Peresipka v. ELGIN, JOLIET & EASTERN RAILWAY COMPANY

• Decision Date: 14 March 1956
• Docket Number: No. 11533.,11533.
• Parties: Alex PERESIPKA, Plaintiff-Appellee, v. ELGIN, JOLIET AND EASTERN RAILWAY COMPANY, Defendant-Appellee. Michael A. Gerrard, Intervening Petitioner-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

59 ALR 2d 554, 231 F.2d 268 (1956)

Alex PERESIPKA, Plaintiff-Appellee, v. ELGIN, JOLIET AND EASTERN RAILWAY COMPANY, Defendant-Appellee.

Michael A. Gerrard, Intervening Petitioner-Appellant.

No. 11533.

United States Court of Appeals Seventh Circuit.

March 14, 1956.

Michael A. Gerrard, James E. Hastings, Chicago, Ill., for appellant.

Oscar C. Strom, Hoy D. Davis, Gary, Ind., Harlan L. Hackbert, Chicago, Ill., Glenn D. Peters, Hammond, Ind., for appellee.

Before DUFFY, Chief Judge, and MAJOR and LINDLEY, Circuit Judges.

MAJOR, Circuit Judge.

This proceeding involves a claim by intervening petitioner (referred to as Gerrard or intervenor) for attorney's fees and attorney's lien. Alex Peresipka (referred to as plaintiff) brought suit in the United States District Court for the Northern District of Indiana against the Elgin, Joliet and Eastern Railway Company (referred to as the railroad or defendant) to recover damages under the Federal Employers' Liability Act, 45 U.S. C.A. § 51 et seq. for injuries sustained while an employee of defendant. After a $25,000 judgment for plaintiff was affirmed by this court, 217 F.2d 182, defendant filed a petition February 21, 1955, reciting among other things that a settlement agreement had been reached but that there was a question as to the rights of certain attorneys in said judgment by reason of asserted liens, with the request that the amount agreed upon be paid to the clerk of the court, that the judgment be satisfied, that the attorneys be notified and that the petition be set for hearing for a determination of the claims for attorney's fees. The court, in compliance with the request contained in the petition, entered an order authorizing payment to the clerk in satisfaction of the judgment, with directions that defendant serve notice upon Gerrard of the matter before the court. Thereupon, Gerrard filed his intervening petition, reciting facts upon which he predicated his request that one-third of the judgment settlement on deposit with the clerk be ordered by the court paid to him under a contract of employment which he as an attorney had with plaintiff.

Subsequently, a hearing was had upon defendant's petition, together with the intervening petition filed by Gerrard, in which attorneys for these parties as well as those for plaintiff participated. The court rendered a memorandum opinion, decided the issue involved adversely to intervenor and, on June 1, 1955, entered the following order:

"The claim of Michael A. Gerrard for attorney\'s fees in his intervening petition to assert a lien therefore is denied."

From this order the appeal comes to this court.

Plaintiff had a cause of action against defendant by reason of injuries sustained by him June 12, 1948. Intervenor was and is a member of the Illinois Bar, practicing his profession in Chicago, Illinois. Plaintiff was recommended to him by one Frish, a representative of the union to which plaintiff belonged. On March 31, 1949, plaintiff by a written contract retained intervenor to prosecute his claim against the railroad. Among other things the contract stated:

"In consideration for services rendered and to be rendered I agree to pay a sum equal to 33 1/3% of whatever may be collected from said claim by suit, settlement or otherwise. No Charge Is to Be Made Unless Recovery Is Had."

On April 8, 1949, Gerrard duly served and filed with defendant a notice of attorney's lien pursuant to the Illinois Attorney's Lien Act of 1909, as amended, Ill.Rev.Stat.1941, ch. 13, sec. 14, S.H.A. ch. 13, § 14, Jones Ill.Stats.Ann. 9.13. Plaintiff went to Gerrard's office in Chicago several times (plaintiff admits four times) after the contract was signed. Gerrard took a statement from him regarding the nature of his injuries and the circumstances surrounding the same, employed an investigator who investigated the case and to whom Gerrard paid $130.00, was billed by a doctor for an x-ray examination of plaintiff and, on March 20, 1950, filed on behalf of plaintiff in the Superior Court of Cook County, Illinois.

