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CHILDS v. NATIONAL BANK OF AUSTIN

November 22, 1983

DORIS FULLER CHILDS, ELEANOR FULLER PARSON, NATALIE STOCKING, PRISCILLA PARSON AND KATHERINE MARRS, BENEFICIARIES OF THE JUDSON M. FULLER TRUST, PLAINTIFFS,
v.
NATIONAL BANK OF AUSTIN, AN ILLINOIS CORPORATION AND TRUSTEE OF THE JUDSON M. FULLER TRUST; CAREY, FILTER & WHITE, A PARTNERSHIP; ROBERT F. CAREY, AN INDIVIDUAL PARTNER; THOMAS F. CAREY, AN INDIVIDUAL PARTNER; EDWARD M. WHITE, AN INDIVIDUAL PARTNER; EDMUND P. BOLAND, AN INDIVIDUAL PARTNER; ANTHONY CAREY, AN INDIVIDUAL PARTNER; AND PATRICK S. FILTER, AN INDIVIDUAL PARTNER AND CHAIRMAN OF THE BOARD OF NATIONAL BANK OF AUSTIN AND THE HARRINGTON AND KING PERFORATING COMPANY, INC., DEFENDANTS.



The opinion of the court was delivered by: Aspen, District Judge:

MEMORANDUM OPINION AND ORDER

Plaintiffs Doris Fuller Childs, Eleanor Fuller Parson, Natalie Stocking, Priscilla Parson and Katherine Marrs sued Patrick S. Filter ("Filter"), the National Bank of Austin as trustee of the Judson M. Fuller Trust ("Austin") and Carey, Filter & White, a law firm, seeking removal of Austin as trustee, removal of Filter as Chairman of the Board of the Harrington & King Perforating Company, recovery of fees paid to Austin as trustee, recovery of fees paid to Filter as Chairman of the Board and recovery of retainer fees to the law firm. The district court entered judgment in favor of defendants, Childs v. National Bank of Austin, 499 F. Supp. 1096 (N.D.Ill. 1980). On appeal, the Seventh Circuit affirmed in part and reversed in part, 658 F.2d 487 (7th Cir. 1981). The Court affirmed the district court in all respects with the exception of its finding that Filter need not account to the Judson M. Fuller Trust for the salary he received as Chairman of the Board of Harrington & King. The case was remanded to the district court.

On March 31, 1982, the district court entered judgment against Filter in the amount of $137,779.50 plus interest. The Court ordered Filter to deposit the funds with the Clerk of Court on October 29, 1982, holding that the deposit would constitute satisfaction of judgment, and ordering the parties to submit proposed disbursement orders. Presently before the Court are the parties' memoranda concerning disbursement of the judgment fund, plaintiffs' counsels' ("petitioners") motion for leave to file a petition to enforce an attorneys' lien and plaintiffs' motion for attorneys' fees. For reasons set forth below, petitioners' motion is denied, plaintiffs' motion is granted and the judgment fund is distributed as set forth in this opinion.

Petitioners' Attorneys' Lien

Petitioners seek leave to file a petition to enforce an attorneys' lien. Petitioners would satisfy their lien out of the funds deposited by Filter with this Court. Austin maintains that petitioners cannot file their petition pursuant to the Illinois Attorneys' Lien Act, Ill.Rev.Stat. ch. 13 § 14.

According to ch. 13 § 14,

The Seventh Circuit has held that federal district courts have jurisdiction to entertain attorneys' fee issues pursuant to the lien created by ch. 13 § 14, because if the original action has a proper basis for federal jurisdiction, any recovery realized by the suit creates an attachable interest upon which an attorney may assert a fee claim. Clarion Corp. v. American Home Products Corp., 464 F.2d 444, 445 (7th Cir. 1972). Thus, in Clarion, the Court affirmed enforcement of an attorneys' lien brought by plaintiff's counsel against the plaintiff. The Clarion recovery was a settlement plaintiff accepted from the defendant. And in Peresipka v. Elgin, Joliet & Eastern Ry. Co., 231 F.2d 268 (7th Cir. 1956), the Court held that an intervening attorney asserting an attorneys' lien became a joint claimant and acquired an interest in any judgment rendered in favor of the plaintiff. In so holding, the Court quoted as follows from Baker v. Baker, 258 Ill. 418, 421, 101 N.E. 587, 588 (1913):

  By serving the notice claiming a lien the
  attorney in effect becomes a joint claimant with
  his client in any judgment or decree that may be
  rendered or in the proceeds of any settlement
  that may be made by the client, and to the extent
  of the amount of his fee has the same interest in
  such proceeds, judgment or decree as his client
  and is entitled to his pro rata share thereof. In
  short, when the notice claiming a lien is served on
  the defendant or debtor under this statute it has
  the effect of an assignment of an interest in any
  judgment or decree that may be rendered or in the
  proceeds of any settlement that may be made by the
  client, and is such an assignment that the
  defendant or debtor is bound to respect. This
  creates a new and a substantial right in favor of
  the attorney and divests the client of substantial
  rights that he theretofore possessed.

We believe that the above cases are inapposite to the instant matter. Although petitioners' clients are trust beneficiaries of the Judson M. Fuller Trust, neither the remaindermen to the trust, nor the other income beneficiaries of the trust have been joined as parties to this lawsuit. The money deposited with the Court by Filter, however, must be accounted to the trust, according to the Seventh Circuit. Childs v. National Bank of Austin, 658 F.2d 487, 491-93 (7th Cir. 1981). Therefore, petitioners' clients do not themselves have any attachable interest upon which petitioners may assert their claim for fees. Plaintiffs lack the authority to bind the trustee or the additional trust beneficiaries to the agreement they entered into with petitioners. Mercer v. Chicago Ry. Co., 174 Ill. App. 234, 237-38 (1st Dist. 1912). As a result, petitioners' motion for leave to file their petition to enforce their attorneys' lien must be denied.

Plaintiffs' Alternative Motion for Attorneys' Fees

In Trustees v. Greenough, 105 U.S. 527, 26 L.Ed. 1157 the Supreme Court cited the general rule that

  where one of many parties having a common
  interest in a trust fund, at his own expense
  takes proper proceedings to save it from
  destruction and to restore it to the purposes of
  the trust, he is entitled to reimbursement,
  either out of the fund itself, or by ...

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