Seiden Law Grp., P.C. v. Segal
| Decision Date | 10 November 2021 |
| Docket Number | 1-20-0877 |
| Citation | 2021 IL App (1st) 200877,202 N.E.3d 343,460 Ill.Dec. 801 |
| Parties | SEIDEN LAW GROUP, P.C., as Successor-in-Interest to Seiden Netzky Law Group, LLC, Plaintiff-Appellant, v. Joy SEGAL, Defendant-Appellee. |
| Court | United States Appellate Court of Illinois |
Brooke L. Stevens and Mark A. Cisek, of Seiden Law Group, P.C., of Chicago, for appellant.
Richard J. Prendergast, Deirdre A. Close, Brian C. Prendergast, and David C. Rivelli, of Richard J. Prendergast, Ltd., of Chicago, for appellee.
¶ 1 Seiden Law Group, P.C., as successor-in-interest to Seiden Netzky Law Group, LLC (Seiden Law), represented Joy Segal (Segal) in federal court pursuant to a contingency-fee agreement. There was a blank in the agreement where the percentage recovery was supposed to written in, but no one from Seiden Law filled in the blank with a percentage. During the midst of Seiden Law's representation, Segal discharged the law firm, who later demanded payment based the value of services it provided to her. Segal did not pay, so Seiden Law sued her for quantum meruit and unjust enrichment in the circuit court. On Segal's motion to dismiss, the circuit court dismissed Seiden Law's amended complaint with prejudice pursuant to section 2-619 of the Code of Civil Procedure (Code) ( 735 ILCS 5/2-619 (West 2020) ), finding that, despite the omitted percentage recovery, the written agreement was enforceable and the agreement dictated that Seiden Law was to receive no compensation upon being discharged, thus precluding the law firm's claims for quantum meruit and unjust enrichment. On appeal, Seiden Law contends that the circuit court erred in dismissing its amended complaint where, regardless of the enforceability of the engagement agreement, it was entitled to pursue compensation under its claims for quantum meruit and unjust enrichment. For the reasons that follow, we reverse the circuit court's dismissal and remand the matter for further proceedings.
¶ 3 In 2004, a federal jury convicted Segal's then-husband, Michael Segal, of racketeering for conduct involving his insurance brokerage company. As part of his sentence, a federal district court ordered him to forfeit millions of dollars in personal assets. Around this time, Segal and her husband divorced, and pursuant to their marital dissolution agreement, Segal was awarded her share of the marital estate. Although the United States government never charged Segal with any wrongdoing, it seized and restrained significant amounts of assets that she alleged belonged to her as part of the divorce decree. As such, she filed a claim to obtain those assets, and in 2010, she settled her claim with the United States government, which allowed her to obtain some of the confiscated assets. The settlement also gave Segal the contingent right to assert an interest in the remaining seized assets if they were ultimately released by the government, not ordered forfeited, and not claimed by the government at the completion of all forfeiture proceedings. Ultimately, her ex-husband was able to satisfy the forfeiture judgment against him in full through his own assets.
¶ 4 As a result, in April 2013, Segal retained Seiden Law to represent her in connection with her efforts to obtain the property still in the possession of the United States government in which she claimed a right. In the engagement agreement signed by Seiden Law and Segal, paragraph 4 was titled "Fee for Services Performed" and stated: "___ % of recovered funds, if recovered, now in the control of the United States through the United States Attorney, pursuant to a forfeiture resulting from a matter concerning Michael Segal." The engagement agreement did not include an actual percentage in this paragraph. Paragraph 5 was titled "Expense Reimbursement" and required Segal to reimburse Seiden Law for the costs and expenses incurred in connection with her representation. Paragraph 6 provided that the parties’ attorney-client relationship may be terminated by either party "at any time." The paragraph further stated that "[t]ermination will not affect [Segal's] obligation to pay for accrued fees, as provided in Paragraph 4, to reimburse the expenses as provided in Paragraph 5, or to indemnify [Seiden Law]." The engagement agreement contained an attached document titled "Information for Clients." This document stated, in part, that "[t]he following information explains the client service practices and billing procedures that apply to your account (unless you have reached a different written understanding with us)." One topic of this document included information on the "[b]asis for fees," which noted that "[l]egal services rendered by [Seiden Law] are generally charged at hourly rates."
