Lewsader v. Wal-Mart Stores, Inc.
State: Illinois
Court: 4th District Appellate
Docket No: 4-97-0460
Case Date: 04/03/1998
NO. 4-97-0460
IN THE APPELLATE COURT
OF ILLINOIS
FOURTH DISTRICT
RALPH LEWSADER and VICTORIA LEWSADER, ) Appeal from
Plaintiffs-Appellees, ) Circuit Court of
v. ) Champaign County
WAL-MART STORES, INC., a Delaware ) No. 93L1173
corporation, )
Defendant, )
and )
BETTYE D. KELSO, Administrator of the )
Estate of THOMAS R. KELSO, Deceased, )
Petitioner-Appellant, )
v. )
WAL-MART STORES, INC., a Delaware ) Honorable
corporation, ) George S. Miller,
Appellee. ) Judge Presiding.
_________________________________________________________________
PRESIDING JUSTICE GARMAN delivered the opinion of the
court:
Intervenor-appellant Bettye D. Kelso, administrator of
the estate of Thomas R. Kelso (Estate), appeals from a May 9, 1997,
order of the circuit court of Champaign County. The trial court
found that the Estate had neither a valid statutory attorney's lien
(770 ILCS 5/1 (West 1996)) nor an equitable lien in the settlement
proceeds in the matter of Lewsader v. Wal-Mart Stores, Inc.,
herein. The Estate has abandoned the argument that a valid
statutory attorney's lien exists and now argues only that Kelso's
agreement with the Lewsaders and his efforts on their behalf
created an equitable lien on the settlement amount for which Wal-
Mart Stores, Inc. (Wal-Mart), is liable. We reverse and remand to
the trial court for further proceedings.
Plaintiff Ralph Lewsader was seriously injured on October
1, 1991, when he fell from a scaffold as he worked on the construc-
tion of Sam's Club Discount Store in Champaign, Illinois. On
December 23, 1991, Lewsader and his wife, Victoria, retained
attorney Thomas R. Kelso of the law firm of Beckett, Crewell, and
Kelso to represent them in the personal injury matter. Under the
terms of the attorney-client agreements signed by Kelso and the
Lewsaders on December 23, 1991, the firm was to receive "33 1/3% of
any amount recovered by settlement, with or without court proceed-
ings, or by final judgment of any court." On September 20, 1993,
Kelso filed a nine-count complaint on behalf of the Lewsaders in
the circuit court of Champaign County naming the architect,
general contractor, and Wal-Mart, the owner of the premises, as
defendants. The contractor and Wal-Mart filed third-party
complaints against Lewsader's employer for contribution.
During the pendency of this matter, the firm dissolved
and Kelso formed a new firm, Kelso and Associates. A letter dated
December 19, 1993, informed the trial court that Kelso and Associ-
ates then represented the Lewsaders. No new attorney-client
agreement was executed. Kelso settled Ralph's workers' compensa-
tion claim against his employer, which was dismissed by stipulation
of all parties on May 23, 1995, and received $20,000 in legal fees
for his services. In February 1996, he settled the Lewsaders'
claims with the general contractor for $300,000, for which his firm
received $100,000 in fees. The trial court entered an order
granting plaintiffs' petition for a good-faith finding, pursuant to
the Illinois Joint Tortfeasor Contribution Act (740 ILCS 100/1 et
seq. (West 1996)), over Wal-Mart's objections, on March 1, 1996.
Kelso also conducted discovery and prepared the case for
trial. The voluminous record discloses that Kelso prepared and
filed many motions and supporting memoranda. He opposed the motion
for summary judgment in favor of the architect that was granted on
January 14, 1994. He filed multiple motions for partial summary
judgment (August 11 and October 6, 1995, and September 4, 1996) on
certain elements of the Structural Work Act (see Ill. Rev. Stat.
1991, ch. 48, par. 59.90 et seq. (740 ILCS 150/0.01 et seq. (West
1992))) claim. He engaged in extensive discovery, including taking
depositions, and responded to defendants' discovery requests. In
addition, on September 23, 1995, he filed a motion and memorandum
seeking to bar Wal-Mart's expert witness for failure to comply with
Supreme Court Rule 220 (134 Ill. 2d R. 220). He had repeated
correspondence with opposing counsel regarding alleged discovery
abuses and on September 11, 1995, filed a motion to compel and a
motion for sanctions. He also filed multiple motions dealing with
jury instructions, use of demonstrative exhibits, voluntary
dismissal of certain counts, and other matters.
