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Herman v. Prudence Mut. Cas. Co.

FEBRUARY 19, 1968.

ALVIN P. HERMAN, ET AL., ON BEHALF OF THEMSELVES AND OTHER CLIENTS OF ALVIN P. HERMAN AND THEODORE TANNEBAUM, WHO HAVE CLAIMS PENDING AGAINST ASSUREDS OF PRUDENCE MUTUAL CASUALTY COMPANY, AND ALEX CASON, PLAINTIFFS-APPELLANTS,

v.

PRUDENCE MUTUAL CASUALTY COMPANY, GEORGE F. BARRETT, URBAN SERVICE BUREAU, INC., AND WILLIAM WARREN, DEFENDANTS-APPELLEES.



Appeal from the Circuit Court of Cook County; the Hon. DONALD J. O'BRIEN, Judge, presiding. Reversed and remanded with directions.

MR. JUSTICE MURPHY DELIVERED THE OPINION OF THE COURT.

Rehearing denied March 18, 1968.

In a three-count complaint seeking injunctive relief and damages, plaintiffs alleged that defendants conspired to induce breaches of 92 of plaintiffs' attorney-client relationships and procure fraudulent settlements in personal injury claims pending against assureds of defendant insurance company. The trial court sustained defendants' motion to strike and dismissed the complaint.

Plaintiffs, asserting a substantial constitutional question, appealed directly to the Supreme Court, which found it had no jurisdiction on the direct appeal and transferred the cause to this court. From this we presume the Supreme Court determined either that no constitutional questions were involved or that they were not material to the disposition of the appeal. City of Chicago v. Berg, 48 Ill. App.2d 251, 199 N.E.2d 49 (1964).

Substantially, the issue on appeal is whether the complaint states a cause of action to show that defendants entered into a conspiracy among themselves to interfere wrongfully and maliciously with contractual rights and fraudulently induce clients of plaintiffs, Herman and Tannebaum, lawyers, to breach their contracts.

In sum, the allegations of the complaint show that plaintiffs, Herman and Tannebaum, are lawyers, and the other plaintiffs are their clients who have pending claims against assureds of defendant Prudence Mutual Casualty Company.

Defendant Barrett, a lawyer and a director of Prudence, is primarily engaged in defending claims asserted against persons insured by Prudence. Defendant Urban Service Bureau, Inc., is an Illinois corporation engaged in the adjustment and settlement of claims for insurance companies and attorneys. Defendant Warren, not a lawyer, is employed by Prudence, Barrett and Urban to adjust, settle and investigate accident claims.

Count I of the complaint is brought by Herman and Tannebaum. It alleges the undertaking by these plaintiffs, under attorney-retainer employment contracts, to represent some 92 persons with claims against the assureds of Prudence, and the filing of lawsuits in 43 of these cases. In each of these claims, Herman and Tannebaum "sent or caused to be sent to each of the respective defendants, in all cases Prudence's assureds, a Notice of Attorneys' Lien. . . . All said Notices of Attorneys' Liens were forwarded to Prudence and Barrett," and in all these claims, Herman and Tannebaum, "as attorneys for the claimants and plaintiffs, [have] discussed and attempted to negotiate settlements of said claims with Prudence and Barrett."

Paragraph 25 of the complaint alleges that following the entry of a verdict against an assured of Prudence in a suit in which the plaintiff was represented by Herman and Tannebaum, "Prudence and Barrett have conspired and are presently conspiring among themselves and with Urban and Warren to maliciously, unethically and illegally defraud Herman's clients into prematurely releasing their claims against Prudence's assured without advice of counsel and the opportunity of a trial."

Paragraph 26 alleges:

"Urban and Warren have made and are presently making attempts to contact, and have contacted, either personally, by letter, telephone or other means of communication, all of Herman's clients who are party plaintiffs to this suit."

Paragraph 27 alleges:

"In furtherance of this conspiracy, Prudence and Barrett have furnished and made available to Urban and Warren the names and addresses of Herman's clients and the nature of the claims involved."

Paragraph 30 alleges:

"At the time of and since contacting Herman's clients, Prudence, Barrett, Urban and Warren, pursuant to and in furtherance of their conspiracy, have:

"(a) Maliciously and fraudulently attempted to induce, are presently inducing or have in-induced or otherwise purposely caused Herman's clients to discontinue ...


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