Marriage of Pagano, In re

• Decision Date: 13 April 1989
• Docket Number: No. 2-88-0648,2-88-0648
• Citation: 537 N.E.2d 398,181 Ill.App.3d 547,130 Ill.Dec. 331
• Court: United States Appellate Court of Illinois
• Parties: , 130 Ill.Dec. 331 In re MARRIAGE OF Janet PAGANO, Petitioner-Appellant, and Thomas Pagano, Respondent, (Rinella & Rinella, Ltd., Appellee).

Page 398

537 N.E.2d 398

181 Ill.App.3d 547, 130 Ill.Dec. 331

In re MARRIAGE OF Janet PAGANO, Petitioner-Appellant, and Thomas Pagano, Respondent, (Rinella & Rinella Ltd., Appellee).

No. 2-88-0648.

Appellate Court of Illinois,

Second District.

April 13, 1989.

Joanne P. Pitulla (argued), Rathje Woodward Dyer, Chicago, for Janet pagano.

Richard A. Rinella (argued), Rinella and Rinella, Ltd., Chicago, for Rinella & Rinella, Ltd.

Lee A. Marinaccio, Botti, Marinaccio, DeSalvo & Pieper, Ltd., Oak Brook, for Thomas Pagano.

Justice INGLIS delivered the opinion of the court:

This is an appeal by petitioner, Janet Pagano, from the denial of a section 2-1401 petition to vacate an order for attorney fees awarded to Rinella & Rinella, Ltd. (Rinella). Ill.Rev.Stat.1985, ch. 110, par. 2-1401 (formerly section 72 of the Civil Practice Act (Ill.Rev.Stat.1979, ch. 110, par. 72)).

On appeal, petitioner contends that (1) the trial court lacked subject matter jurisdiction to enter fee awards in the absence of any pleading to seek such awards; (2) Rinella did not have standing in the absence of a fee petition; (3) petitioner was entitled to relief pursuant to section 2-1401 of the Code of Civil Procedure; (4) petitioner is entitled to a hearing on the reasonableness and necessity of attorney fees; (5) Rinella had a fiduciary duty to petitioner which prevented it from entering into agreed orders with petitioner for attorney fees; (6) the agreed orders were not final orders which could be recorded as liens against marital property; (7) the agreed orders cannot stand in absence of proof as to the reasonableness of the fees; (8) the agreed orders violated section 2-1301 of the Code of Civil Procedure; and (9) Rinella through its conduct has forfeited its right to collect attorney fees. We reverse and remand.

In her dissolution of marriage proceedings against Thomas Pagano, petitioner was represented by Rinella. On June 2, 1986, during the course of this proceeding, an agreed order was entered in the amount of $20,000 in favor of Rinella and against petitioner. That order provided:

"That Janet B. Pagano, having been advised of her right to a full and complete hearing with respect to her attorney's fees under section 508 of the Illinois Marriage and Dissolution of Marriage Act, and having knowingly waived her right to said hearing, agrees that she shall pay RINELLA & RINELLA, LTD. the sum of TWENTY THOUSAND ($20,000) DOLLARS as and for additional fees she has already paid said law firm.

2. That judgment is hereby awarded RINELLA & RINELLA against JANET P. PAGANO for said sum and said judgment shall be a lien against her interest in the residence located at 7 South 441 Donwood Drive, Naperville, Illinois, until paid in full."

On May 18, 1987, again during the course of the proceedings and prior to any judgment of dissolution, a second agreed order with substantially the same language was entered in favor of Rinella for $30,000 against Janet B. Pagano. With regard to this order, the trial court queried petitioner as follows:

"THE COURT: On the record, Mrs. Pagano, your attorney has just handed me an order which bears your signature acknowledging that you owe the firm of Rinella & Rinella the sum of $30,000 for their fees in their representation of you in this cause.

MRS. PAGANO: Yes, your Honor.

THE COURT: And you signed that order, is that correct, Mrs. Pagano?

MRS. PAGANO: That's correct."

We note that the first order has never been released or modified. Therefore, after entry of the second order, Rinella had and still has a total of $50,000 in judgments against petitioner.

On July 27, 1987, William J. Stogsdill filed an appearance as additional counsel on behalf of petitioner.

On September 14, 1987, Rinella was granted leave to withdraw as attorney of record for petitioner.

After obtaining the two judgments totalling $50,000, Rinella filed a petition for attorney fees on September 21, 1987. This petition was extensive. It requested fees for two attorneys for a total of 235.10 hours with hourly fees ranging from $125 an hour to $200 an hour. The total fees requested were in the amount of $37,034.15, $700 of which had been paid. Rinella prayed for a judgment of $36,334.15 and for such other relief as equity required. Attached to the petition was a breakdown alleging that various work had been performed and the time spent on such work.

Judgment for dissolution of marriage was entered on September 21, 1987.

