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Kehoe v. Saltarelli
State: Illinois
Court: 1st District Appellate
Docket No: 1-01-3108 Rel
Case Date: 03/07/2003

FIFTH DIVISION
MARCH 7, 2003



No. 1-01-3108
 
ROBERT E. KEHOE, JR.,

            Plaintiff-Appellant,

v.

GEALD G. SALTARELLI and BUTLER,
RUBIN, SALTARELLI AND BOYD,

            Defendants-Appellees.

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APPEAL FROM THE
CIRCUIT COURT OF
COOK COUNTY.




HONORABLE
MICHAEL J. HOGAN,
JUDGE PRESIDING.

PRESIDING JUSTICE CAMPBELL delivered the opinion of the court:

This appeal arises out of an attorney malpractice action filed by plaintiff, Robert Kehoe,Jr., against defendants, attorney Gerald Saltarelli and the law firm Butler, Rubin, Saltarelli andBoyd (collectively, defendants or Saltarelli or Butler), based on defendants' decision to decline torepresent plaintiff in a legal malpractice claim filed against plaintiff and his former law firm,Wildman, Harrold, Allen & Dixon (Wildman or the Wildman firm ). Plaintiff appeals from anorder of the circuit court of Cook County dismissing his second amended complaint (revised),which contained four counts against defendants, including: (1) breach of fiduciary duties(count I); (2) tortious interference with contract (count II); (3) participation in Wildman's breachof fiduciary duties (count III); and (4) a common law claim for attorney fees as a result of breachof contract (count IV). We affirm.

BACKGROUND

Plaintiff, Robert Kehoe, Jr., was a partner in the Wildman firm from 1979 through 1996. In 1997, plaintiff filed suit against Wildman for refusal to distribute his full financial interest inthe partnership (Wildman litigation). The Wildman litigation remains pending and plaintiff andWildman have characterized each other as "adversaries." On March 5, 1998, two former clientsof Wildman, Matthew Songer and Robert Songer, sued plaintiff and the Wildman firm inconnection with legal services performed by plaintiff and Wildman between 1992 and 1996(Songer v. Kehoe, No. 98 CH 2895). Wildman initially retained defendants, Saltarelli and theButler firm, to provide its legal defense of the Songer lawsuit. After retaining defendants,Wildman instructed Saltarelli to contact plaintiff to discuss the prospect of joint representation ofboth Wildman and plaintiff individually.

Plaintiff initially withheld his consent to joint representation. Subsequently, plaintiffagreed to defendants' representation subject to its recognition of certain conflicts of interest. Defendants did not agree to plaintiff's request and declined to represent plaintiff, informing himthat he should seek other counsel. Ultimately, defendant represented himself pro se and obtaineda dismissal of all of the claims against him. The Songer lawsuit was dismissed on June 15, 2001.

Plaintiff filed a one-count complaint against defendants for attorney malpractice whichwas dismissed on September 21, 2000. Plaintiff filed his second amended complaint (revised)(hereafter complaint) on July 17, 2001, alleging four counts as follows: legal malpractice/breachof fiduciary duty; tortious interference; participation in Wildman's breach of fiduciary duty; andattorney fees for breach of contract.

In his complaint, plaintiff alleged that in defending the Songer lawsuit, Wildman had theresponsibility to procure conventional liability insurance. However, by agreement of thepartners, Wildman adopted a plan of self-insurance as follows: In the event of a claim arising outof the firm's activities, Wildman would arrange for defense counsel and pay the expense of thedefense using accumulated assets that had not been distributed to the partners. Plaintiff allegedthat this defense plan was in place prior to the Songer lawsuit and was routinely applied over theyears as a matter of custom and practice.

Plaintiff alleged that at the time Wildman retained defendants for the Songer lawsuitWildman "intended to exploit the defense of the Songer lawsuit to offset the plaintiff's pendingpartnership claims against the Wildman firm." Plaintiff described Wildman's "strategy" asfollows: 

"(A) Insisting that one attorney representboth the plaintiff and the Wildman firm so that thedefense counsel representing the plaintiff would besubject to direction and control by the Wildmanfirm as a direct client.

(B) Managing the defense so as to give priority to defeatingthe firm's direct exposure for its own acts of independentculpability, relative to its exposure for its own acts of independentculpability, relative to its exposure for vicarious liability that couldbe attributed to the plaintiff.

(C) Eventually asserting a claim for reimbursement fromthe plaintiff, the amount of which would be maximized bydepicting whatever might be paid in settlement as beingattributable entirely to claims for which the Wildman firm wasonly vicariously liable."