Due to the congested condition of the trial court
calendar, the November 1995 trial date was postponed. As of March
1, 1996, Wal-Mart was the only remaining defendant. All work done
by Kelso and his firm after that date related entirely to the
pending litigation against Wal-Mart. After Wal-Mart became the
sole remaining defendant, Kelso filed objections to the withdrawal
of Wal-Mart's counsel and a third motion for sanctions on August 1,
1996; a motion for partial summary judgment on September 4, 1996;
and successfully opposed Wal-Mart's September 11, 1996, motion to
dismiss based upon the repeal of the Structural Work Act (740 ILCS
150.01 et seq. (West 1996)). However, the record is clear that
much of the work done prior to that date related only to Wal-Mart.
Kelso died on September 29, 1996. On October 8, 1996,
the Lewsaders entered into another attorney-client agreement with
the Kelso firm and, on October 9, 1996, a member of that firm
responded to Wal-Mart's motion to continue the trial date from the
November 1996 jury term to a later date. The Lewsaders then
retained the law firm of Johnson, Frank, Frederick, and Walsh as
counsel in this matter and, on October 10, 1996, Ralph informed the
Kelso firm by letter that he was terminating their relationship
with the firm. On October 22, 1996, the Kelso firm attempted to
serve notice of an attorney's lien on Wal-Mart.
The trial was reset for May 1997, and a court-ordered
settlement conference was held on April 23, 1997. A settlement was
reached. Under the terms of the agreement, Liberty Mutual
Insurance Company (Liberty Mutual), Wal-Mart's insurance carrier,
was to pay the Lewsaders $300,000 in exchange for their complete
release of all claims and dismissal of the action. On April 30,
1997, the Lewsaders filed a motion to bar the attorney's lien and,
on May 8, 1997, the Estate filed a petition for leave to intervene
and a petition to enforce the attorney's lien.
At the May 9, 1997, hearing, the Estate argued that Kelso
was entitled to a portion of the proceeds of the settlement under
two theories, a valid attorney's lien pursuant to statute (770 ILCS
5/1 (West 1996)) and an equitable lien. The trial court ruled
against the Estate on both theories and ordered that Wal-Mart and
Liberty Mutual "tender the settlement check in this case payable
solely to Ralph Lewsader, Victoria Lewsader and the Law Offices of
JOHNSON, FRANK, FREDERICK & WALSH." A settlement check in the
amount of $300,000 was tendered by Liberty Mutual on May 15, 1997.
MOTION TO DISMISS
We first address the September 7, 1997, motion by Wal-
Mart to dismiss it from these proceedings. Wal-Mart argues that
it, through its insurance carrier, has fully complied with the
valid trial court order of May 9, 1997, and that even if the Estate
is successful in this appeal, Wal-Mart would not be liable for any
amount awarded to the Estate. Wal-Mart also notes that the Estate
did not seek a stay of the order pending this appeal.
In their brief, the Lewsaders offer support for this
argument, stating that the entire matter is rendered moot by the
disbursement of the settlement check. Citing the decision of our
supreme court in In re Estate of Wellman, 174 Ill. 2d 335, 353, 673
N.E.2d 272, 280 (1996), they assert that, as a result of all
settlement proceeds having been distributed, this court would be
unable, in any event, to grant relief. Wellman, however, involved
an adjudication of mental disability where the subject of the
action died during the appeal. The issue became moot because the
individual could not have been given any effective relief after his
death. In this case, relief could be given, if it is found to be
appropriate, by ordering payment by the proper party to the Estate.
In response to Wal-Mart's motion to dismiss, the Estate
argues that Wal-Mart is a necessary party to this appeal because,
if this court should reverse, Wal-Mart will be liable for the
amount of the attorney's lien. Under this reasoning, Wal-Mart
acted "at its own peril" when it disbursed the settlement funds
while the order was still subject to appeal and, thus, continues to
be liable if it acted in derogation of a valid attorney's lien. We
note that Wal-Mart did not seek a stay of the order, nor did Wal-
Mart pay the money to the court or post bond pending this appeal.