On December 2, 1987, a hearing was held on Rinella's petition for attorney fees. Rinella did not present any evidence but stated that it was standing on the order entered on May 18, 1987, and on its petition for attorney fees. In ruling, the following colloquy occurred:

"THE COURT: Mr. Rinella, you give me no choice other than to state that the Court has previously entered an order and made a finding by the entry of that order relative to the reasonableness of the fees that were agreed to between you and your client for the sum of $30,000.00.

That order was entered in May of 1987. There has been no motion to vacate or set the order aside. The judgment has been entered in this case, is that correct?

MR. MARINACCIO: Yes, your Honor.

THE COURT: There has been no notice to appeal that I am aware of filed in this case, is that correct?

MR. RINELLA: No, there isn't.

THE COURT: And more than 30 days have passed since judgment was entered.

MR. RINELLA: That's correct.

THE COURT: But I can't see, Mr. Rinella, without further testimony or evidence that I can't award additional attorney's fees.

MR. RINELLA: Well, Judge, we are standing on our petition.

THE COURT: The law is quite clear especially in the Second District, Mr. Rinella, that you have to set forth testimony and time sheets and a lot of other things.

MR. RINELLA: We do have that attached to our petition, Judge.

THE COURT: As I said before, I think I am correctly stating the law in the Second District as I understand it is that the mere filing of the petition and standing on that petition is not sufficient cause for the Court to award fees. There is a modification in the Second District.

MR. RINELLA: Well, we would ask leave to put the case on, Judge.

THE COURT: Well, that is what I asked you to begin with.

MR. RINELLA: It is discretionary with you whether or not--

THE COURT: I am not going to grant that. There is an order of Court. That order is to remain in effect."

On December 2, 1987, an order was entered which (1) denied the petition for attorney fees from Thomas Pagano and further stated, "the order entered on May 18, 1987, awarding Rinella & Rinella fees of THIRTY THOUSAND ($30,000) DOLLARS shall be the total fees awarded to Rinella & Rinella on this cause."

Also on December 2, 1987, William Stogsdill was granted leave to withdraw as attorney of record for petitioner.

On February 11, 1988, petitioner moved pursuant to section 2-1401 to vacate the order entered on May 18, 1987, and to vacate the order entered on December 2, 1987.

On March 7, 1988, Rinella filed a motion to strike the petition to vacate. On March 7, 1988, an order was entered which provided that attorney Joanne Pitulla was denied leave to represent petitioner solely as to the section 2-1401 petition and further provided that leave was granted to withdraw the section 2-1401 petition to vacate.

On April 15, 1988, petitioner filed a section 2-1401 petition to vacate the orders entered on May 30, 1986 (from the description of the order we take this to mean the order of June 2, 1986), May 18, 1987, and December 2, 1987. An affidavit in support of this petition was also filed on April 15, 1987. The section 2-1401 petition alleged, among other things, that on May 14, 1987, just prior to the commencement of trial of the dissolution action, Richard A. Rinella told petitioner that he would not represent her at the trial if she did not immediately agree to pay Rinella $30,000 and sign an order to that effect; that petitioner signed the order because of the threat; that in May 1986, Richard Rinella and Steven Russo, an attorney with the Rinella firm, told petitioner that she had to sign an agreed order for $20,000 in favor of Rinella as security for their fees and further told her that this was normal procedure and that she should not worry about the fees since her husband would be responsible as he had the ability to pay and she did not; that no itemized statements were submitted to petitioner; that no retainer agreement had been executed between petitioner and Rinella; that no hourly rates for the services of Rinella were ever disclosed to petitioner; and that on numerous occasions Richard Rinella and Steven Russo assured petitioner that they would seek the payment of their fees from respondent, Thomas Pagano.

Rinella subsequently filed a motion to strike and dismiss the section 2-1401 petition.

The trial court heard arguments regarding the section 2-1401 petition and thereafter granted Rinella's motion to strike the petition finding that petitioner lacked due diligence.

We initially note that Rinella contends that petitioner is attempting to use a section 2-1401 petition as a substitute for appeal. The purpose of a section 2-1401 petition is to bring to the trial court's attention facts not of record which if known by the trial court at the time judgment was entered would have prevented entry of the judgment. (In re Petition of Village of Kildeer to Annex Certain Property (1987), 162 Ill.App.3d 262, 272, 113 Ill.Dec. 108, 514 N.E.2d 1020 aff'd (1988), 124 Ill.2d 533, 125 Ill.Dec. 333, 530 N.E.2d 491.) Petitioner's section 2-1401 petition alleges such facts. We therefore find that it is not an attempt to save an appeal whose time had past.

Petitioner initially contends that the trial court lacked subject matter jurisdiction to enter the agreed orders in the absence of any pleading seeking such awards. Petitioner contends that when awarding fees it must act within...