After this suit was filed, one Orlow, an Indiana attorney, visited Gerrard's office and, at his request, was permitted to examine the file on plaintiff's case. Later Orlow prepared a letter directed to the Chicago Bar Association, in which it was stated in effect that Gerrard and defendant were engaged in a conspiracy to deprive plaintiff of his rights to recover damages against the defendant. This letter was signed and sworn to by plaintiff, but at the hearing he denied making such a charge and stated that he did not know what was in the letter. The letter was received by the Chicago Bar Association in April 1950, and in the following month Gerrard was notified by a committee of the Association that the complaint had been "dismissed as unwarranted."

In November 1951, Gerrard received notice that plaintiff would appear pro se and move to dismiss the Superior Court action filed by Gerrard, and the suit was dismissed a few days later. In the meantime, on March 11, 1951, Orlow, unknown to Gerrard, had filed suit for plaintiff in the United States District Court for the Northern District of Indiana, which resulted in the $25,000 judgment, the amount of which was paid into court as stated and against which intervenor claimed an attorney's lien. At the hearing, the court admitted certain documentary evidence and heard the testimony of intervenor and plaintiff.

The facts as above related are not in dispute. There is a dispute as to whether intervenor's contract of employment was signed in Indiana or Illinois. Intervenor testified that plaintiff came to his office in Chicago on March 31, 1949, where the contract was signed, that he never saw plaintiff before that time and that he had never been to Gary to see any person in a professional capacity. On the other hand, plaintiff testified that the union official Frish and Gerrard came to his hotel room in Gary, and that the contract was signed there. There was also a dispute relative to the x-rays made by Dr. Zeitlin in Chicago. Plaintiff stated that he was sent to the doctor by the claim agent of the railroad, while Gerrard testified that he sent plaintiff to the doctor. As noted, however, it is not disputed but that Gerrard received a report from the doctor, as well as a statement for his services.

While perhaps not material to any issue involved, it should be stated in fairness to plaintiff's present counsel, Hoy D. Davis and Oscar C. Strom, that they had no connection with the filing of the case in the Indiana court or with the circumstances by which Orlow became attorney for plaintiff. The suit was there filed by Orlow who subsequently was permitted to withdraw as plaintiff's counsel when Davis and Strom were employed, and it was they who tried the case, procured the judgment and represented plaintiff on appeal to this court. Orlow did not appear at the hearing in the instant matter.

Judge Luther M. Swygert in his memorandum opinion pointed out the undisputed fact that the $25,000 judgment was the result of the employment by plaintiff of attorneys Davis and Strom, and to some degree of Orlow, that Gerrard did not participate in the action in the Indiana court, that he rendered no services in connection therewith and that he did not practice his profession in the courts of that state. The opinion concluded by stating:

"Consequently, the lien asserted by Gerrard is not enforceable under the Indiana attorney\'s lien statute and as this is his sole remedy under his intervening petition, his claim for attorney\'s fees as a lien on the judgment rendered in this court must be denied."

Intervenor contends that he was entitled to have his claim for lien adjudicated in accordance with the Attorney's Lien Act of Illinois, while both plaintiff and defendant attempt to sustain the order under attack on the premise that intervenor's rights must be determined, as the court below did, in accordance with the Attorney's Lien Act of Indiana. The real issue, however, is whether the Illinois law is to be given effect, because intervenor claims nothing and concedes that he is without remedy under the Indiana Attorney's Lien Act. Sec. 4-3619, Burns' Indiana Statutes, 1946 Replacement, 1955 Cumulative Supplement. This is for the reason that the Indiana Act is applicable only to "Any attorney practicing his profession in any court of record in this state," and intervenor is not and never was so engaged. That Act also provides only for a means of obtaining a lien upon a judgment after it has been rendered and it is then available only to an attorney who rendered service in connection with its procurement.

The situation being as stated, we need give no further consideration to the Indiana Act or the construction placed upon it by the courts of that state. No question was raised in the court below but that intervenor acquired a valid lien under the Illinois Act. Plaintiff in this court suggests, however, in rather feeble fashion that intervenor as plaintiff's attorney was discharged and that he is without remedy except in an action against plaintiff to recover on quantum meruit, citing the decision of this court in Gardner v. Atchison, Topeka and Santa Fe Railway Company, 226 F.2d 109. That case does not support plaintiff's broad assertion. We concluded there that the attorney had lost his right to a lien because he voluntarily withdrew from the case and consented to the substitution of other counsel. In our discussion, at page 111, we cited numerous Illinois cases to the effect that the discharge of an attorney by the client "without good cause" does not defeat a lien for attorney fees.

We find no basis in the record for a holding that Gerrard was discharged for "good cause." The most that can be said, according to plaintiff's testimony, is that he became dissatisfied because of Gerrard's delay in filing suit. However, the suit was filed well within the period of limitation and, even though p...