The Estate cites Process Color Plate Co. v. Chicago Urban
Transportation District, 125 Ill. App. 3d 885, 890, 466 N.E.2d
1033, 1037 (1984), for the proposition that the lienee must "stand
ready to pay the lawyer that portion of the proceeds which the
client agreed to pay the lawyer." In that case, however, the
petitioner attorney had properly served the defendant with notice
of the lien as required by statute. So, too, in Bennett v. Chicago
& Eastern Illinois R.R. Co., 327 Ill. App. 76, 63 N.E.2d 527
(1945), and Case v. Emerson-Brantingham Co., 269 Ill. 94, 109 N.E.
671 (1915), also cited by the Estate, the petitioner attorneys had
served notice on the defendants under the terms of the attorney's
lien law. The statutory lien argument failed at the trial court
and is not made in this appeal.
The Estate also asserts that if this court finds an
equitable lien exists, Wal-Mart, not the Lewsaders, will be liable
for the amount of that lien. As noted above, however, all cases
cited by the Estate involve statutory liens and, therefore, do not
necessarily provide support for this proposition. On the other
hand, Wal-Mart has cited no authority for its conclusion that if
this appeal is successful, Wal-Mart would not be required to pay
any additional funds to satisfy the lien. Because Wal-Mart has not
offered any support for concluding, at this stage, that it cannot
be held liable as a matter of law, the motion to dismiss is denied.
We now turn to the issues of (1) whether, as a matter of
law, the estate of a deceased attorney is precluded from asserting
an equitable lien when the attorney died before settlement; (2)
whether an equitable lien was created that entitles the Estate to
a portion of a settlement reached after Kelso's death; and (3) if
such a lien does exist, the amount to which the estate is entitled;
and (4) whether a defendant that has already tendered the agreed
settlement amount to the client is liable for payment.
I. AVAILABILITY OF EQUITABLE REMEDY
We note initially that a trial court has broad equitable
power to grant relief when there is no adequate remedy at law. The
exercise of these equitable powers "is a matter of sound judicial
discretion controlled by established principles of equity and
exercised upon a consideration of all the facts and circumstances
of a particular case." Omni Partners v. Down, 246 Ill. App. 3d 57,
62, 614 N.E.2d 1342, 1346 (1993). Thus, the decision to grant or
deny equitable relief is within the sound discretion of the trial
court and will not be reversed by this court absent an abuse of
that discretion. In this case, the Estate has no adequate remedy
at law because Kelso did not comply with the terms of the statutory
attorney's lien provision. 770 ILCS 5/1 (West 1996). There is no
doubt that when the statutory remedy is unavailable, a trial court
may use its equitable power to award fees to an attorney using
equitable lien, quantum meruit, or other equitable device. The
equitable lien has been employed in this manner both before
(Cameron v. Boeger, 200 Ill. 84, 65 N.E. 690 (1902)) and after
(Home Federal Savings & Loan Ass'n v. Cook, 170 Ill. App. 3d 720,
525 N.E.2d 151 (1988)) enactment of the attorney's lien law in 1909
(1909 Ill. Laws 97, 1).
The trial court, however, did not exercise its discretion
to award or deny equitable relief to the Estate when the remedy at
law, the statutory lien, was found not to be available. Rather,
the trial court specifically found that any contract that existed
between the Lewsaders and Kelso was terminated by Kelso's death and
further found, as a matter of law, that an equitable lien could not
exist unless it were based on a contract that was still in force at
the time of the settlement. The trial court then stated, "Now you
tell me where there is a case that allows me to give you a lien
against the funds after the contract has terminated due to the
death of the attorney claiming the lien and I will be glad to
follow that case." It is this decision, and not an exercise of
equitable powers, that we are asked to review. Because the trial
court ruled on the law and not on the facts of this case, we review
de novo the decision that there can be no lien asserted by the
estate of a deceased attorney who provided services under a
contingency agreement. We find that decision to be incorrect as a
matter of law.
