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Jordan v. Ray Schools-chicago

MAY 13, 1964.




Appeal from the Circuit Court of Cook County; the Hon. DANIEL A. ROBERTS, Judge, presiding. Affirmed in part and reversed in part.


This is an appeal from a judgment of the Circuit Court ordering the payment to plaintiff of $13,223 for attorney's fees.

Although the court reserved jurisdiction to determine, after reference to a master, alleged breaches of contract on the part of defendant and what damages, if any should be allowed, the court properly certified that there was no reason to delay enforcement or appeal of the judgment under Section 50(2) of the Civil Practice Act (Ill Rev Stats, c 110, § 50(2)). Plaintiff filed a cross-appeal from a finding against the plaintiff for alleged disbursements.

In May 1954 the parties entered into a written agreement under the terms of which plaintiff was to represent defendant in the prosecution of its claim against the United States Veterans Administration for tuition and other charges under the G.I. Bill of Rights. The following provisions covered fees:

It is understood and agreed that the school shall receive at least the minimum sum of $80,000. In the event that amount shall be all that shall be recovered, for such services, then, no charge shall be made by you, Mr. Jordan for your legal and professional services in behalf of the School. However, if and in the event an amount exceeding the $80,000 shall be obtained for the school, then Mr. Jordan shall be entitled to and shall receive for his said services, an amount equal to twenty (20%) per cent of any and all sums that shall be paid and received by the School, up to and including the payment to the School of the sum of $125,000.

However, should the sum of the payment to the School, exceed $125,000 for the above services, then and in that event, Mr. Jordan shall be entitled to, and he shall be paid twenty (25%) five-per cent, of any and all sums that shall be received by the School in excess of ($125,000) fees above provided to be paid additionally.

In the following July plaintiff claimed a breach of contract and demanded reasonable customary fees because Mrs. Ray, president of defendant corporation, tried to settle a claim in Washington for $62,000, without plaintiff's knowledge or consent. At defendant's request plaintiff continued to do some work, and prior to a hearing set for November 17th told Mrs. Ray that she would have to cancel the first contract and sign a new one or that she would have to obtain new lawyers. On November 13, 1954, she signed the second contract on behalf of defendant which provided for a 20% contingent fee on all sums recovered up to $125,000 and 25% over that amount. In October 1955 plaintiff and defendant executed another contract which provided for an additional 10% contingent fee. In 1957 defendant received $127,231 from the Veterans Administration and promptly paid plaintiff $24,946.26 which purportedly represented 20% of the sum recovered. ($500 seems to have been deducted but no point has been made concerning it.)

Plaintiff brought this action to determine his reasonable percentage of the sum recovered for fees. His complaint also alleged that defendant breached its contract by not permitting him to proceed with the case and prayed that defendant be compelled to finance and cooperate in the further prosecution of its claim and that the court determine the amount of plaintiff's fee, if and when an additional recovery is finally effected. Count II of the complaint asked in addition for $11,210.78 on an account stated for expenses. Defendant filed a counterclaim praying that the second and third contracts be declared void and that the first contract be decreed to be the only valid agreement between the parties and that part of the moneys heretofore paid plaintiff be returned to the defendant.

It was evidently stipulated in the lower court that the judgment order covered all the issues raised in both the complaint and the counterclaim and although there is no formal specific finding with respect to the counterclaim, the court's judgment order expressly states that "This case has been tried upon the issues formed by the plaintiff's third amended complaint, the answer and counterclaim and the plaintiff's reply to the answer and counterclaim." On oral argument before this court this position was reiterated.

The judgment order found (1) that the first contract of May 13, 1954, was abrogated and superseded by the written second contract of November 13, 1954, and that plaintiff was entitled to 20% of the amount recovered or $24,946.26; (2) that the contract of October 22, 1955, for an additional 10% fee was valid and binding; (3) that plaintiff was entitled to an additional $13,223; (4) that plaintiff was not entitled to any sum on account of alleged disbursements and payments of expenses.

Since the first contract is clear and unambiguous and can be given but one meaning, its interpretation is a question of law for the court. Schneider v. Neubert, 308 Ill. 40, 139 N.E. 84; Bertlee Co., Inc. v. Illinois Pub. & Printing Co., 320 Ill. App. 490, 52 N.E.2d 47. Under its terms if a recovery of $127,231 was had, plaintiff was entitled to 20% of the first $125,000 and 25% of the balance. The same result would ensue from the second contract. Therefore the plaintiff is entitled to retain the $24,942.26 he received.

Defendant argues that the third contract of October 22, 1955, for an additional 10% is void because of lack of consideration. The record reveals but sparse references to this agreement. Although Mrs. Ray testified that she refused to make any change and allow him expenses, she did sign the third contract because of her understanding that plaintiff "had to work some kind of a political thing to get it paid and that's what he was doing that time, and he needed more money." Plaintiff testified that the increased compensation represented by this contract was necessitated by unexpected resistance to payment by the Veterans Administration, and that it was desirable to hire someone to assist him in overcoming the delay.

We find that at the time the contract of 1955 was entered into the relationship of attorney and client existed. The law of this state regarding contracts between attorney and client entered into while the parties are in this relationship was well described in the case of Awotin v. Abrams, 321 Ill. App. 304, 52 N.E.2d 827. The court there stated:

Where a contract is entered into after the relation of client and attorney exists, such a contract is presumptively fraudulent and the burden is on the attorney to show affirmatively the utmost good faith and the absence of undue influence, etc. Elmore v. Johnson, 143 Ill. 513; Miller v. Lloyd, 181 Ill. App. 230. This doctrine has never been departed from by our Appellate or Supreme courts but has often been reiterated. ...

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