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Durr v. Beatty

OPINION FILED APRIL 8, 1986.

WENDELL DURR, PLAINTIFF-APPELLEE,

v.

WILLIAM (BERT) BEATTY ET AL., DEFENDANTS (JOHN M. BEATTY, DEFENDANT-APPELLANT).



Appeal from the Circuit Court of Madison County; the Hon. Thomas Russell, Judge, presiding.

PRESIDING JUSTICE KASSERMAN DELIVERED THE OPINION OF THE COURT:

On March 31, 1983, plaintiff, Wendell Durr, filed an amended complaint in the circuit court of Madison County against defendants, John M. Beatty and William Beatty, alleging that the parties had entered into an oral contract for attorney fees in November 1977 and that defendants were obligated to pay plaintiff a certain sum pursuant to the terms of such contract. On June 24, 1983, plaintiff filed a covenant not to sue. This covenant provided that defendant William Beatty would pay plaintiff $1,500 and that plaintiff would not pursue any claim against William Beatty for attorney fees arising from the alleged contract. Following a bench trial, the trial court entered a judgment on June 20, 1984, finding in favor of plaintiff and ordering defendant John Beatty to pay plaintiff attorney fees in the sum of $20,000, less the sum of $1,500 which William Beatty previously had paid to plaintiff.

Defendant, John Beatty, has perfected this appeal in which he maintains that the trial court erred in determining that plaintiff and defendant had entered into an oral contract for attorney fees in November 1977. Alternatively, defendant urges that if such a contract existed, it is unenforceable because it is unconscionable and contrary to the public policy as evinced in the Illinois Code of Professional Responsibility (87 Ill.2d R. 1-101 et seq.). In addition, defendant asserts that plaintiff is guilty of a breach of his fiduciary duty by unduly influencing defendant to enter into such a contract.

The following evidence was introduced at the bench trial. Plaintiff, who was serving as an associate circuit judge of the third judicial circuit at the time of the trial, testified that he was first licensed to practice law in 1962. Prior to 1973, plaintiff and defendant, who were social acquaintances, had systematically "traded services," with plaintiff providing legal services for defendant, an Edwardsville dentist, and defendant providing dental services for plaintiff. Under this system, plaintiff and defendant would periodically compare the amounts of services which the other had provided and one would pay to the other any outstanding balances due.

In the early portion of 1973, defendant approached plaintiff and requested that plaintiff represent defendant and his brother, William Beatty, in a legal dispute concerning the ownership of a Franklin County radio station. Plaintiff and defendant conducted a major portion of the negotiations concerning plaintiff's legal representation of the Beattys due to the prior social relationship between plaintiff and defendant and the fact that plaintiff and defendant worked in Edwardsville while William Beatty lived in Franklin County. In early 1973, plaintiff and the Beattys entered into a contingency fee agreement, which provided that plaintiff would represent them in the radio station litigation and that they would pay plaintiff one-third of anything recovered as a result of such litigation.

During 1973, William Alexander, an associate in plaintiff's law firm, commenced litigation regarding the radio station by filing a complaint in the circuit court of Franklin County. Plaintiff admitted that Mr. Alexander performed the bulk of the legal services relating to the radio station litigation. In 1974, Mr. Alexander left plaintiff's law firm and established a law practice in Franklin County. As a result, plaintiff, Mr. Alexander, and the Beattys agreed that, for purposes of convenience, Mr. Alexander would represent the Beattys in the radio station litigation. Subsequently, Mr. Alexander and his Franklin County law partner were either appointed or elected to public office and were unable to continue their representation of the Beattys.

In 1977 defendant again asked plaintiff to represent the Beattys in the Franklin County litigation and plaintiff agreed to serve as their counsel. Although the evidence indicates that plaintiff and the Beattys entered into a contingency fee agreement in June 1977, the record contains conflicting evidence as to the precise terms of this agreement. Plaintiff testified that the agreement provided that he was to receive one-third of anything obtained as a result of the litigation. However, the defendant testified that plaintiff was to receive one-third of any cash award plus 15% of any interest in the radio station which the Beattys might obtain as a result of the litigation.

In any event, plaintiff and Dennis Douglas, an attorney who shared office space in plaintiff's building, performed certain legal services on the Beattys' behalf during the approximate five-month period from June 1977 until November 1977. Plaintiff admitted that during this period Mr. Douglas performed most of the legal services relating to the radio station litigation. Plaintiff limited his activity to counseling and advising Mr. Douglas and discussing the radio station litigation with a Washington, D.C., attorney and a Franklin County attorney who represented the radio station litigation defendants.

In an early November 1977 telephone conversation, defendant discharged plaintiff from his position as the Beattys' counsel in the radio station litigation. The record contains conflicting evidence as to the events surrounding this discharge and the subsequent oral fee agreement which allegedly was entered into by plaintiff and defendant.

Plaintiff testified as follows concerning the November 1977 telephone conversation. During that conversation, defendant informed plaintiff that, for convenience purposes, the Beattys again wanted a Franklin County attorney to represent them in the radio station litigation. Plaintiff, who believed that it was "very unlikely" that the Beattys would be "successful" in the radio station litigation, was "happy" to terminate his representation of the Beattys. When defendant inquired as to the amount of attorney fees which the Beattys owed, plaintiff responded that (1) the total amount of attorney fees awarded in the radio station litigation probably would be equal to one-third of everything recovered as a result of that litigation, and (2) as a referring attorney, plaintiff typically would receive one-third of the total attorney fees award. In other words, plaintiff informed defendant that a normal fee for a referring attorney was equal to approximately 11 percent of anything recovered as a result of the litigation. According to plaintiff, plaintiff and defendant orally agreed that plaintiff would relinquish control of the radio station litigation file in exchange for 10% of anything the Beattys received as a result of the radio station litigation. Plaintiff admitted that all of the discussions involving his discharge from employment and the oral agreement for attorney fees occurred in one telephone conversation.

Plaintiff also testified that he (1) had no discussion with Tad Armstrong, the attorney who subsequently was retained by the Beattys and who successfully concluded the radio station litigation, (2) assumed no responsibility for the radio station litigation file after November 1977, and (3) continued to perform legal services for defendant in other matters after November 1977.

Although plaintiff and defendant continued to engage in their practice of "trading" professional services after November 1977, the parties apparently did not again discuss this November 1977 fee agreement until August 1978. Plaintiff testified that in an August 1978 telephone conversation, defendant suggested that he pay plaintiff for the amount of time plaintiff had expended and the expenses plaintiff had incurred rather than a percentage of the amount recovered as a result of the radio station litigation. After considering defendant's suggestion, plaintiff sent a letter dated August 15, 1978, to defendant, stating that "the more proper way to do it would be to leave it as we had already all agreed."

On December 14, 1981, the circuit court of Franklin County entered a lengthy judgment in the radio station litigation, providing, in part, that the Beattys would receive $120,000 in punitive damages and an ownership interest in the radio station. On April 23, 1982, the radio station litigation parties entered into a settlement agreement, providing that the Beattys would not receive a monetary award, but, instead, would be the sole owners of the radio station. Copies of both the circuit court's judgment and the parties' settlement agreement were introduced into evidence.

Plaintiff testified that (1) after reading a newspaper article which described this judgment, he sent defendant a document dated January 22, 1982, which provided in part that defendant owed plaintiff attorney fees resulting from the radio station litigation in the amount of $12,000 (i.e., 10% of $120,000), and (2) after receiving this document, defendant informed plaintiff on January ...


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