Woods v. Southwest Airlines Co.
| Decision Date | 18 October 2007 |
| Docket Number | No. 06 C 2203.,06 C 2203. |
| Citation | 523 F.Supp.2d 812 |
| Parties | WOODS, et al., Plaintiffs, v. SOUTHWEST AIRLINES, CO., et al., Defendants. Ronald A. Stearney, Sr., and Ronald A. Stearney, Jr., Petitioners, v. Clifford Law Offices, P.C., et al., Respondents. |
| Court | U.S. District Court — Northern District of Illinois |
Robert A. Clifford, Kevin P. Durkin, Clifford Law Offices, P.C., Colin H. Dunn, Cook County State's Attorney's Office, Chicago, IL, Donald Edward Schlyer, Schlyer & Associates, P.C., Merrillville, IN, for Plaintiffs.
Alan J. Brinkmeier, Donald G. Machalinski, Linda J. Schneider, Michael J. Merlo, Merlo Kanofsky Brinkmeier & Gregg Ltd., William Thomas Cahill, Bates McIntyre Larson, Perkins Cole LLC, Chicago, IL, for Defendants.
Robert Andrew Chapman, Robert A. Chapman, Attorney at Law, James P. Chapman, James P. Chapman & Assoc, Michael G. Fatall, Peter Michael Spingola, Chapman & Spingola, LLP, Chicago, IL, for Petitioners.
James R. Figliulo, Catherine Mary Towne, Figliulo & Silverman, PC, Gordon B. Nash, Jr., Drinker Biddle Gardner Carton, Lionel W. Weaver, Drinker Biddle & Reath LLP, Chicago, IL, for Respondents.
This matter comes before the court on three motions. The first is a motion by Respondents Clifford Law Offices ("the Clifford firm"), Schlyer & Associates ("the Schlyer firm"), and Donald Schlyer for partial summary judgment of Count I of the petition of Ronald A. Stearney Sr. and Ronald A. Stearney Jr. (collectively referred to as "the Stearneys") to adjudicate an attorneys' lien. The second is a cross motion for partial summary judgment filed by the Stearneys on the same count. The third is a motion by the Clifford firm to dismiss Count II of the Stearneys' petition. For the reasons set forth below, the Clifford firm's motion for partial summary judgment is granted in part and denied in part; the Stearneys' cross motion is denied. The motion to dismiss Count II is granted.
The dispute between the Stearneys and the Respondents arises out of the underlying lawsuit filed by the family of Joshua Woods ("the Woods family") against Southwest Airlines Company and the Boeing Company. On December 8, 2005, an airplane manufactured by Boeing and operated by Southwest crashed through a barrier at Chicago's Midway Airport and into traffic on the street beyond.1 Joshua was riding in a car on that street with his mother Lisa, his father Leroy, and his two brothers. The latter four were each injured; Joshua was killed.
Four days after the crash, the Woods family retained the Stearneys to represent them in any legal matters that arose out of the accident. Specifically, the family retained the firm of Ronald A. Stearney and Associates ("the Stearney firm") to "prosecute and/or settle all suits and claims for damages against Southwest Airlines, FAA, City of Chicago on account of personal injuries and/or property damages" the Woods family experienced arising out of the December 8 accident. The agreement provided that all attorneys' fees would be paid from funds recovered in connection with the claims arising from the accident. The agreement contemplated a contingent fee arrangement, whereby the Stearney firm would be paid one third of the amount recovered if the claim was resolved by settlement prior to suit being filed. If the claim was resolved after suit was filed, the fee would be assessed as 40% of the eventual recovery. If the suit was resolved in favor of the defendants and resulted in an appeal, the Stearney firm was to be paid 50% of any eventual recovery. The Woodses agreed that the Stearney firm would have a lien on all claims for the amount of any fee owed. The agreement also provided that if there was no recovery from the suit, the Stearney firm would be paid nothing, unless the Woodses discharged the Stearney firm before the suit was resolved. In the event of discharge, the Woodses would pay $190 per hour for the time the Stearney firm actually worked on the case, regardless of whether the family obtained any recovery on their claims.
The day after the Woodses retained the Stearney firm, Stearney Jr. mailed a notice of attorney's lien to Southwest and the City of Chicago. The lien notice stated that the Woods family had agreed to pay the Stearney firm one third of any amount recovered via settlement and 40% of any amount recovered by suit.
