In re Estate of Allen

SUPREME COURT CASES

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State: Illinois

Court: 5th District Appellate

Docket No: 5-04-0692 NRel

Case Date: 12/01/2005

NOTICE

Decision filed 12/14/05. The text ofthis decision may be changed orcorrected prior to the filing of aPetition for Rehearing or thedisposition of the same.

NO. 5-04-0692

IN THE

APPELLATE COURT OF ILLINOIS

FIFTH DISTRICT

________________________________________________________________________

In re ESTATE OF ARTHUR ALLEN ) Appeal from the

SIMMONS, Deceased ) Circuit Court of

) Williamson County.

(John Alleman, )

)

Petitioner-Appellant, )

)

v. ) No. 03-P-163

)

Lee Fennell, as Executor of the Estate of )

Arthur Allen Simmons, and Curtis Rex Myers, ) Honorable

) Ronald R. Eckiss,

Respondents-Appellees). ) Judge, presiding.

________________________________________________________________________

JUSTICE DONOVAN delivered the opinion of the court:

Arthur Simmons passed away on August 1, 2003, and a petition to probate his willwas filed in the circuit court of Williamson County on November 18, 2003. John Alleman,an attorney whom Simmons had hired to prosecute a medical malpractice case, filed a claimin the probate case, seeking compensation for the legal services he had provided prior toSimmons's death. After a claims hearing, the circuit court denied Alleman's claim andAlleman appealed. The sole issue is whether an attorney is entitled to recover compensationon a quantum meruit basis for services provided under a contingent-fee contract where theclient dies before a monetary recovery is made and the estate refuses to pursue the litigation. The following facts are undisputed. Arthur Simmons hired attorney John Alleman toprosecute a medical malpractice claim. Simmons signed a contingent-fee agreement, theterms of which provided that Alleman would receive a specified percentage of any moniesrecovered through a settlement or a verdict. Simmons also agreed to pay the court costs andlitigation expenses from the recovery. On August 1, 2003, Simmons died of a causeunrelated to the malpractice litigation. The case was in the discovery phase at that time. There is no indication in the record that a settlement offer had been made.

On November 18, 2003, a petition for the probate of Simmons's will and for letterstestamentary was filed in the circuit court of Williamson County. Lee Fennell, Simmons'sdaughter, was appointed as the independent executor (executor) of the estate of Arthur AllenSimmons (the estate), and Simmons's will was admitted for probate. Apparently, Allemancontacted the executor about the malpractice litigation, but she would not authorize thecontinued litigation of the action, and the lawsuit was dismissed.

Alleman filed a $7,500 claim in the probate case, seeking compensation from theestate for the legal services he had provided in the malpractice action. The circuit courtdenied Alleman's claim. In its ruling, the court noted that Alleman had a contingent-feecontract with Simmons and that Alleman's services were terminated before any recovery wasmade in the case. The court determined that Alleman was not entitled to a fee because thecontingent-fee agreement did not provide for attorney fees if there was no recovery. Thecourt indicated that Alleman would have been entitled to quantum meruit had the estate orany beneficiary recovered any money from the malpractice action.

On appeal, Alleman claims that an attorney who provides legal services pursuant toa contingent-fee contract is entitled to be paid reasonable compensation on a quantum meruitbasis for the services rendered where the client dies before a monetary recovery is made andthe estate refuses to pursue the litigation.

Generally, the attorney-client relationship terminates on the death of the client, andthereafter, the attorney must obtain authorization from the decedent's personal representativein order to pursue the interests of the decedent. Clay v. Huntley, 338 Ill. App. 3d 68, 76, 787N.E.2d 317, 323 (2003). In the absence of this authorization, the attorney cannot proceedbecause he no longer represents a party to the litigation. Washington v. Caseyville HealthCare Ass'n, 284 Ill. App. 3d 97, 100, 672 N.E.2d 34, 36 (1996). In this case, the attorney-client relationship and the contingent-fee agreement terminated at the moment Simmonspassed away. The estate declined to authorize Alleman to continue to litigate the action. The case was dismissed and there was no recovery. The question is whether Alleman isentitled to reasonable compensation for the legal services he provided prior to Simmons'sdeath.

