Mireles v. Indiana Harbor Belt R.R. Corp.

• Decision Date: 30 March 1987
• Docket Number: No. 86-1458,86-1458
• Citation: 154 Ill.App.3d 547,107 Ill.Dec. 465,507 N.E.2d 129
• Parties: , 107 Ill.Dec. 465 Jose MIRELES, Plaintiff-Appellee, v. INDIANA HARBOR BELT RAILROAD CORPORATION, an Indiana corporation, and Consolidated Rail Corporation, a Pennsylvania corporation, Defendants, and Marshall I. Teichner, Respondent-Appellant.
• Court: United States Appellate Court of Illinois

Page 129

507 N.E.2d 129

154 Ill.App.3d 547, 107 Ill.Dec. 465

Jose MIRELES, Plaintiff-Appellee, v. INDIANA HARBOR BELT RAILROAD CORPORATION, an Indiana corporation, and Consolidated Rail Corporation, a Pennsylvania corporation, Defendants and Marshall I. Teichner, Respondent-Appellant.

No. 86-1458.

Appellate Court of Illinois First District, First Division.

March 30, 1987.

Johnson & Schwartz, Donald L. Johnson, Chicago, for respondent-appellant.

Karlin & Fleisher, Ronald G. Fleisher, Chicago, for plaintiff-appellee (David A. Novoselsky & Associates, David A. Novoselsky, Chicago, of counsel).

Presiding Justice QUINLAN delivered the opinion of the court:

Plaintiff, Jose Mireles, filed a motion to adjudicate the lien of his former attorney, Marshall Teichner, in connection with a $100,000 settlement of his personal injury lawsuit. At the hearing to adjudicate the lien, the trial court found that Teichner did not have an enforceable contingent fee contract with the plaintiff, and further found that the reasonable value of Teichner's services was $750 and awarded fees in that amount. Teichner now appeals the trial court's order contending that the award of $750 in fees was inadequate and against the manifest weight of the evidence. Teichner also argues that the trial court abused its discretion by denying Teichner's request to continue the hearing to adjudicate his lien since his attorney was on trial in another matter, and would, therefore, be entitled to a continuance as a matter of right.

In January 1979, the plaintiff retained the law firm of Marshall Teichner, Ltd. to represent him in a personal injury lawsuit against his employer, Indiana Harbor Belt Railroad Corporation. The plaintiff had been injured on the job as a track worker for the defendant, Indiana Harbor Belt Railroad Corporation, and filed a personal injury lawsuit against the employer under the Federal Employer's Liability Act. At their first meeting, attorney Teichner and the plaintiff entered into a contingent fee agreement.

In February 1980, Teichner was suspended from the practice of law in a matter unrelated to the instant case. At the time of his suspension, Teichner entered into an arrangement with attorney Gary Blank who agreed to serve as substitute counsel in some of the cases being handled by Teichner, including plaintiff Mireles' lawsuit. Thereafter, the plaintiff signed another agreement consenting to this substitution of attorneys.

In February 1982, Teichner returned to the practice of law, and resumed work on the plaintiff's lawsuit, allegedly at Mr. Mireles' request. In May 1983, Teichner again entered into another contingent fee agreement with the plaintiff. This agreement provided for payment of a one-third fee prior to the time the lawsuit was filed and then a fee of 40% after the lawsuit was filed. At the hearing to adjudicate the lien, Teichner waived claim to the 40% fee and sought only to recover a one-third fee but claimed that this one-third fee was applicable to his alleged services before and after filing suit. Also, at the hearing, Teichner called a Chicago personal injury attorney as an expert witness, who testified that a one-third contingent fee was customary in the legal community for personal injury cases.

In January 1985 plaintiff discharged Teichner as his attorney. Immediately prior to taking this action, the plaintiff on December 22, 1984, entered into an agreement with another law firm, Karlin & Fleisher, which provided for a 25% contingent fee in this matter. The Chicago attorney who Teichner had called as an expert witness at the hearing on his lien had also testified on cross-examination that a 25% contingent fee was a customary fee for attorneys representing "union" plaintiffs in personal injury cases.