In 1943, the Seventh Circuit Court of Appeals considered
a case factually similar to this one, Roe v. Sears, Roebuck & Co.,
132 F.2d 829 (7th Cir. 1943). Attorney Roe was employed by Sears
on a contingency basis to recover certain tax payments but he died
in June 1934, "long prior to the recovery of any money" by Sears,
although he had "performed some services." Roe, 132 F.2d at 831.
Sears' eventual recovery came about not because of any efforts of
Roe's, but because a subsequent act of Congress authorized the tax
refund. The court concluded:
"In Illinois, an attorney who has been
employed on a contingent basis to collect a
claim for his client and who dies before
recovery by client is had, but who renders
service pursuant to such contract, leaves a
cause of action against the client, which
survives his death. The contract of employ-
ment is ended by the attorney's death, but his
representative may recover the reasonable
value of the attorney's services, if client
ultimately recovers on his claim." Roe, 132
F.2d at 831.
Roe does not discuss the various remedies available to the
representative of the deceased attorney's estate and mentions a
lien only in passing. However, Roe leaves no doubt that recovery
is not barred simply because an attorney dies before settlement is
reached.
Roe was cited by the Supreme Court of Oklahoma in 1945 in
a case that held a deceased attorney's statutory lien could be
enforced by his estate against a settlement that had been deposited
with the court clerk. City of Barnsdall v. Curnutt, 198 Okla. 3,
174 P.2d 596 (1945). Curnutt was employed on a contingency basis
and had performed services at the time of his death. Upon his
death, the client employed and paid other attorneys. The court
held that "[t]he termination of the contract by death does not
invalidate it for all purposes." Curnutt, 198 Okla. at 7, 174 P.2d
at 600. Under the contingency arrangement, Curnutt was to receive
40% of the amount recovered; he obtained a tentative settlement
offer of $25,000 before his death. The case eventually settled for
$35,000. The court gave effect to the statutory lien and awarded
the Curnutt estate $10,000, or 40% of the $25,000 offer he had
obtained. Our supreme court has also cited Roe with approval (In
re Estate of Barbera, 55 Ill. 2d 235, 237, 302 N.E.2d 302, 304
(1973) (holding that contingent fees are an asset of the partner-
ship in which the estate of a deceased partner is entitled to
participate)).
Aside from Roe, there is other Illinois precedent for the
proposition that the estate of a deceased attorney may recover
contingency fees. In Sullivan v. Fawver, 58 Ill. App. 2d 37, 44,
206 N.E.2d 492, 495 (1965), the court held that even in the absence
of an express contract, the estate was entitled to 25% of the
settlement offer on the table at the time of the attorney's death.
The court found that this amount represented lawyer Sullivan's
usual and customary fee and was reasonable compensation for his
services up to the time of his death.
The Lewsaders argue, and the trial court held, that the
estate of a deceased attorney cannot recover for services rendered
on a contingent fee basis where the attorney died before the
settlement was reached. For this proposition, the Lewsaders cite
In re Heirich, 10 Ill. 2d 357, 140 N.E.2d 825 (1956). Heirich,
however, held only that the right to practice expires with the
death of the attorney and that his pending cases thus cannot be
assigned to other counsel by the representative of the estate.
We hold, in keeping with Roe, that when an attorney
provides services to a client under a contingency agreement,
recovery of attorney fees is not barred by the death of the
attorney. We must also determine whether the specific remedy
requested by the Estate, an equitable lien, is barred by Kelso's
death. Although the "practical value of this rule of equity in the
context of attorneys' liens has been significantly diminished with
the enactment of the Illinois Attorneys' Lien Act, the rule remains
a viable one and has survived the adoption of the Lien Act."
McKee-Berger-Mansueto, Inc. v. Board of Education, 691 F.2d 828,
835-36 (7th Cir. 1982). Despite the dearth of recent cases on
point, there is ample authority for us to conclude an equitable
lien is enforceable by the successors, heirs, administrators, and
executors of a deceased lienor. In re Estate of Jones, 41 Ill.
App. 2d 488, 191 N.E.2d 656 (1963) (abstract of op.) (slip op. at
5); Dasher v. Bruno, 5 Ill. App. 2d 500, 506, 126 N.E.2d 404, 407
(1955); Harney v. Colwell, 314 Ill. App. 173, 176, 41 N.E.2d 123,
125 (1942). We therefore hold that if an equitable lien arose in
this case, it was not extinguished by Kelso's death.
