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Stickler v. Mccarthy

SEPTEMBER 23, 1965.

HAROLD STICKLER, PLAINTIFF-APPELLEE,

v.

DANIEL F. MCCARTHY, ET AL., DEFENDANTS-APPELLANTS.



Appeal from the First Municipal District of the Circuit Court of Cook County; the Hon. JOSEPH M. WOSIK, Judge, presiding. Affirmed in part, reversed in part and remanded with directions.

MR. PRESIDING JUSTICE DEMPSEY DELIVERED THE OPINION OF THE COURT.

The plaintiff, Harold Stickler, an attorney at law, sued his former client the defendant, Daniel F. McCarthy, and others for the reasonable value of his services, including a bonus which he alleged was to be paid him based upon the success of his efforts. The services were rendered in behalf of the defendants in a 1957 Superior Court case captioned Pickett v. McCarthy, et al., and in collateral matters arising out of that cause. The other defendants were dismissed and a judgment was entered against McCarthy. The judgment was upon the pleadings and was entered as a sanction under rule 2, section 19-12(3) of the rules of the Municipal Court of Chicago for the defendant's failure to produce documents pursuant to court orders and a deposition subpoena.

There are three principal issues in this appeal: (1) the propriety of the sanction imposed; (2) whether the court erred in denying leave to file a petition for a change of venue and (3) whether damages of $130,000 were properly assessed.

The Pickett v. McCarthy litigation grew out of a dispute over the parties' interest in various parcels of real estate acquired by McCarthy from 1949 through 1956. Pickett claimed an undivided one-half interest in certain of the parcels which were held in McCarthy's name or in the name of nominees. In July 1957 McCarthy engaged Attorney Stickler to represent him. According to Stickler's complaint which was filed in 1962, McCarthy agreed to pay him a minimum fee of $25 per hour to be billed currently and, upon the final disposition of Pickett's claims, a further fee for the reasonable value of his services. In addition thereto there was to be a bonus based upon the degree of his success and all other pertinent facts and circumstances. The complaint alleged that the property acquired by McCarthy was worth more than $2,000,000, that from July 1957 to August 1961 Stickler spent approximately 1,000 hours in McCarthy's behalf and that his services were highly successful in that Pickett's claims were settled out of court with substantial savings resulting to McCarthy. It was further alleged that McCarthy had been billed and had paid $17,875 on account of the minimum hourly charges but had refused to pay the further fee and bonus which amounted to $130,000.

McCarthy's answer stated that his only agreement was to pay Stickler $25 per hour and that this had been paid in full. He denied that Stickler spent 1,000 hours in his behalf, that Stickler's accomplishments were highly successful or that the negotiated settlement represented a savings to him.

A chronological review of all the steps leading to the judgment, from the time the issues were joined until the judgment was entered, will best depict the situation facing the court at the time of its entry. A notice of a discovery deposition was served on McCarthy in April 1963. The notice called for the production of documents for the years 1948 to 1961 relating to 35 different transactions, loans, lawsuits, negotiations, settlements and legal services rendered by Stickler and by eight attorneys who had preceded him. McCarthy brought none of these documents to the deposition hearing which was held on May 9, 1963. His attorney stated that Stickler was entitled to the information he had requested but not at the expense of the disclosure of confidential matters, but that he and McCarthy were prepared to take any reasonable means to satisfy the request for discovery. Stickler replied that he was not interested in delving into confidential matters but that he was entitled to see the books of account concerning McCarthy's controversies with Pickett and himself, and that maybe some solution could be suggested. During the ensuing discussion and upon further questioning of McCarthy it developed that a ledger sheet existed for each of his projects on which there was detailed the various items of cost relating to the project and that, with a few exceptions, matters which he considered confidential had been eliminated from the sheets. Stickler asked if there was any reason why the ledger sheets could not be produced. McCarthy's attorney said he saw no impediment to producing them, and certain other documents that were desired, at the next hearing.

