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10/05/87 Frank H. Schniederjon, v. John Krupa Et Al.

October 5, 1987

FRANK H. SCHNIEDERJON, PLAINTIFF-APPELLEE AND CROSS-APPELLANT

v.

JOHN KRUPA ET AL., DEFENDANTS-APPELLANTS AND CROSS-APPELLEES



APPELLATE COURT OF ILLINOIS, FIFTH DISTRICT

514 N.E.2d 1200, 162 Ill. App. 3d 192, 113 Ill. Dec. 189 1987.IL.1491

Appeal from the Circuit Court of Effingham County; the Hon. Michael R. Weber, Judge, presiding.

APPELLATE Judges:

JUSTICE LUND delivered the opinion of the court. KNECHT, J., concurs. JUSTICE GREEN, Dissenting.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE LUND

Defendants were sued by plaintiff over the terms of an oral contract providing for fee sharing. All parties are attorneys. The circuit court of Effingham County, sitting as trier of the facts, entered judgment for plaintiff against defendants in the amount of $20,000. Plaintiff was denied prejudgment interest. Defendants appeal alleging it was error to enter the $20,000 judgment. Plaintiff appeals alleging it was error to deny prejudgment interest.

Frances Traub's husband was killed in an automobile accident, and her first lawyer, Carrol Bayler, failed to bring a wrongful death action within the statute of limitations. Frances Traub, at least together with her father-in-law, Victor Traub, had a conference with plaintiff seeking his services in suing Bayler for legal malpractice. After determining that Frances Traub had a good cause of action, plaintiff, on February 17, 1977, met with Mr. and Mrs. Victor Traub and Frances Traub and discussed the merits of the case. He informed the Traubs he knew Bayler, was currently on opposite sides with him in a legal proceeding, and basically could not jeopardize the interest of his other client by suing Bayler. At plaintiff's suggestion, plaintiff obtained a Chicago attorney, John Krupa, to represent Frances Traub in the legal malpractice suit against Bayler. A written one-third, two-thirds contingent-fee contract was executed between Frances Traub and Krupa. Plaintiff's name was not mentioned in the agreement. Later, outside the presence of the Traubs, plaintiff and Krupa agreed to split Krupa's fee 50-50. Krupa did not inform Frances Traub of the 50-50 arrangement. While plaintiff testified he told the Traubs that he and Krupa would split the fee, he did not specifically remember mentioning a 50-50 division. The Traubs and Frances Traub's mother, Verna Williams, who was also present, only remember reference to plaintiff's getting a small fee for the use of his office.

The only services performed by plaintiff's office related to a new associate's spending a couple of days investigating the cause of action. Plaintiff refused to participate in any court proceedings against Bayler. The evidence indicates no additional participation by plaintiff or his firm.

The work on the case against Bayler evidently went from Krupa to defendant Arnold Newman, and then to attorney Donald Shapiro, who was not a member of Krupa's law firm. Shapiro did all the pretrial discovery and successfully tried the case to a $150,000 verdict. Bayler then settled with Frances Traub for $120,000. Shapiro took $26,666.67 for his services, and Krupa's old law firm was paid $13,333.33.

Both attorney Newman and attorney Shapiro testified they contacted plaintiff for assistance with routine matters involving the Bayler case but received refusals. Plaintiff denies these contacts. Plaintiff admitted he did not know of the trial and settlement until after hearing of the settlement during courthouse chatter.

Plaintiff, while stating his reservations about participating in the case against Bayler, did inform the Traubs he would be responsible for the case. He contends there was an attorney-client relationship between Frances Traub and himself. While the existence of the relationship is in doubt, considering plaintiff's lack of participation and his failure to take any responsibility as indicated by his lack of knowledge of the status of the case, we assume an attorney-client relationship for the purpose of this opinion.

This matter was before this court once before in Schniederjon v. Krupa (1985), 130 Ill. App. 3d 656, 474 N.E.2d 805 (Schniederjon I). That case arose from a ruling in the trial court for the defendants on a motion for summary judgment. In that case, we reversed the order for summary judgment. The facts now before us evolved from the trial on the merits, in contrast to the limited affidavits and depositions in the previous record. In Schniederjon I, we recognized that the oral contract between plaintiff and Krupa predated the adoption of Rule 2 -- 107(a) of the Illinois Code of Professional Responsibility (107 Ill. 2d R. 2 -- 107(a)). Yet, we stated that Rule 2 -- 107(a) in its previous status as an ethical guideline could still be applied to the case. (Schniederjon v. Krupa (1985), 130 Ill. App. 3d 656, 660, 474 N.E.2d 805, 809.) In that regard, we held, in part, that an issue of material fact existed as to the knowledge by Frances Traub of the 50-50 split agreement. 130 Ill. App. 3d 656, 660, 474 N.E.2d 805, 809.

Disciplinary Rule 2 -- 107of the American Bar Association Code of Professional Responsibility (Model Code of Professional Responsibility Canon 2(1979)) provides, in part:

"A lawyer shall not divide a fee for legal services with another lawyer who is not a partner in or associate of his ...


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