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03/04/88 Zuber, Deceased, v. Power Company

March 4, 1988

ZUBER, DECEASED, PLAINTIFF-APPELLANT

v.

ILLINOIS POWER COMPANY, A CORPORATION, DEFENDANT-THIRD-PARTY PLAINTIFF,

v.

R. DRON ELECTRICAL COMPANY, INC., A CORPORATION, AND THE UNITED STATES FIDELITY AND GUARANTY



APPELLATE COURT OF ILLINOIS, FIFTH DISTRICT VIRGINIA ZUBER, Administratrix of the Estate of Ralph

COMPANY, a corporation, Third-Party, Defendants-Appellees

520 N.E.2d 1194, 117 Ill. Dec. 843 1988.IL.299

Appeal from the Circuit Court of St. Clair County, Honorable William Starnes, Judge Presiding.

APPELLATE Judges:

HARRISON, P.J., CALVO1 and LEWIS, JJ., concur.

DECISION OF THE COURT DELIVERED BY THE HONORABLE JUDGE HARRISON

HARRISON, Presiding Justice:

Plaintiff, Virginia Zuber, as Administratrix of the Estate of Ralph Zuber, petitioned this court for rehearing pursuant to Supreme Court Rule 367 (107 Ill. 2d R.367). In her petition, plaintiff argues that this court misinterpreted certain statements made by her counsel at oral argument. Specifically, plaintiff asserts that her attorney did not in fact indicate that no claim to additional attorneys fees was being made, as we indicated in the last sentence of the first full paragraph of page 12 of our slip opinion. Accordingly, plaintiff asks that we delete that sentence, which reads:

"Since plaintiff's attorneys have already been reimbursed out of the settlement for these litigation costs, and since plaintiff's attorney at oral argument stated that the attorneys make no claim to additional attorneys fees, the employer's weekly payments shall be made to plaintiff directly."

In its place, plaintiff argues that we should substitute the following language:

"Since plaintiff's attorneys have already been reimbursed out of the settlement for these litigation costs, the employer shall pay $14.32 per week to plaintiff directly, and the balance of $56.10 per week to plaintiff's attorneys."

We granted the petition for rehearing. After holding oral argument on the issue raised by that petition and upon consideration of the parties' briefs, the record, and the applicable law, we now agree that we were incorrect in believing that plaintiff's attorneys meant to make no claim to additional attorneys fees. Nevertheless, we adhere to our Conclusion that the weekly payments for attorneys fees, as well as costs, which the employer must continue to make should be paid directly to plaintiff. We therefore cannot accept the substitute language proffered by plaintiff's counsel.

As we have noted, plaintiff's third-party action against Illinois Power yielded a settlement of $388,995.54. The settlement consisted of a lump-sum payment of $302,466.54 and an annuity which cost $86,529. Pursuant to an agreement between plaintiff and her attorney, the attorneys were to keep 33 1/3% of this total recovery. They did not do so. Instead, they claimed a fee of $100,822.18, approximately 26% of the amount they recovered. Plaintiff's attorneys now suggest that they actually charged nothing to plaintiff for the annuity portion of the settlement and that their fee was based solely on the lump-sum payment. In our view, this is merely an accounting fiction and is of no consequence. Plaintiff's attorneys were free to reduce their fees however they saw fit. The reality remains that the fee paid by plaintiff covered all of the benefits she received in the settlement, and her attorneys could not now claim additional sums from her for the services they performed in securing that settlement or any portion of it.

The attorneys fees, along with costs, were deducted by plaintiff's counsel from the settlement fund before it was paid over to plaintiff. Thus, those fees and costs were borne directly by plaintiff. Plaintiff, however, was not the only party to derive benefit from the litigation. The employer profited as well, because the third-party action created a fund from which the employer (actually, the employer's insurer) could obtain ...


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