II. EXISTENCE OF EQUITABLE LIEN
An equitable lien is "neither a debt nor a property
right; rather, it is a remedy for a debt." Paine/Wetzel Associ-
ates, Inc. v. Gitles, 174 Ill. App. 3d 389, 393, 528 N.E.2d 358,
360 (1988). Before a trial court may exercise its discretion to
grant such a remedy, it must make certain findings of fact
regarding the elements of an equitable lien: "(1) a debt, duty, or
obligation owing by one person to another, and (2) a res to which
that obligation attaches." Paine/Wetzel, 174 Ill. App. 3d at 393,
528 N.E.2d at 360. Further, to find an equitable lien based on a
contingency agreement, one party must have made an assignment such
"'as gives the assignee a title which, though
not cognizable at law, equity will recognize
and protect. [Citations.] There must be an
implied appropriation of the fund, or of some
designated part, proportion or percentage of
it, to act as an equitable assignment.'"
McKee, 691 F.2d at 836, quoting Lewis v.
Braun, 356 Ill. 467, 477-78, 191 N.E. 56, 61
(1934).
As this court has stated previously, an equitable lien
may arise in two situations:
"First, the lien arises where the parties
express in writing their intention to make
real or personal property, or some fund, the
security for a debt, or where there has been a
promise to convey or assign property as secu-
rity. Second, equity recognizes such a lien
without an express agreement between the
parties, which arises wholly from general
considerations of fairness and justice."
Agribank, FCB v. Whitlock, 251 Ill. App. 3d
299, 310, 621 N.E.2d 967, 975 (1993), citing
Paine/Wetzel, 174 Ill. App. 3d at 393, 528
N.E.2d at 360.
Other authorities suggest that in addition to creation by an
express written agreement, an equitable lien may be created by an
implied-in-fact contract or imposed by the court to prevent unjust
enrichment. 1 D. Dobbs, Law of Remedies 4.3(3), at 600-01 (2d ed.
1993). Another source explains:
"An equitable lien may be created by an
express contract which shows an intention to
charge some particular property with a debt or
obligation, or it may arise by implication
from the relations and dealings of the parties
whose interests are involved. It may also be
created by an equitable assignment of a con-
tract, debt, or fund, or by a judicial de-
cree." (Emphasis added.) 51 Am. Jur. 2d
Liens 25 (1970), citing, inter alia, Williams
v. Vanderbilt, 145 Ill. 238, 34 N.E. 476
(1893).
It has been said:
"At common law in Illinois, an attorney
could not acquire a lien on a judgment or on a
fund recovered by means of his or her legal
services unless there existed an express
agreement that worked an equitable assign-
ment." McKee, 691 F.2d at 834.
This conclusion by the seventh circuit relied upon Illinois cases
decided in 1892 and 1896 and, although it requires an express
agreement, it does not require an express written agreement.
Sullivan, decided in 1965, clearly allows recovery of attorney fees
in the absence of an express written agreement.
We are called upon here to apply and to harmonize two
distinct bodies of law--that of equitable liens and that relating
to attorney fees. We are unwilling to go so far as to suggest that
an equitable lien for attorney fees should be imposed by a court in
the absence of an attorney-client agreement merely out of a sense
of fairness. We do find, however, in keeping with the case law of
equitable liens in general, and with Sullivan in particular, that
the agreement underlying an equitable lien need not be an express
written agreement.
Thus, in this case, an equitable lien in favor of Kelso
could have been created by the express contract signed by Kelso and
the Lewsaders and, once created, would be enforceable by any
successor to the contract. Jones, 41 Ill. App. 2d at 488, 191
N.E.2d at 656; Dasher, 5 Ill. App. 2d at 506, 126 N.E.2d at 407;
Harney, 314 Ill. App. at 176, 41 N.E.2d at 125. So, too, even
after the disbanding of one law firm and the creation of another,
the "relations and dealings" of the parties could have given rise
to an implied agreement and an equitable lien. Surely, had Kelso
lived and seen the case to its conclusion, the lack of a second
signed agreement with his new firm would not have prevented him
from recovering his fees.
The Estate argues that the existence of an equitable lien
is a question of law and, thus, we may review the decision of the
trial court de novo, citing Oldweiler v. Peoples Bank, 161 Ill.