The next hearing was held May 15th. The promised ledger sheets were not produced. McCarthy's attorney said they refused to reveal private books and records which in their opinion were irrelevant and immaterial to the issues of the lawsuit and that he would ask for a protective order from the court. He said the defendant would supply particular information but not books and records and if Stickler wanted them he would have to ask the court to compel their production. He said, however, that pertinent records which would satisfy Stickler would be made available to him, but with the understanding that confidential matters would remain so. The attorney further agreed to furnish information, including prices, about McCarthy's properties which were sold before and during the pendency of the litigation with Pickett but he refused to supply information about properties sold after the litigation had ended. The attorneys agreed that the question whether information in the latter category had to be supplied would have to be threshed out in court.

The parties maintained the same positions at subsequent depositions on June 5th, June 10th, June 27th, June 28th, July 10th and October 1st. Stickler repeatedly requested the ledger sheets and other books, records and accounts; he disclaimed any interest in McCarthy's private affairs or confidential records. McCarthy repeatedly refused to produce his books and records. He termed these confidential and said he would not expose these to Stickler's scrutiny.

On October 4th an order was entered setting the case for trial on December 17, 1963. On October 21st Stickler filed a motion, accompanied by his affidavit, for an order requiring McCarthy to produce the ledger sheets and other documents pursuant to the original notice of deposition and to compel him to answer certain listed questions which he had refused to answer at the depositions. The motion was set for hearing on November 4th. On that date the attorneys for the defendant withdrew and another attorney, by leave of court, entered his appearance. At the request of the new attorney the hearing on the motion was continued to November 12th.

On November 12th the hearing was held on the pending motion and on the objections that were filed to it. The objections were on the grounds that much of the information and many of the documents referred to in the motion were privileged and did not relate to the merits of the matter in controversy. The court, after considering the motion, the affidavit supporting it and the objections, overruled the objections and entered an order directing McCarthy to produce the documents and answer the questions. The court also directed that the next deposition was to be held on November 15th in his own jury room and that it continue from day to day until completed.

Upon the resumption of the deposition, McCarthy stated that despite the court order he would not produce the ledger sheets themselves or certain other documents. He did produce photostatic copies of some of the ledger sheets, one of which had been admittedly changed by him after the order of November 12th. He suggested that if given more time he might be able to bring in material he and his attorney felt was relevant. Stickler complained that an examination revealed that the photographed ledger sheets did not contain information concerning the sales of the properties. McCarthy said it was not his practice to put such information on these sheets. He said that Stickler had had in his possession, from the very beginning, all the information that was needed and that he would not produce his cash journals which contained the sales figures on any further records.

After this, events moved in rapid succession to a climax. Stickler filed a motion on November 19th which related what had taken place on November 15th, set out that the photostatic copies of the ledger sheets contained no information about the sales of the properties involved in the Pickett-McCarthy litigation and requested a supplemental order requiring McCarthy to produce his cash journals and books of account. On the same day McCarthy moved to remove the case from the jury trial calendar. The affidavit of his attorney, filed in support of the latter motion, stated that he had not had enough time to analyze the long record, to study the many exhibits or to take necessary depositions; that he would be unable to prepare the defense because of these factors and because of obligations he had to other clients, and that the trial date was during the busiest season of McCarthy's business. McCarthy's motion was not ruled upon until November 27th. Stickler's motion was continued to November 21st.

On the 21st the court ordered McCarthy to produce his original ledger sheets and his cash journals insofar as they reflected his real estate interests or sales and contracts to sell such interests. The court set November 25th as the time and his own jury room as the place for the deposition to be resumed.

President Kennedy was assassinated on November 22nd, and the court house was closed for his funeral on November 25th. Because of this the business of all the courts was postponed until the following day. Stickler telephoned McCarthy and telegraphed his attorney that the hearing would take place on the 26th. The attorney sent a night letter from Minnesota to the judge and to the plaintiff explaining that he could not be present on the 26th. On the 26th the proceedings were put over until the 27th.