¶ 5 After retaining Seiden Law, the law firm filed multiple motions in federal district court on Segal's behalf, including a June 2013 motion requesting the court to refund and release property seized by the United States government to satisfy the claims against her ex-husband and an October 2013 motion for an accounting of assets.1 Seiden Law also filed a document containing its final written argument on Segal's two pending motions. However, in November 2013, the federal district court denied the two motions. Additionally, in August 2014, Seiden Law filed a motion on Segal's behalf for another accounting of assets, an evidentiary hearing, and a distribution of assets. Later in the month, the federal district court denied the motion without prejudice, allowing the motion to potentially be renewed once the pending appeals of Segal's ex-husband were resolved.
¶ 6 In early 2016, Segal discharged Seiden Law, and in February 2016, Seiden Law moved the federal district court, and was granted leave, to withdraw as Segal's counsel. In May 2019, Glenn Seiden of Seiden Law sent Segal a letter, demanding payment of $98,655.50 in attorney fees based on the value of services the firm provided to her while representing her in the federal court case.
¶ 7 Two months later, after not receiving any payment from Segal, Seiden Law sued her in the circuit court. In March 2020, Seiden Law filed its operative first amended complaint. According to Seiden Law, its representation of Segal in federal court necessitated several time-consuming and in-depth legal tasks, including the filing of multiple motions. Seiden Law acknowledged that, when Segal discharged the law firm, she had not prevailed in her quest to obtain her claimed assets. However, the firm alleged that, upon information and belief, it was still possible for her to prevail on the claims for which Seiden Law represented her in the underlying litigation.
¶ 8 In count I of its amended complaint, Seiden Law brought a cause of action for quantum meruit. In this count, it asserted that no enforceable contract for services existed between the parties because the engagement agreement failed to include the percentage of Segal's recovery to be paid to the law firm as its attorney fees, which was an essential and certain term needed to create an enforceable contract. As such, Seiden Law claimed it was entitled to the reasonable value of services that it provided to Segal. In count II, Seiden Law brought a claim for unjust enrichment. In this count, it asserted that the law firm did not represent Segal gratuitously, to which she understood and agreed. Seiden Law stated that Segal retained the benefit of valuable legal services to its detriment, and the retention of that benefit was unjust. Seiden Law alleged that it provided Segal $98,655.50 in unpaid legal services, and in both counts, it sought that amount as damages plus costs and interest. Seiden Law attached to its amended complaint the engagement agreement signed by both parties and the demand letter the law firm sent Segal.
¶ 9 In response to Seiden Law's amended complaint, Segal filed a motion to dismiss pursuant to section 2-619.1 of the Code (id. § 2-619.1), wherein she asserted that the parties agreed to a contingency-fee contract that did not require her to pay Seiden Law any fees for its services unless there was a recovery. Segal highlighted that Seiden Law had not prevailed in any of the motions it filed in federal court yet was still demanding to be paid based on prevailing hourly rates, a term that was not included anywhere in the engagement agreement. Under section 2-615 of the Code (id. § 2-615), Segal argued that Seiden Law's amended complaint should be dismissed because there could be no claim for quantum meruit or unjust enrichment where Seiden Law's amended complaint pled the existence of a contract. Under section 2-619 of the Code (id. § 2-619 ), Segal argued that Seiden Law's amended complaint should be dismissed because the engagement agreement, which was attached to the amended complaint, did not provide for any right to attorney fees unless the law firm succeeded in pursuing Segal's claims, which it had not done. Segal attached to her motion multiple notifications of docket entries from the federal district court proceedings, which showed that Seiden Law had been unsuccessful in the motions it filed on her behalf.
¶ 10 Seiden Law responded to Segal's motion, arguing that, because there was no enforceable agreement between the parties and no dispute legal services were rendered to her, the law firm was entitled to recover the value of the services it provided to her under the principles of quantum meruit and unjust enrichment. Furthermore, Seiden Law posited that, even if there was an enforceable contingency-fee agreement between the parties, as Segal had argued, her act of discharging the law firm resulted in the agreement ceasing to exist. And, in turn, Seiden Law asserted that it was entitled to recover the value of the services it provided to her under the principles of quantum meruit and unjust enrichment. According to Seiden Law, regardless of if there was an...
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