App. 3d 317, 320, 514 N.E.2d 541, 543 (1987), in which this court
stated that we are not bound by the trial court's findings when
"the construction and legal effect of an instrument raises a
question of law in the absence of any material question of fact."
The Lewsaders argue that we may not reverse the decision of the
trial court unless we find an abuse of discretion, citing In re
Estate of Callahan, 144 Ill. 2d 32, 43-44, 578 N.E.2d 985, 990
(1991), and Merchandise National Bank v. Scanlon, 86 Ill. App. 3d
719, 729, 408 N.E.2d 248, 255 (1980). Both of these cases,
however, involved an award of attorney fees and the abuse of
discretion standard was applied to the trial court's determination
of the amount of those fees, not to the existence of a lien.
In the section that follows, we apply the standard
announced in Oldweiler and conclude that the language of the
original agreement between the Lewsaders and Beckett, Crewell and
Kelso created an equitable lien at the time the agreement was made.
The additional questions--whether Kelso succeeded to that lien or
equity requires recognition of a lien in favor of Kelso based on
the conduct of the parties--are inquiries that must be left to the
discretion of the trial court.
Whether an equitable lien is created by a contract
between an attorney and a client turns "on the precise language
employed in the fee agreement." In re Brass Kettle Restaurant,
Inc., 790 F.2d 574, 576 (7th Cir. 1986). Language that is "a mere
personal promise by the client to pay attorneys fees in an amount
equal to a specified portion of the fund to be recovered or out of
the proceeds of such a fund" does not create an equitable lien.
Brass Kettle, 790 F.2d at 576. In contrast, an equitable assign-
ment is created by language that definitely fixes compensation at
a certain percentage of the total sum collected. Lewis, 356 Ill.
at 477, 191 N.E. at 60-61.
A contract that requires the client to personally pay
fees to the attorney "the amount of which was to be determined by
what was recovered" (Cameron, 200 Ill. at 91, 65 N.E. at 692), does
not give rise to an equitable lien. Similarly, a client's promise
to pay "an amount equal to" a certain percentage of the recovery
"constituted nothing more than a personal promise to pay for legal
services and did not purport to assign an equitable interest."
Department of Public Works v. Exchange National Bank, 93 Ill. App.
3d 390, 394, 417 N.E.2d 1045, 1048-49 (1981).
The contracts signed by the Lewsaders and Kelso on
December 23, 1991, contained the following provision:
"3. Client hereby agrees to pay to Attor-
ney for all of the said services rendered and
to be rendered by Attorney, the following:
(a) 33 1/3% of any amount re-
covered by settlement, with or with-
out court proceedings, or by final
judgment of any court.
(b) 40% of any amount recovered
after final judgment in court pro-
ceedings after an appeal by either
party.
(c) NO FEES IN ANY AMOUNT in
the event no recovery is obtained."
This language is quite similar to that in Cook (170 Ill.
App. 3d at 722, 525 N.E.2d at 153), where an agreement "to pay said
attorneys a contingent fee of 40% of any monies recovered on my
behalf by either settlement or jury verdict" was found to create an
equitable lien. It is also similar to the language in Achs v.
Maddox, 175 Ill. App. 3d 989, 994, 530 N.E.2d 612, 615 (1988),
where an equitable lien was created by language indicating that the
attorneys "were to look directly to the fund recovered for payment
of their fees."
The seventh circuit decisions in McKee and Brass Kettle
reach the same result applying Illinois law. In McKee, the
contingent fee agreement entitling the attorneys to "one-third
(1/3) of any and all recoveries made on the claims by virtue of
trial, settlement, or other disposition of the proposed litigation"
was "decisive." McKee, 691 F.2d at 837. In Brass Kettle, an
agreement that the attorney would receive "Forty Percent (40%) of
any recovery made in [Brass Kettle's] behalf" created a valid
equitable lien on the later recovery. Brass Kettle, 790 F.2d at
576.
Because the contract language in the Kelso-Lewsader
agreement is virtually identical to that in McKee, and because
under Oldweiler the legal effect of such an instrument is a
question of law, we conclude that the December 23, 1991, agreements
did create an equitable lien on any amount subsequently recovered.