At the hearing in the trial court, Teichner claimed that on December 20, 1984, he had received an offer to settle the plaintiff's case for $100,000, but that the offer included a condition that the plaintiff give up any rights he had to continued employment with defendant railroad. He testified that on his recommendation, plaintiff rejected the offer. The record reveals that in June 1985, with the assistance of Karlin & Fleisher, the defendant railroad removed the job condition and plaintiff settled his lawsuit for $100,000.

At the hearing to adjudicate the lien, Teichner also testified concerning the amount of alleged time he had spent working on the plaintiff's case. Teichner stated that from his initial contact with the plaintiff in January 1979 until Mr. Blank assumed responsibility for the case in February 1980, he had devoted approximately 48.5 hours to the plaintiff's case. However, the trial court ruled that Teichner's work had merged with that of Mr. Blank and, thus, refused to award compensation for this time. The trial court also refused to consider evidence concerning any fees claimed by Teichner prior to his May 1983 agreement with the plaintiff, including any claim by Teichner for compensation during the period of time that Mr. Blank had the case.

From May 1983 until his termination as plaintiff's attorney in January 1985, Teichner estimated that he had spent approximately 120 hours on the plaintiff's case. He claimed that the time was spent in meetings with the defendant railroad to discuss various settlement proposals; that six to eight meetings of two to three hours each in duration were conducted with the plaintiff at Teichner's office and home; that he had continually worked at updating the file; and that there were also frequent telephone conferences with the plaintiff.

The trial court specifically found the testimony of Teichner regarding this claimed amount of time he had spent on the case not to be credible. Ultimately, the court allowed fees for 15 hours of work at the rate of $50 per hour. While the trial court did make an award for this amount, it did so only after it had observed that the court itself had serious doubts about whether Teichner was entitled to any fees at all. The court further found that Karlin & Fleisher had added $25,000 to the value of the case, and that the plaintiff was subject to the 25% fee agreement with the firm of Karlin & Fleisher. At the time of its ruling, the trial court did not make any specific finding concerning the amount of the fee that Karlin & Fleisher should be allowed, but retained jurisdiction over the balance of the funds contained in a $35,000 fee escrow which would be left after paying the amount of the award to Teichner.

In his appeal Mr. Teichner argues that the trial court's award of $750 in fees was inadequate and against the manifest weight of the evidence. Teichner agrees that the trial court was correct in its ruling that an attorney, following discharge or disbarrment, has a right to recover reasonable fees for services rendered up to the time of his disbarrment or discharge (see Rhoades v. Norfolk & Western Ry. Co. (1979), 78 Ill.2d 217, 36 Ill.Dec. 680, 399 N.E.2d 969; Harris Trust & Savings Bank v. Chicago College of Osteopathic Medicine (1983), 116 Ill.App.3d 906, 72 Ill.Dec. 448, 452 N.E.2d 701). However, Teichner argues the trial court erred when it refused to find that the reasonable value of his services was equal to his claimed customary fee in personal injury cases of one-third of the amount recovered. Specifically, Teichner contends that the reasonable value of a discharged or disbarred attorney's professional services, absent evidence of a customary or hourly wage rate in a personal injury action, should be based solely on this customary one-third contingent fee. Here, in fact, he asserts it has to be equal to that amount, since all of the necessary work for the settlement had been done by the time he was discharged. Furthermore, Teichner contends that because he failed to keep detailed time records regarding the hours spent on the Mireles case, this percentage fee was the most reliable basis upon which to determine a reasonable fee, in any event.

We find no merit to this argument. Following a review of the record in this case, we agree with the trial court that the value of Teichner's legal services, if any, was far less than his claim of one-third of the amount for which the plaintiff settled his case.

In determining the reasonable value of an attorney's fee, a number of factors are to be considered by a trial court which include the skill and standing of the attorney employed; the nature of the case and the difficulty of the questions at issue; the amount and importance of the subject matter; the degree of responsibility involved in the management of the case; the time and labor required; the usual and customary fee in the community; and the benefit resulting to the client. Harris Trust & Savings Bank v. Chicago College of Osteopathic Medicine (1983), 116 Ill.App.3d 906,...