Fox v. Seiden

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Fox v. Seiden

State: Illinois

Court: 1st District Appellate

Docket No: 1-06-2323 Rel

Case Date: 04/21/2008

Preview:FIRST DIVISION April 21, 2008 No. 1-06-2323 HORACE FOX, JR., Trustee in Bankruptcy for Miriam Draiman, Plaintiff-Appellant, v. GLENN SEIDEN; SARA M. COLLINS; GLENN SEIDEN AND ASSOCIATES, P.C.; an Illinois Professional Corporation, and AZULAY, HORN AND SEIDEN, LLC, an Illinois Limited Liability Company, Defendants-Appellees. ) ) ) ) ) ) ) ) ) ) ) ) ) ) Appeal from the Circuit Court of Cook County.

No.

06 L 9362

The Honorable Kathy M. Flanagan, Judge Presiding.

JUSTICE GARCIA delivered the opinion of the court. The plaintiff, Horace Fox, Jr., as trustee in bankruptcy for Miriam Draiman, filed a one-count amended verified complaint against the defendants, Glenn Seiden, Sarah M. Collins, Glenn Seiden & Associates, P.C., and Azulay, Horn & Seiden, LLC,1 alleging legal malpractice. The plaintiff's legal malpractice

claim arises from a judgment ordering Miriam to pay more than $1 million in attorney fees. It is Miriam's position that she is

not liable for the attorney fees and, but for the law firm's
1

The defendants in this case are individual attorneys and a

law firm that has undergone numerous changes during the time period relevant to this appeal. For the sake of clarity, the law

firm and the individual attorneys will be referred to as "the law firm" collectively, or individually where necessary.

negligence, the judgment for fees would not have been entered against her. Upon the law firm's motion pursuant to section 2-

615 of the Code of Civil Procedure (the Code) (735 ILCS 5/2-615 (West 2004)), the trial court dismissed the verified amended complaint, finding it failed to properly allege actual damages and proximate cause. The plaintiff appeals. BACKGROUND Because this case arises upon a section 2-615 motion to dismiss, the facts are taken from the face of the plaintiff's amended complaint and the attached documents. 227 Ill. 2d 78, 81, 879 N.E.2d 278 (2007). The legal malpractice complaint at issue in this appeal stems from the law firm's representation of Miriam Draiman, her husband Yehuda Draiman, and several corporations held by Miriam, in the final stages of the case, Multiut Corp. v. Draiman, Nos. 01 CH 9989, 01 CH 20337, filed in the circuit court of Cook County in 2001 (the underlying litigation). I. The Underlying Litigation: Trial Proceedings Iseberg v. Gross, We reverse.

The underlying litigation involved a bitter family dispute. Yehuda's brother, Nachshon, was the president of Multiut Corporation (Multiut), which provides energy consulting and energy management services. employees. In its 10-count complaint, Multiut alleged Yehuda and 2 Yehuda and Miriam were both Multiut

Miriam, with the intent of confusing Multiut's customers, conspired to divert business from Multiut by forming various corporations, including M. Draiman Corporation, Multiut Electric, Incorporated, U.S. Gas & Energy Corporation, U.S. Gas, Electric & Telecommunications Corporation, and U.S. Utilities Corporation (the corporate defendants). Count V of the complaint alleged

Yehuda and the corporate defendants, but not Miriam, violated provisions of the Illinois Uniform Deceptive Trade Practices Act (the Act) (815 ILCS 510/1 et seq. (West 2000)). In addition to

injunctive relief and monetary damages, Multiut sought payment of attorney fees and costs in count V. Count VII, the only count in

which Miriam was individually named, alleged Yehuda, Miriam, and some of the corporate defendants committed civil conspiracy in diverting business from Multiut. Yehuda, Miriam, and the corporate defendants were initially represented in the underlying action by the law firm. The law

firm subsequently withdrew, and Yehuda, Miriam, and the corporate defendants were represented by Altheimer and Gray. Following a

bench trial that lasted several weeks, the trial court found in favor of Multiut in an order entered on January 17, 2003. Relevant to this appeal, the trial court assessed damages in the amount of $250,000 against Miriam. The court also assessed Regarding

damages against Yehuda and granted injunctive relief.