We note, in addition, that an equitable lien is created at the time
of the underlying agreement, not when recovery is eventually had.
Brass Kettle, 790 F.2d at 576; McKee, 691 F.2d at 837; Cook, 170
Ill. App. 3d at 724, 525 N.E.2d at 154.
We have determined only that an equitable lien was
created upon the signing of the December 23, 1991, agreements
between the Lewsaders and the firm of Beckett, Crewell and Kelso
and that Kelso's death prior to the settlement does not preclude
recovery. We remand to the trial court for consideration of
whether Kelso was a successor to the lien created by the original
written agreement or whether equity requires recognition of a lien
in favor of Kelso based on the conduct of the parties.
We will briefly address the Lewsaders' argument that the
only remedy available to the Estate is quantum meruit. This
argument relies on the holding in Rhoades v. Norfolk & Western Ry.
Co., 78 Ill. 2d 217, 230, 399 N.E.2d 969, 975 (1979), where the
supreme court held that an attorney who was discharged without
cause could not then perfect a statutory lien but, rather, was
"entitled to be paid on a quantum meruit basis a reasonable fee for
services rendered before discharge." Rhoades was followed in
Public Works (93 Ill. App. 3d 390, 417 N.E.2d 1045), where the
attorney was fired, and in Kannewurf v. Johns, 260 Ill. App. 3d 66,
632 N.E.2d 711 (1994), where the attorney withdrew from the
representation and, thus, rescinded the contingency contract. We
have found no cases involving attorneys who have died during the
course of the representation where the estate has been limited to
the quantum meruit remedy. Roe, Sullivan, and Curnutt suggest that
the estate of a deceased attorney who rendered services under a
contingency agreement may seek recovery under several theories,
including equitable lien.
III. AMOUNT OF LIEN
We also briefly address the Lewsaders' assertion that
because Kelso did not procure the settlement offer from Wal-Mart,
his estate is not entitled to any portion of the fee based upon
that settlement. Sullivan and Curnutt do offer some support for
the proposition that if the deceased attorney obtained an offer of
settlement prior to his death, his estate may recover the contrac-
tual percentage of that offer. These cases do not address the
present case, where the deceased attorney worked on the case for
five years and did reach settlements with other parties but did not
obtain an offer of settlement from the last remaining defendant.
The Lewsaders cite Susan E. Loggans & Associates v. Estate of
Magid, 226 Ill. App. 3d 147, 162, 589 N.E.2d 603, 612 (1992), in
which the court rejected the suggestion that the contingency fee
should be apportioned between the two attorneys, the one who was
fired and the one who actually procured the settlement, based upon
the amount of work done by each. Loggans, however, involved an
attorney who was fired and was limited by Rhoades to the quantum
meruit remedy. The rejection of an apportionment approach does not
necessarily apply when an equitable lien is asserted.
We are faced with a case of first impression. Is an
equitable lien an all-or-nothing remedy so that the estate of a
deceased attorney must be able to point to an offer on the table or
to assert that he did virtually all of the work on the case in
order to recover? Or may a trial court find that a deceased
attorney had an equitable lien, but that recovery of the full
contingency amount is to be reduced because he died before
settlement was reached? Because it is the very nature of an
equitable remedy to be flexible and to rely upon the discretion of
the trial court, we hold that the trial court does have the
discretion, "controlled by established principles of equity and
exercised upon a consideration of all the facts and circumstances
of a particular case" (Omni Partners, 246 Ill. App. 3d at 62, 614
N.E.2d at 1346), to find an equitable lien, but to limit the award
based upon the contribution of the deceased attorney to the
eventual recovery.
IV. LIABILITY FOR PAYMENT OF LIEN
Wal-Mart has not filed a brief in this appeal but has
adopted the Lewsaders' brief. Because the interests of the
Lewsaders and Wal-Mart would diverge if the trial court should find
upon remand that the Estate is entitled to payment of all or part
of the contingency amount, and because this determination will turn
on factual issues such as notice, this issue is properly considered
by the trial court if it becomes necessary.
CONCL USION
For the foregoing reasons we reverse the decision of the
trial court and remand for further proceedings.
Reversed and remanded with directions.
STEIGMANN and McCULLOUGH, JJ., concur.
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