In count I, plaintiff alleged that between May 1, 1998, and May 27, 1998, defendantswere his attorneys and in that capacity owed plaintiff fiduciary duties, including the duty toinvestigate and disclose conflicts of interests that arose from simultaneously representing theWildman firm. Plaintiff alleged that on May 1, 1998, defendants agreed to represent both himand Wildman in the Songer litigation. During the week of May 4, 1998, plaintiff met withdefendants as attorney/client to discuss confidential matters relating to his defense. Plaintiffdirected defendants' attention to whether conflicts of interest prevented one attorney fromrepresenting both parties. Saltarelli denied the existence of any such conflict. In a letter ofMonday, May 11, 1998, plaintiff proposed that the parties meet promptly to resolve the issue ofrepresentation. In a letter dated May 15, 1998, Wildman insisted that plaintiff be represented bydefendants, stating that "[i]f you choose to be separately represented under these circumstances,the firm will not be obligated to pay for your defense or indemnify you against any adversesettlement or verdict."

In a letter dated Monday, May 18, 1998, plaintiff expressly consented to defendantsserving as his legal counsel. In response, Saltarelli left a voicemail message for plaintiff statinghe would call plaintiff back to discuss his letter and also stating that he would be getting anextension on the filing of an answer. Plaintiff alleges that by virtue of this message, defendantsled him to reasonably believe that they would act as his counsel.

Following May 18, 1998, plaintiff alleged that defendants continued to affirmatively actas his attorney, evidenced by their letter to counsel for the Songers and by another voicemailmessage Saltarelli left for plaintiff. When defendants were unable to "work out an arrangement"in their discussions with the Wildman firm, defendants requested that plaintiff waive theirprofessional duties to him. At a meeting on May 26, 1998, defendants demanded that plaintiffwaive such duties, and plaintiff refused to do so. By letter dated May 27, 1998, defendantsinstructed plaintiff to secure other counsel.

Plaintiff alleged that defendants breached the following duties: (1) duty to investigateand determine the existence of conflicts of interest; and (2) duty to "deal honestly" with plaintiffand "refrain from making misrepresentations" prejudicial to plaintiff in connection withdefendants' withdrawal from representing him. Plaintiff sought damages in the amount of$130,000, for the pro se defense of his own lawsuit, including litigation expenses and filing fees.

In count II, plaintiff alleged tortious interference on the part of defendants for interferingwith his contractual relationship with Wildman, by engaging in a course of action that misledWildman into relying on defendants' claims that no conflicts of interest prevented defendantsfrom representing both plaintiff and Wildman. Plaintiff alleged malice on the part of defendants,stating that defendants' motive for their misconduct was to "favor the interests of Wildman andthereby better ensure that the Wildman firm would retain them as counsel in the Songer lawsuit."

Plaintiff's count III contained further allegations of breach of fiduciary duty againstdefendant for "knowing participation in the Wildman firm's withholding" benefits ofprepayments for legal services owed to plaintiff by Wildman. Plaintiff alleged that defendantsrefrained from investigating and reporting conflicts of interest that would have precludeddefendants from representing both plaintiff and Wildman in the Songer lawsuit. Plaintiffrequested restitution in the form of the value of the prefunded legal defense that Wildman did notdistribute "but rather kept for itself," an amount in excess of $50,000.

Count IV of plaintiff's complaint alleged that defendants breached their contract torepresent plaintiff, causing plaintiff "to be deprived of the benefit of defendants' services thatwould have confirmed that conflicts existed and, consequently, deprived of the benefit ofalternative counsel." Plaintiff asserted damages in the amount of $130,000 in compensation forhis pro se representation.

Defendants filed a motion to dismiss plaintiff's complaint pursuant to section 2-615 of theIllinois Code of Civil Procedure (735 ILCS 5/2-615 (West 2000)) for failure to state a cause ofaction. Defendants referred to an excerpt of a letter dated May 11, 1998, contained in plaintiff'scomplaint, written by plaintiff to attorney Michael Trucco, separate counsel to Wildman on theSonger matter, in which plaintiff stated:

"I understand that the firm has engaged Gerry Saltarelli to defendthe interests of both the firm and myself and is tendering hisservices to me. I am troubled by the fact that the firm has nottendered separate counsel for each of the defendants in order todeal with conflicting interests.

* * *

Certainly, it makes sense to resolve this issue at the outset, ifpossible, so as to avoid the prospect that at some future dateseparate counsel must be retained and that Gerry would bedisqualified from continuing any representation of eitherdefendant. To avoid confusing the situation, I have kept therelationship between Gerry and myself on hold * * *." (Emphasisadded.)

Wildman responded by letter of May 15, 1998:

"As a former partner in the firm the firm will provide you with adefense through counsel of its and ALAS' [Attorneys' LiabilityAssurance Society, Inc.] choice * * * the firm does not agree thatthere is any material actual or potential conflict of interest betweenyou and the firm with respect to the issues raised in the Songercase. * * * If you choose to be separately represented under thesecircumstances, the firm will not be obligated to pay for yourdefense or indemnify you against any adverse settlement orverdict."