On the 27th McCarthy's attorney filed an additional affidavit in support of his motion to remove the cause from the trial calendar. After a full hearing this motion was denied. The court stated that the effect of the motion was to continue the case generally and that the court would not have permitted the substitution of attorneys on November 4th, just a few weeks before the trial date and after months of litigation, if representations had not been made and assurances given that the new attorney would be ready to proceed on the date selected. In reference to the dispute over the documents the court remarked that McCarthy's position, that his records contained some personal entries and would disclose his technique of doing business, had no relevancy to their production; that the court had offered the offices of his court for taking the deposition and that he would be available in court or chambers to rule on questions concerning the records. McCarthy's attorney indicated that the records were in court but that in his and McCarthy's opinion the plaintiff had everything he was entitled to and they had no intention of letting him see the ledger sheets, the cash journals or other records. He said he would go over the records with the court and McCarthy but not with the plaintiff or his attorney. The court responded that the plaintiff and his attorney were men of integrity and responsibility and that it was their privilege to see the original records for the purpose of their lawsuit. When the court asked where the records were, the attorney parried, saying: "It is not that simple. . . . I think I can demonstrate to the court that we did give them everything they are entitled to." The court examined the transcript of the depositions and then said: "You will produce them" and "You will produce them in an original state and then show the court they are not applicable" and "I want the instruments produced, period." After further discussion the court attempted to terminate the hearing which had extended well into the noon hour by making the pronouncement: "Gentlemen, I must ask your indulgence. I have a motion in chambers and I have a motion call at 2:00 o'clock. I am saying whatever instruments are relative to this disposition I hereby order McCarthy to produce now, not tomorrow — right now." But McCarthy did not produce the records. He continued to argue and to resist. Further colloquy took place during which Stickler volunteered to limit his request to those records showing the costs and sales prices of the properties listed in a quitclaim deed given to McCarthy by Pickett. The court directed that such a clarifying order be drafted and it was agreed that it would be presented at 9:30 a.m., November 29th.

On the 29th at the appointed hour the order directing the defendant to produce specific records was presented and signed. Neither McCarthy nor his attorney came to court. The order incorporated a provision that had not been mentioned at the prior hearing: that McCarthy's deposition be resumed on December 2nd at 9:30 a.m. in the jury room of the court. Because of this the plaintiff notified the defendant of the date, time and place of the next hearing.

McCarthy and his attorney did not appear for the deposition on December 2nd. Although Stickler's letter to McCarthy notifying him of the December 2nd date and enclosing a copy of the court's order was dated November 29th, and his telegram to McCarthy's attorney was sent the morning of the 29th, they claimed they did not receive the messages until December 2nd, too late to attend. The attorney telephoned Stickler's office on the 2nd but did not reach him. They did not talk to each other until December 3rd when it was agreed that the deposition would be resumed on December 4th.

Again, McCarthy and his attorney did not show up. On the afternoon of the 4th Stickler served notice that on the following day he would move that the defendant's answer be stricken and that judgment be entered on the pleadings. The man who served the notice was thereupon handed a notice by McCarthy's attorney that the defendant would present a petition for a change of venue on the same date.

At 2:00 p.m. on December 5, 1963, the plaintiff opened the hearing by presenting his motion. The motion was supported by his affidavit and by exhibits containing excerpts from the depositions showing McCarthy's refusal to produce his records in compliance with the first deposition notice and in compliance with the court orders of November 12th, November 21st and November 29th. A 15 minute recess was taken at the request of McCarthy's attorney, to give him time to read the affidavit and exhibits. When the hearing was resumed he said that he and McCarthy desired to file counteraffidavits; he also protested the provision in the November 29th order which set the next deposition for December 2nd on the ground that nothing had been said about this ...


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