While a figure of $751,000 was discussed, no agreement was reached, and no additional fees have been paid.

It is undisputed that from the time petitioner began his dissolution action he has paid a total sum of $742,620 in connection with attorney fees, disbursed in the following manner:

1) $15,000 initial retainer paid to LZ & S in December 1985,

2) $135,000 additional retainer paid to LZ & S in July 1986,

3) 4 additional monthly payments of $15,000 each to Zurla between January and April 1987,

4) $150,000 paid to Litwin in June 1987,

5) $105,000 paid on a personal guaranty loan to Harris Bank for Chicago Vote '87, and

6) $188,810 paid to Jenner & Block.

In Zurla's second amended fee petition, he petitioned the court to award him fees in the amount of $1 million in quantum meruit and alternatively, that the court award him $751,048.75 on a theory of accord and satisfaction. After a hearing, the trial court denied the fee petition and declined to award any additional fees. It is from this denial that Zurla now appeals. For the reasons stated below, we reverse and remand.

This case involves many facts and voluminous records. In the interest of brevity and clarity, relevant facts will be discussed in the body of this opinion as they pertain to the issues presented.

Zurla first contends that the trial court's decision was based on a fundamentally erroneous approach. He argues that the court erroneously credited payments made by petitioner against the $1 million fee. We will address each disputed credit in turn.

The Jenner & Block Payment

There is no dispute that petitioner independently retained the services of the Jenner & Block attorneys. Zurla argues that the trial court erroneously credited him with the $188,810 payment which petitioner made to Jenner & Block. His argument is premised on two points. First, Zurla claims that petitioner, in his closing argument, stated that he was entitled to a credit for all fees paid by him to all of the lawyers in the case. Second, following petitioner's argument, the judge commented specifically that "over $180,000 [had been] paid to other lawyers at the firm of Jenner & Block."

The record reveals that in closing argument, petitioner stated that he had paid $465,000 to or on behalf of Zurla and his partner. He concluded that, including Jenner & Block's fees for this case, his total bill was over $723,000. Petitioner did not request that the Jenner & Block fees be credited against the Zurla bill.

Zurla has cited this court to the record of proceedings wherein the trial court stated its findings. However, we have not been provided with that portion of the record and we therefore decline to attach a meaning to the quoted statements of the court without benefit of considering them in their proper context. Moreover, the comments which Zurla quotes as having been "mentioned by the court" do not indicate to us that the court credited the Jenner & Block fees against him.

There is no requirement that the trial court make specific findings regarding fee awards (See In re Marriage of Kosterka (1988), 174 Ill.App.3d 954, 960-61, 124 Ill.Dec. 295, 529 N.E.2d 12), and we decline to infer, merely from the denial of additional fees, that the court, in fact, credited Zurla with the Jenner & Block fees. That notwithstanding, we do agree with Zurla that any such credit would have been error. Thus, on remand, if the court did erroneously credit the Jenner & Block fees, it should make the necessary adjustment.

The Litwin Payment

In January 1987, petitioner discharged Litwin as his divorce attorney. In a letter addressed to Litwin at "Litwin, Zurla & Stein," petitioner stated that he had been dissatisfied with Litwin's performance, and noted that he had already paid LZ & S $150,000. Petitioner wrote, "in the hopes that we still may have success and to avoid argument as to whether your efforts may have been partly responsible, I will agree to pay you an additional $150,000 fee upon fulfillment of [specified] conditions." Included in the list of conditions was Litwin's cooperation in transferring all files pertaining to the case, that petitioner obtain not less than joint custody and 50% time with his children, that the children be ordered to be schooled at the Latin school and that petitioner be able to keep all the stock that was then in his name. Petitioner concluded the letter by stating that he realized that Litwin could not ensure those results without being in the case and invited him to informally contact Zurla or Tom Sullivan from Jenner & Block with his "strategic suggestions, etc."

Petitioner testified that Litwin, from the time he was discharged, continued to work on the case. He described that Litwin transferred all of the files and records, cooperated in briefing some of the medical experts, and cooperated with the Jenner & Block attorneys. In July 1987, one month after petitioner discharged Zurla, he paid Litwin the $150,000. He stated that he paid Litwin the $150,000 because he had "offered it to him and [he] felt the conditions were close enough to be met that [he] would pay him the amount."

Zurla argues that there was no justification for crediting the payment to Litwin against the $1 million fee because petitioner made the payment voluntarily, without being billed or solicited for payment from Litwin.

Petitioner urges that the payment to Litwin was properly credited to Zurla based on principles of agency and partnership law. He argues that at the time this payment was made, the LZ & S partnership, though dissolved, was still in existence. Under the LZ & S partnership dissolution agreement, future fees received on the petitioner's case were to be divided among the partners.

Litwin testified that at the time the partnership dissolution agreement was drawn, he and Zurla anticipated receiving the fees together, and the agreement pertained to fees paid to either of them. However, Zurla took the position that when Litwin was discharged, Zurla was also discharged, and then rehired individually by Malec.

In March 1987, Litwin received a document from Zurla which proposed that each of them would keep whatever fees either of them had received or would receive in the future. The document further stated that Litwin would not share in any of the fees that Zurla might receive from petitioner. Zurla's signature was on the document; however, Litwin did not sign it. There has been no agreement to rescind the partnership dissolution agreement.

Petitioner testified that he knew that after he had discharged Litwin, he would have to pay Zurla independently. He also stated that it was his understanding from Litwin and Zurla that all fees paid to either of them would be divided between the two. Petitioner further testified that Zurla continually told him that he was worried about his obligation to Litwin, that the fees might have to be split, and asked if petitioner would help him to get out of that agreement.

Petitioner's testimony concerning the payment of...