This letter was also attached as an exhibit to plaintiff's complaint.

Defendants argued that plaintiff was unsuccessful in securing funding for separatecounsel and offered to agree to defendants' representation provided that defendants consented toa series of conditions that, defendants asserted, would have required Saltarelli to violate theattorney-client relationship he had previously established with Wildman.

Saltarelli subsequently met with plaintiff on May 26, 1998, to discuss the prospects forjoint representation of plaintiff and Wildman. At this meeting, Saltarelli advised plaintiff that hisconditions for Saltarelli's retention were unacceptable because they were inconsistent with theproposed joint representation. Saltarelli memorialized his rejection of plaintiff's conditions andadvised plaintiff to secure other legal counsel in a May 27, 1998, letter as follows:

"When we first met, you indicated that you were notprepared to accept our representation as you had certain mattersthat you wished to clarify with the Wildman firm. Because of yourreservations, we deferred any substantive discussion of this case.

* * *

I then received the May 18 letter in which you outline theconditions under which you expect this firm to operate if it is torepresent you. Those conditions are unacceptable because theywould prevent us from fulfilling our professional responsibilities tothe Wildman firm."

Defendants argued that Saltarelli's decision to decline to represent plaintiff individually wascommunicated to plaintiff with "ample time" for plaintiff to obtain separate counsel and had noadverse impact on plaintiff's defense of the Songer litigation. After Songer settled with Wildmanand agreed to voluntarily dismiss their action against plaintiff, plaintiff was not obligated tocontribute to the settlement. Thus, plaintiff sustained no damages.

After a hearing on defendants' motion to dismiss, the trial court determined that theallegations contained in plaintiff's complaint were factually and legally insufficient and dismissedthe action with prejudice to reinstate the claim. The trial court stated as follows:

"I have heard the arguments, and I'm going to grant the motionbasically for the reason I had stated previously, but also it seems tome I don't think there was an attorney-client relationship. I thinkthat I can look at the complaint, and I can look at the letters, and Idon't think there was a meeting of the minds. I don't think there is[sic] any contract claims, and I don't think there is any contractbetween the parties, and I don't think there was anything, anywrong claimed. So I'm going to grant the motion. Thank you verymuch."

Plaintiff filed his timely appeal on August 14, 2001.

OPINION

Plaintiff contends that the trial court erred in dismissing his second amended, revisedcomplaint, which contained four counts.

A motion to dismiss brought under section 2-615 admits all well-pled facts in theplaintiff's complaint. People ex rel. Ryan v. Telemarketing Associates, Inc., 198 Ill. 2d 345, 763N.E.2d 289 (2001). When reviewing a section 2-615 dismissal, the reviewing court mustdetermine whether the allegations, when construed in the light most favorable to the plaintiff, aresufficient to establish a cause of action upon which relief may be granted. Connick v. SuzukiMotor Co., 174 Ill. 2d 482, 490, 675 N.E.2d 584 (1996). Dismissal will be held proper only if itclearly appears that no set of facts can be proved under the pleadings that will entitle the plaintiffto recover. Bryson v. News America Publications, Inc., 174 Ill. 2d 77, 86-87, 672 N.E.2d 1207(1996). We review a section 2-615 motion to dismiss de novo. Neade v. Portes, 193 Ill. 2d 433,439, 739 N.E.2d 496 (2000).

We also consider the exhibits attached to the complaint (Flip Side, Inc. v. ChicagoTribune Co., 206 Ill. App. 3d 641, 564 N.E.2d 1244 (1990)), and where the allegations of thecomplaint conflict with the facts contained in an exhibit, the exhibit controls. McGuire v.Ameritech Cellular Corp., 314 Ill. App. 3d 83, 731 N.E.2d 343 (2000).

A. Count I: Legal Malpractice/Breach of Fiduciary Duty

In any legal malpractice action, a plaintiff must plead the existence of a valid underlyingcause of action. Sheppard v. Krol, 218 Ill. App. 3d 254, 578 N.E.2d 212 (1991). Four elementsmust be alleged and proven: (1) the existence of an attorney-client relationship that establishes aduty on the part of the attorney; (2) a negligent act or omission that breached that duty;(3) proximate cause that establishes that but for the attorney's negligence, plaintiff would not havesuffered an injury; and (4) damages. Pelham v. Griesheimer, 92 Ill. 2d 13, 440 N.E.2d 96 (1982).

The attorney-client relationship is consensual and arises only where both the attorney andthe client have consented to the retention. Torres v. Divis, 144 Ill. App. 3d 958, 963, 494 N.E.2d1227 (1986). A client must manifest his authorization for an attorney to act on his behalf and theattorney must indicate his acceptance of the authorization to represent the client's interests. Torres,144 Ill. App. 3d at 963.