About 10 days later, the Stearneys met with members of the Clifford firm to discuss the prospect of the Clifford firm participating in the representation of the Woods family. The discussions culminated in an agreement signed January 6, 2006 ("January 2006 agreement"), which contained the following terms:
We, Lisa Woods and Leroy Woods ... employ and appoint Ronald A. Stearney and Ronald A. Stearney, Jr. and Clifford Law Offices, P.C., as our attorneys to represent us in the settlement, adjustment, or prosecution of a cause of action, against persons or entities responsible arising out of an occurrence on or about the 8th day of December 2005 in Cook County, Illinois, and agree to pay Ronald A. Stearney and Ronald A. Stearney, Jr. and Clifford Law Offices, P.C., as compensation for their services and assign to them, one-third (1/3) of any sum obtained or recovered therefrom by suit, settlement or otherwise.
We hereby authorize Ronald A. Stearney and Ronald A. Stearney, Jr. and Clifford Law Offices, P.C., at their discretion, to associate with other counsel to continue the representation of our case and, where appropriate, retaining that specialized counsel as an expense to the litigation for purpose of appeal or otherwise.
If, pursuant to any settlement agreement or order of court, any sums of money are to be paid in future periodic installments, through the purchase of an annuity policy or otherwise, the present cash value (purchase price) of said annuity, as well as any lump sum payments made at the time of settlement, will be the basis for determining the professional fee. Said fees will be payable at the time of settlement or dismissal of the case.
. . .
I[sic] fully understand, agree and consent to the fact that Ronald A. Stearney and Ronald A. Stearney, Jr. and Clifford Law Offices, P.C., will divide the above-described attorney's fees in the following amounts:
Fifty percent (50%) to Ronald A. Stearney and Ronald A. Stearney, Jr., jointly;
Fifty percent (50%) to Clifford Law Offices, P.C.
We hereby grant Ronald A. Stearney and Ronald A. Stearney, Jr., and Clifford Law Offices, P.C. and their related counsel a lien on these causes of actions [sic] and a lien on any proceeds and any judgments recovered in connection with these causes of actions [sic] as security for the payment of attorneys' fees and expenses as contracted for herein.
The agreement was signed by both Lisa and Leroy Woods. It went on to state that Ronald Stearney Sr., Ronald Stearney Jr., and the Clifford firm "agree to assume professional responsibility in the above cause, entrusted to us and to charge no fee unless recovery is had...."
Approximately one month later, on February 9, the Woods family terminated the Stearneys' representation of them, via letter from the Schlyer firm, their new counsel. The communication included a letter signed by Lisa and Leroy that contained the following language:
Please let this letter serve as notice that we have terminated you and your firms [sic] services for all matters connected with the airplane incident on December 8, 2005 ... This letter also serves as notice that we have terminated the services of all other attorneys you have retained or associated with on our behalf for this incident.
The following day, the Schlyer firm and the Woods family met with the Clifford firm to discuss a new representation agreement involving the Clifford firm. One month later, the relationship was memorialized in a new document ("the March 2006 agreement") that was identical to the January 2006 agreement save for the substitution of the name of the Schlyer firm for the Stearneys' names.
On April 7, 2006, the Schleyer firm and the Clifford firm filed a 31-count, 86-page complaint in Illinois state court on behalf of the Woods family. The matter was timely removed to this court. The Stearneys do not appear as attorneys of record for any members of the Woods family in either the state court complaint or the federal docket. Approximately one year later, the Woods family settled all claims they had against Southwest and Boeing in a confidential agreement.
On March 1, 2007, the Stearneys filed a verified petition for adjudication of an attorneys' lien in this court. In it, they asserted a claim to 50% of one third of the amount the .Woodses received from the settlement, pursuant to the terms of the January 2006 agreement. The Stearneys later amended their petition to add a count of breach of fiduciary duty against the Clifford firm.
The Clifford firm, the Schleyer firm, and Schleyer now move for partial summary judgment on the questions of whether the Stearneys can enforce the January 2006 agreement or if they are limited to pursuing a quantum meruit remedy for the services they provided prior to February 9, 2006. The Stearneys have cross-moved on the same issues. The Clifford firm also moves to dismiss the claim of breach of fiduciary duty pursuant to Fed.R.Civ.P. 12(b)(6) on the ground that it fails to state a claim upon which relief can be granted.
Summary judgment is appropriate only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R. Civ. Proc. 56(c). A genuine issue of material fact exists when the evidence is such that a reasonable jury...
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