Wright Dev. Grp., LLC v. Walsh
| Decision Date | 21 July 2014 |
| Docket Number | No. 1-13-0646,1-13-0646 |
| Citation | 2014 IL App (1st) 130646 -U |
| Parties | WRIGHT DEVELOPMENT GROUP, LLC, Plaintiff-Appellant and Cross-Appellee, v. JOHN WALSH, Defendant-Appellee and Cross-Appellant, (Pioneer Newspapers, Inc., d/b/a News Star, and Sun-Times Media Group, Inc., Defendants). |
| Court | United States Appellate Court of Illinois |
NOTICE: This order was filed under Supreme Court Rule 23 and may not be cited as precedent by any party except in the limited circumstances allowed under Rule 23(e)(1).
Appeal from the Circuit Court
of Cook County.
¶ 1 Held: The appeal was dismissed for lack of jurisdiction where the underlying litigation proceeded in violation of the automatic stay provision of the Bankruptcy Code (11 U.S.C.A. § 362 (West 2008)).
¶ 2 The plaintiff, Wright Development Group, LLC (Wright), filed a complaint for defamation against the defendant, John Walsh (Walsh), after he made statements to a newspaper reporter regarding the quality of the plaintiff's construction of the condominium building in which he owned a unit. Walsh moved to dismiss the complaint pursuant to the Citizen Participation Act (Act) (735 ILCS 110/1 et seq. (West 2008)). The trial court determined that Walsh's statement was not immune under the Act, but it ultimately dismissed Wright's complaint, with prejudice, pursuant to section 2-615 of the Code of Civil Procedure (Code) (735 ILCS 5/2-615 (West 2008), finding that Walsh's statements were not actionable under the innocent construction rule. Walsh appealed, contending he was entitled to dismissal under the Act and, therefore, entitled to attorney fees under section 25 of the Act (735 ILCS 110/25 (West 2008)). This court dismissed Walsh's appeal as moot. Wright Development Group, LLC v. Walsh, No. 1-08-2783 (unpublished order under Supreme Court Rule 23). However, the supreme court reversed our mootness finding and the trial court's judgment, holding that the Act applied to Walsh's statements and remanding the cause for a determination of the amount of his reasonable attorney fees and costs incurred in connection with the motion as provided by section 25 of the Act. Wright Development Group, LLC v. Walsh, 238 Ill. 2d 620, 640 (2010).
¶ 3 Upon remand, the trial court awarded Walsh attorney fees and costs in the amount of $339,010.28. Wright moved to vacate the court's judgment under section 2-1401 of the Code (735 ILCS 5/2-1401 (West 2012)), and Walsh filed a petition seeking additional attorney fees incurred in connection with Wright's postjudgment motion. The trial court denied both petitions,and both parties have now appealed. For the reasons that follow, we dismiss this appeal for lack of jurisdiction.
¶ 4 A detailed account of the facts surrounding the history of this case prior to the proceedings conducted on remand are contained in Wright Development, 238 Ill. 2d at 622-631, and we restate only those facts necessary to resolve the issues in this appeal.
¶ 5 On October 4, 2007, Wright filed defamation per se actions against Walsh, Pioneer Newspapers, Inc., and the Sun-Times Media Group, Inc., alleging that Walsh intentionally misrepresented to newspaper reporters that it was responsible for various construction defects in his condominium building. On April 15, 2008, Walsh independently moved to dismiss the complaint under the Act, and all the parties moved to dismiss the complaint under section 2-615 of the Code. Wright Development, 238 Ill. 2d at 626-27. On July 29, 2008, the trial court denied Walsh's motion under the Act, but later, on September 26, 2008, the court granted the defendants' section 2-615 motions and dismissed Wright's complaint, with prejudice.
¶ 6 Walsh appealed the trial court's judgment, arguing that he was entitled to dismissal under the Act, and therefore, entitled to attorney fees under section 25 of the Act. On September 29, 2009, this court dismissed Walsh's appeal, finding that it was moot because he was ultimately granted the relief he sought when the court dismissed Wright's complaint, with prejudice, on other grounds, pursuant to section 2-615 of the Code. Wright Development, No. 1-08-2783 (unpublished order under Supreme Court Rule 23). On October 21, 2010, our supreme court held that Walsh's appeal was not moot (Wright Development, 238 Ill. 2d at 634) and that his statements were protected under the Act (id. at 639). The supreme court further determined that Walsh was entitled to reasonable attorney fees and costs incurred with the motion under section25 of the Act and remanded the cause to the trial court for a determination of the amount of those fees and costs. Id. at 640.