Here, plaintiff alleges that on or before May 1, 1998, without his knowledge orparticipation, Saltarelli and Wildman agreed that defendants would represent Wildman in theSonger litigation. Plaintiff further alleges that, thereafter, Saltarelli consented to the defendants alsoserving as his counsel in the Songer litigation. However, the record shows that plaintiff's letter ofMay 18, 1998, merely established plaintiff's conditional consent to representation by defendants. The exhibits, therefore, demonstrate that defendants refused to represent plaintiff; in Saltarelli'sletter of May 27,1998, as quoted above, Saltarelli informed plaintiff that his conditions ofrepresentation were unacceptable and that he should secure other counsel.

Under the facts alleged in plaintiff's complaint, he has failed to show the existence of anattorney-client relationship. Because plaintiff has shown no duty of defendants to him, he cannotshow any breach of that duty. Plaintiff's entire appeal hinges on the allegation of a contractualrelationship which finds no support in the record.

B. Count II: Tortious Interference

To recover under a theory of tortious interference, a plaintiff is required to plead and provethe following: (1) the existence of a valid enforceable contract between the plaintiff and a thirdparty; (2) the defendant was aware of the contract; (3) defendant intentionally and unjustifiablyinduced a breach of the contract; (4) defendants' wrongful conduct caused a subsequent breach ofthe contract by the third party; and (5) the plaintiff was damaged as a result. Strosberg v. BrauvinRealty Services, Inc., 295 Ill. App. 3d 17, 32-33, 691 N.E.2d 834, 845 (1998).

In the present case, plaintiff contends that defendants failed to represent him and madeintentional false statements against him, thereby prejudicing him and causing Wildman to refuse totender separate counsel for him in the Songer litigation. However, the complaint fails to adequatelyallege how defendants' decision to decline to represent him pursuant to his specific representationdemands either constituted "false statements" or prejudiced him in such a way that Wildman refusedto obtain different counsel for him. The record shows that under the agreement plaintiff had withWildman as a former partner, Wildman would not be obligated to pay for his defense or toindemnify plaintiff against any adverse settlement or verdict if he chose to be separatelyrepresented. Plaintiff has failed to make a case for tortious interference.

C. Count III: Participation in Wildman's Breach of Fiduciary Duties

Plaintiff contends that Wildman was obligated to release "pre-funded firm assets" to pay forseparate counsel to defendant him in the Songer litigation. Plaintiff argues that Wildman's refusal topay for separate counsel constituted a breach of fiduciary duty and that defendants "intentionallyparticipated" in this breach by failing to investigate and report on potential conflicts in exchange forWildman's agreement to retain defendants as its counsel. In his complaint, plaintiff conceded thatdefendants were retained to represent Wildman prior to any discussions with plaintiff for a jointdefense.

This court has held that a third party who colludes with a fiduciary in committing a breachof duty, induces or participates in such breach, and obtains the benefits therefrom is directly liableto the aggrieved party. Regnery v. Meyers, 287 Ill. App. 3d 354, 679 N.E.2d 74 (1997); Village ofWheeling v. Stavros, 89 Ill. App. 3d 450, 455, 411 N.E.2d 1067 (1980).

Here, plaintiff has failed to show either that Wildman breached a fiduciary duty, thatdefendants participated in such a breach, or that defendants benefitted from such purported breach. Under these circumstances, defendant's claim was properly dismissed.

D. Claim for Attorneys Fees

Finally, plaintiff contends that he is entitled to reimbursement of attorney fees for hisexpenses incurred in representing himself in the Songer litigation.

Our courts have declined to award attorney fees to pro se litigants, even when the litigantsare attorneys. The United States Supreme Court has held that a pro se attorney is not entitled torecover attorney fees, noting that permitting such recovery would act as a disincentive to engagecounsel and that the policy of "furthering the successful prosecution of meritorious claims is betterserved by a rule that creates an incentive to retain counsel in every such case." Kay v. Ehrler, 499U.S. 432, 438, 113 L. Ed. 2d 486, 493, 111 S. Ct. 1435, 1438 (1991). Illinois courts have similarlyprohibited the award of attorney fees in pro se litigation. See, e.g., Hamer v. Lentz, 132 Ill. 2d 49,547 N.E.2d 191 (1989) (no attorney fee award to attorney proceeding pro se, notwithstandingstatute authorizing recovery of reasonably incurred attorney fees).

Based on the record on appeal, plaintiff's complaint was properly dismissed. We thereforeaffirm the judgment of the trial court.

Affirmed.

QUINN and HARTIGAN, JJ., concur.

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