In Illinois, a client may terminate the services of his attorney at any time with orwithout cause. Rhoades v. Norfolk & Western Ry. Co., 78 Ill. 2d 217, 227-28, 399 N.E.2d969, 974 (1979). A client has a right to dismiss his suit at will, even if he had a contingent-fee agreement with his lawyer and the lawyer had served notice of his attorney's lien; and thelawyer may not compel the continuation of the lawsuit to protect his lien because the lien isinferior to the client's right to dismiss the action. Herbster v. North American Co. for Life& Health Insurance, 150 Ill. App. 3d 21, 28-29, 501 N.E.2d 343, 348 (1986); Anastos v.O'Brien, 3 Ill. App. 3d 1015, 1020-21, 279 N.E.2d 759, 763-64 (1972). Neither acontingent-fee agreement nor the service of an attorney's lien gives the lawyer an interest inthe subject matter of the litigation, but a proper lien does give the lawyer an interest in theproceeds of the litigation. Anastos, 3 Ill. App. 3d at 1020-21, 279 N.E.2d at 764. In thiscase, there were no litigation proceeds or any settlement offers to which Alleman could claiman interest under the Attorneys Lien Act (770 ILCS 5/0.01 et seq. (West 2000)) or anequitable lien theory.

The Illinois Supreme Court has determined that an attorney who enters into acontingent-fee contract with a client and is discharged without just cause is entitled to bepaid on a quantum meruit basis a reasonable fee for the services rendered up to the date ofthe discharge. See Rhoades, 78 Ill. 2d at 230, 399 N.E.2d at 975; In re Estate of Callahan,144 Ill. 2d 32, 40, 578 N.E.2d 985, 988 (1991). In establishing this rule, the supreme courtreasoned that a contingent-fee contract terminates along with the termination of the attorney-client relationship and that the attorney's recovery cannot be dependent upon terms in anonoperative contract and should not be measured by the results achieved by a successor. Rhoades, 78 Ill. 2d at 230, 399 N.E.2d at 975. Under this rule, the client's rights to controlthe subject matter of the litigation and to discharge his attorney at any time is preserved,while the discharged attorney is permitted to seek reasonable compensation for the serviceshe provided prior to being discharged. Rhoades, 78 Ill. 2d at 230, 399 N.E.2d at 975; In reEstate of Callahan, 144 Ill. 2d at 40-41, 578 N.E.2d at 988.

The Illinois Supreme Court has also determined that an attorney's claim forcompensation under a quantum meruit theory accrues immediately after his services areterminated. In re Estate of Callahan, 144 Ill. 2d at 40, 578 N.E.2d at 988. In reaching thisconclusion, the supreme court recognized that it was possible for a client to receive legalservices and yet not be enriched in a tangible way. In re Estate of Callahan, 144 Ill. 2d at41, 578 N.E.2d at 988-89; Ashby v. Price, 112 Ill. App. 3d 114, 122-23, 445 N.E.2d 438, 444(1983).

In this case, the circuit court denied Alleman's claim on the grounds that thecontingent-fee agreement did not provide for attorney fees in the absence of a monetaryrecovery. However, the contingent-fee agreement and the attorney-client relationshipbetween Alleman and Simmons terminated on Simmons's death, and it was error to denyAlleman's claim for attorney fees based on a contractual provision that was no longeroperative. Rhoades, 78 Ill. 2d at 230, 399 N.E.2d at 975. We note that the circuit courtmade no finding regarding whether Alleman's termination was for just cause. There isnothing in the record to indicate that Simmons was displeased with Alleman or wished toterminate his services. It is reasonable to infer that Alleman would have continued to litigatethe malpractice claim if Simmons had not passed away. Based on the circumstances in therecord, we conclude that Alleman was not terminated because of any fault on his part. Alleman should have been given the opportunity to present evidence of the value of theservices rendered up to his termination. Rhoades, 78 Ill. 2d at 230, 399 N.E.2d at 975; Inre Estate of Callahan, 144 Ill. 2d at 40, 578 N.E.2d at 988. Therefore, we remand the caseto the circuit court for a determination of Alleman's claim for fees. On remand, Alleman willbear the burden of establishing the value of his services, and the court may consider anumber of factors, including Alleman's skill and standing, the nature of the litigation, thetime and labor expended, and any benefits, tangible or intangible, resulting to the client. Inre Estate of Callahan, 144 Ill. 2d at 43-44, 578 N.E.2d at 990.

Accordingly, the decision of the circuit court to deny Alleman's claim for attorneyfees under quantum meruit is reversed, and the cause is remanded for a hearing on the claimfor attorney fees.

Reversed; cause remanded.

SPOMER, P.J., and WELCH, J., concur.