count V, the court stated, "[H]aving found that Yehuda Draiman 3

has purposely engaged in deceptive trade practices, it is this court's determination that attorneys' fees and costs in connection with the prosecution of this cause be awarded to the Plaintiff and against the Defendants." The court ordered counsel

for Multiut to submit an accounting of fees and costs within 30 days. Altheimer and Gray subsequently withdrew from the case. March 11, 2003, the law firm was retained again and filed a limited appearance "for [the] purpose of any post-trial motions prior to appeal." On August 26, 2003, the trial court entered an order drafted by Multiut's attorney stating, in relevant part, "Judgment is entered on behalf of plaintiff and against defendants in the amount of $1,002,046." The law firm, on September 19, 2003, On

filed a "Motion to Clarify the Judgment Order of January 17, 2003 and Order of August 26, 2003" ("motion to clarify"). On

September 22, while the motion to clarify was pending, the law firm filed a notice of appeal. The trial court, on September 30,

ruled it lacked jurisdiction to consider the motion to clarify "in light of the pending appeal." II. The Underlying Litigation: Appellate Proceedings

Yehuda and Miriam sought review of the trial court judgment in this court. Yehuda was initially represented on appeal by the

law firm, and Miriam and the corporate defendants were 4

represented by different counsel.

During the lengthy history of We allowed

the appeal, the law firm filed a motion to withdraw. the motion, and Yehuda proceeded on appeal pro se.

On January 30, 2004, one justice of this court entered an order finding that because Miriam was not named as a defendant in count V of the underlying complaint--the count that resulted in the $1,002,046 attorney fee award--she was not liable as to that portion of the judgment. Multiut filed a petition for leave to Miriam's counsel was

appeal that order in our supreme court.

also permitted to withdraw, and Miriam proceeded pro se. While leave to appeal the January 30, 2004, order was pending, this court, on July 22, 2005, filed an opinion affirming the judgment of the trial court. Multiut Corp. v. Draiman, 359 In our opinion, we

Ill. App. 3d 527, 834 N.E.2d 43 (2005).

concluded that the evidence at trial established the defendant corporations were the alter egos of Yehuda and Miriam. 359 Ill. App. 3d at 533, 538. Multiut,

In response to Yehuda's contention

that the $1,002,046 attorney fee award was unreasonable, we relied on the proposition that issues raised in a notice of appeal but not argued in the appellate court are waived for purposes of appeal. We held Yehuda forfeited his contention Multiut, 359 Ill.

because it was not made in his opening brief. App. 3d at 539.

Regarding Miriam's liability for the attorney

fee award, we stated: 5

"As to Miriam's liability for the fee award, she makes no argument other than remarking in the conclusion of her appellate brief that this court 'reversed the assessment of *** attorney fees.' Miriam

presumably refers to the *** order entered on January 30, 2004, and signed by one justice of this court ***.

Multiut argues that although Miriam apparently refers to the January 2004 order in contending that this court has reversed the fee award, that order has no effect on this appeal. Multiut asserts that an order

signed by one appellate court justice has no operative effect, and it has appealed that issue to the Illinois Supreme Court [citation]. Multiut contends that Yehuda and Miriam, in their joint answer to Multiut's petition in support of the fee award, did not argue that Miriam was not liable for the fees. Multiut points out that Miriam was represented by counsel at the hearing on the fee petition who did not contest her 6

liability, and that although Miriam later argued in a motion to clarify the fee award that her liability should be reduced because of her lower degree of culpability, she did not assert that she bore no liability for the fee award." 539-40. We held Miriam's challenge to the fee award was forfeited for purposes of review, as she failed to respond to Multiut's arguments and "offer[ed] no legal argument that would free her from the judgment against her and the other defendants." Multiut, 359 Ill. App. 3d at 540. We also noted that at the time Multiut, 359 Ill. App. 3d at

our opinion was entered, the supreme court had not yet ruled on Multiut's appeal of the January 30, 2004, order. Ill. App. 3d at 540.2
2

Multiut, 359

We take judicial notice of the following facts.

On

September 29, 2005, the supreme court denied Multiut's petition for leave to appeal. Multiut, 216 Ill. 2d 619 (2005). The

court, however, entered a supervisory order directing us to vacate the January 30, 2004, order and reconsider it with a full panel. order. On November 18, 2005, we vacated the January 30, 2004, Referencing our July 22, 2005, opinion, we held the

motion upon which the January 30, 2004, order was entered was moot. 7

III.

Bankruptcy Proceedings

On May 23, 2005, Miriam filed a chapter 13 (11 U.S.C.

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