¶ 7 On February 24, 2011, upon remand, Walsh filed his petition for attorney fees and costs, seeking $287,981.22 in attorney fees and costs which he allegedly incurred in connection with his motion under the Act.1 Walsh's affidavit was attached to his petition in which he stated that he was president of the 6030 Condominium Association (Association) at the time the alleged defamatory statements were made. He stated that he "tendered [his] defense in this lawsuit to the Association to pay the defense fees based on the indemnification provisions of Association's Declaration documents." Walsh further attested that "all legal bills were sent to the Association for payment" and that "[a]ny costs and fee recovered-as a result of the Illinois Supreme Court's mandate ***-will go directly to pay any outstanding, unpaid legal bill or to the Association for reimbursement of legal bills it paid on my behalf." Additional documents attached to Walsh's petition included the affidavits of the billing attorneys and redacted copies of the firms' invoices which were addressed to "Sixty Thirty Condominium Association." Walsh was represented by attorneys employed by the firms of Freeborn and Peters and Sanchez and Daniels.
¶ 8 In response, Wright issued subpoenas duces tecum to the Association and the firms representing Walsh, seeking documents and correspondence between the Association and the attorneys related to the payment of the legal fees and costs of the lawsuit. Wright argued that Walsh conceded that he did not incur any attorney fees or costs as the Association voluntarily paid for his defense costs and that many of the fees and costs were associated with work notdirectly connected to the motion filed under the Act. Walsh moved to quash these subpoenas, stating "[w]has has been paid for, and who has paid [his] attorneys' fees is not at issue," but rather, the court was to determine the "amount of attorneys' fees owed to him by [Wright]." While it did not specifically grant or deny the motion to quash, the courts ordered Walsh to submit evidence of all paid and outstanding legal bills.
¶ 9 In his reply in support of his fees, Walsh submitted a letter from his counsel at Freeborn and Peters to Wright's counsel stating that all of Walsh's bills were sent to and paid by the Association, and he included a ledger, as ordered by the court, showing that $183,034.47 in attorney fees had been billed and paid for between November 12, 2007, and February 14, 2011. The ledger was later updated to reflect $218,301.72 in attorney fees remained outstanding for legal services performed between October 14, 2008, and June 10, 2011.
¶ 10 On June 16, 2011, following a hearing on the limited issue of whether fees incurred during Walsh's appeal were recoverable under the Act, the trial court found that such fees were recoverable and ordered an evidentiary hearing to be conducted to determine the amount of fees and costs to which Walsh was entitled.
¶ 11 During the evidentiary hearing, Walsh testified that he tendered his defense to the Association because Wright's suit was based on statements he made at a governmental meeting sponsored by the local alderman, which he attended in his capacity as president of the Association. He admitted that he was individually named in the suit and that he never signed an engagement agreement with either firm representing him. Walsh testified that, after he tendered his defense to the Association, the Association retained Michael Franz, an attorney employed by the law firm of Freeborn and Peters and later employed by the law firm of Sanchez and Daniels. Walsh explained that Franz regularly represented the Association and that, during the course ofthe litigation, Franz left Freeborn and Peters for a position with Sanchez and Daniels. Walsh testified that both firms continued working on the case.
¶ 12 Franz and Terrence Sheahan, an attorney employed by Freeborn and Peters, testified to the accuracy of the invoices submitted with Walsh's fee petition, confirming that the charges were incurred by him in connection with the motion to dismiss filed under the Act and the appeal. By the time of the hearing, Sheahan testified that the total amount of fees and costs connected to Walsh's motion under Act amounted to $339,010.28, which included the fees and costs related to the appeals and the fee petition proceedings through September 8, 2011. Sheahan explained that, after Franz left Freeborn and Peters, he began working on the case and agreed to consult with Franz as needed, which he did so on occasion. Sheahan further testified regarding the reasonableness and purpose of each service billed in the matter, and Wright objected to the fees by thoroughly cross-examining him and submitting evidence of items allegedly double- or over-billed by Sheahan and Franz.
¶ 13 Included in evidence admitted during the hearing, section 8(B) of the 6030 Condominium declarations of ownership agreement states, in relevant part, that "each of the members of the Board and each of the officers" shall be indemnified and held harmless by the owners or Association for:
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